What Is The Probability You'll Need Long-Term Care ?
Is Long-Term Care Insurance A Smart Financial Move ?
Many consumers call the Association with questions and one of the more frequent ones is "what's the real probability I'll really need this and use it?".
I'd like to invite you to read this page where I attempt to address this very important question.
Before answering the question, I'd like to urge you to get a free quote for long-term care insurance from one of our members. There's no cost and never any obligation. The links are just before my answer begins. Thank you.
Jesse SlomeExecutive Director
American Association for Long-Term Care Insurance
JUST STARTING OUT - A smart first step is requesting a free no-obligation quote for long-term care insurance from an Association member.
Click here: Free Long-Term Care Insurance Quote From Leading Insurers.
COMPARE BEFORE YOU BUY - Make sure you're getting the most coverage for the fewest dollars. Request a free no-obligation comparison quote from an Association member.
Click here: Get A Comparison Long-Term Care Insurance Quote .
Your Real Risk Is ...
Here's the answer to the question, "what's my real risk of needing long-term care?". It's either 0% (you'll never need it) or it's 100% (you'll need it). I call it the "lottery you don't want to win ... though the odds are significantly greater than winning the lottery!
I can't stress the importance of the either 0% or 100% enough. Basing your planning on 'averages' is not at all relevant to your personal risk or your personal situation. It only tells you what may happen if you look at say 1,000 people. But, I do recognize that it still is an important question ... one that is deserving of an answer.
So, in 2012, I posed the following question to the leading long-term care insurance actuaries (they are the folks who price long-term care insurance: What percentage of people who purchase long-term care insurance will utilize their policy at some point before they die?. They need to know this in order to properly price the policies you buy.
We asked them to provide data at various ages from 60 to 80. And, here is the answer.
The lifetime chance someone who buys a policy at age 60 will use their policy before they die is 50%. So, 50% will use their policy and 50% won't. The actuaries did this based on a zero (0) day elimination period. Obviously it assumes you keep your policy in force by paying premiums.
Most people today, however, purchase coverage with a 90-day Elimination Period (a 90-day deductible, or where you or someone else will pay for care for 90 days until the policy kicks in. That is a significant way to make coverage today affordable. So, I went back to the actuaries and asked them to take this into consideration. What happens if you purchase coverage with a 90-day deductible?
For someone with a 90-day Elimination Period, the lifetime chance of someone buying coverage at age 60 and using policy benefits was 35%. So, 35% will use their coverage and 65% will not. As you might assume, the decline is because during those first 90 days, some people will recover and some will die.
And, while the numbers varied for various age brackets the actuaries studied for AALTCI, they did not vary all that much. If you buy at older ages, the likelihood you will utilize your policy will increase slightly.
A Few Important Considerations
First, a 50-50 likelihood you'll use your policy is enormously high. That's part of the reason long term care insurance is costly. If you have owned a home for years ... have you ever used your homeowner's insurance? If you have car insurance ... do you get into a big accident every two years (I hope not). Long term care is a real risk and the likelihood you'll use this coverage is very high. Is it a smart financial move? With as much as a 50-50 risk, you have to admit it is well worth looking into this important protection.
Second, if 50-50 doesn't seem high enough for you, consider the following; some long-term care insurance policies today have a 90-day waiting period for nursing home care but a 0-day waiting period for home care benefits. If you purchase that type of coverage, your lifetime chance of using policy benefits will fall somewhere between 35% and 50% -- because most people buy this coverage and use it to get care in their own home.
Finally, so many articles refer to a statistic you will not find on the Association's website. I am referring to the statistic that "70 percent of people over age 65 need some long-term care". This number, based on a government study conducted years ago, may be accurate but the definition for "long-term care" is quite encompassing and not relevant to a discussion regarding long term care insurance utilization.
For example, someone spending 10 days recovering in a skilled nursing facility following a hospital stay would be considered by the government as having "needed long-term care." But with a 90-day Elimination Period, they would not qualify for long-term care insurance benefits. That is why we do not use the government statistic and asked the actuaries to study the real likelihood someone with a long term care insurance policy will use what they purchased.
How Long Do People Need Long-Term Care
Good for you. You are still reading! I truly believe an educated individual is far more likely to understand the risk and act by getting some long-term care insurance protection in place.
So here is some meaningful information on nursing home lengths of stays as published in the Association's 2008 LTCi Sourcebook. Remember, that most long-term care is actually received at home but there are still fewer statistics about home care utilization for "long-term care" needs. When we get relevant ones we will publish them for consumers to read.
| Average Length of Stays (Nursing Homes) | |
|---|---|
| 5 years or more | 12.0% |
| 3 to 5 years | 12.0% |
| 1 to 3 years | 30.3% |
| 6 to 12 months | 14.2% |
| 3 to 6 months | 10.0% |
| less than 3 months | 20.0% |
| Average Length Of Stay in Years | |
|---|---|
| Female | 2.6 years |
| Male | 2.3 years |
| Married | 1.6 years |
| Single / Never Married | 3.8 years |
| Widowed | 2.3 years |
| Divorced / Separated | 2.7 years |
The 100% Smartest Move You Can Make Now
Once you understand you have a risk, the smartest move you can make is deciding how you will handle it. Long-term care insurance requires that you apply when you are in good health.
Take a minute to request our no-obligation quote. Let a professional answer your questions and explain what coverage costs.
JUST STARTING OUT - A smart first step is requesting a free no-obligation quote for long-term care insurance from an Association member.
Click here: Free Long-Term Care Insurance Quote From Leading Insurers.
COMPARE BEFORE YOU BUY - Make sure you're getting the most coverage for the fewest dollars. Request a free no-obligation comparison quote from an Association member.
Click here: Get A Comparison Long-Term Care Insurance Quote .
Click here to return to the LTC Learning Center and read about ways to save, insurance company ratings, tax deductibility and more.
Click here to return to the home page pf the American Association for Long-Term Care Insurance.
