Statistics of Long Term
Care Insurance Costs
Among Insurance Companies
Wading through the statistics of long term care insurance costs among insurance companies can be a daunting task. Most people realize that statistics can be swayed to show more than one side of an issue and understanding long term care insurance isn't always easy to begin with.
However, there are some clear statistics regarding the costs of long term care insurance that can be quite helpful in making the decision whether or not you need to purchase this type of coverage. For instance, most people need to purchase long term care insurance privately as few receive it as a benefit at their place of employment.
According to an Employee Benefits Survey from the U.S. Bureau of Labor Statistics, the percentage of Americans who receive long term care insurance as an employer paid benefit is only 12%, only up 6% since 1999. This number is frighteningly low, when you consider that Medicare.gov states that adults over the age of 65 have a 40% chance of entering a nursing home. Medicare only pays for about half the costs of a nursing home stay, which can run as high as $200 a day.
It seems clear that a large number of people will need to at least seriously think about obtaining long term care insurance. Once you have researched the pros and cons of whether or not you want to carry this type of insurance coverage, then it is important to research a variety of companies to determine the best rate for the amount of coverage you desire.
Who Offers Long Term Care Insurance?
The top three long term care insurance companies, as determined by direct premiums earned, in 2005 were:
They had a combined total of over $3.5 billion dollars in premiums earned, giving them 36.85% of the market share. These are all East Coast companies, based in Massachusetts, Delaware and New York, respectively.
What Are The Costs
Of Long Term Care Insurance?
Costs of long term care insurance vary widely depending upon the company you choose, the coverage you want, the age you are when you take out your policy, as well as your health, your location and other variables. I did a quick online comparison quote between two unnamed companies and the premiums were different by 97%. There are many different types of insurance companies to choose from also.
According to the National Association of Insurance Commissioners, in 2005, there were 194 companies that wrote long term care policies. Of these, 11 were property/casualty insurers, 6 were fraternal insurers and 154 were life, accident and health insurers.
It is also important to know the statistics regarding the costs of long term care, as well as the insurance costs.
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In 2006, the average daily costs for a private room in a nursing home facility was $206 (or $75,190 annually), which was a 6.8% increase over the rate in 2004, which was $192 per day or $66,795 annually.
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The expected average rate for 2007 was over $250 a day, which is an annual rate of $94,000.
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These numbers will continue to rise to as much as $243,000 annually in 2017, $630,000 per year in 2027 and over $1.6 million annually by the year 2037.
Given these astronomical rate increases over the next three decades, it may seem very cost effective for someone in their 30s to consider long term care insurance coverage.
How Likely Is It That
I Will Need Long Term Care?
Finally, you should also consider the likelihood of needing long term care in your lifetime. Statistics show that more than half of the U.S. population will require long term care insurance at some time in their lives. 60% of people over age 75 will need long term care and will probably need that care for about three years.
For a couple where both partners are 65 or over there is a 75% chance that at least one partner will need long term care. These numbers also seem to indicate that even though long term care insurance may seem to be a costly insurance option, the chances of needing the care are great and the costs of that care can be extremely expensive.
It is important to remember that statistics of long term care insurance costs among insurance companies will vary widely and show only a portion of the information you need to know to make a quality decision for your future insurance needs.
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