A couple who are both age 60 and who purchase new long-term care insurance coverage can expect to pay between 6 and 9 percent more compared to a year ago according to the 2017 Long Term Care Insurance Price Index, an annual report from the American Association for Long-Term Care Insurance, an industry group. But rates for single men and women remained fairly level or, in some instances, actually declined compared to 2016, reports the association.
A married couple both age 60 would pay $2,200 a year combined for a total of $328,000 of long-term care insurance coverage. This represents a 9 percent increase from 2016, when the association reported that a couple could expect to pay $2,010. Adding an inflation growth option that builds the couple’s benefit pool to a combined $660,000 at age 85 would cost an average of $3,790 a year, 6 percent higher than last year.
Rates for single men and women remained fairly level or, in some instances, went down compared to 2016. A single man could expect to pay an average of $1,050 a year for $164,000 worth of coverage, a 3 percent increase over last year, although the same policy with inflation protection is now 20 percent cheaper, at $1,665 a year. The same two policies for single women average $1,600 and $2,600 a year, respectively, essentially the same as 2016.
But the association points out that costs for virtually identical policy coverage still varies significantly from one insurer to the next. Its analysis found rates varied by as much as 70 percent for the same coverage. For example, a 55-year-old single woman could pay as little as $1,450 a year or as much as $2,650, depending on which insurer she buys from. “You generally only buy long-term care insurance once, so it’s important to do it correctly the first time,” said Jesse Slome, the association’s director.
As last year, this year’s index compares policies sold in Tennessee, which is viewed as a representative state. The survey was sconducted in January 2017.
Here is the association’s one-page 2017 index showing average prices for common scenarios, including comparisons to 2016 prices:
2017 NATIONAL LONG-TERM CARE INSURANCE PRICE INDEX
May be reported with credit to American Association for Long-Term Care Insurance, www.aaltci.org
Price analysis of leading long-term care insurers. Conducted January 2017. Resident of TN, rates vary by state and subject to change.
The “Good – Better – Best” Approach To Long-Term Care Planning
Immediate Value
of Protection AGE 60 2
Value of Protection At AGE 80 3
Value of Protection At AGE 85 3
GOOD $ 44,000 each
Good = Buying a Short-Term Care policy that pays benefits up to 360 days with benefits growing 5% (simple) yearly.
$ 77,400 each
BETTER $ 164,000 each $ 164,000 each $ 164,000 each
BEST $ 164,000 each $ 285,000 each $ 330,000 each person/spouse
Best = Coverage that GROWS 3% compounded annually $ 570,000 TOTAL $ 660,000 TOTAL combined protection
——————————————————————————————————————————————— SINGLE MALE AGE 55
Premium (preferred health) GOOD $ 800 /year
BETTER $ 1,050/year 2017 Range of policy prices: Low: $1,030 High: $1,990 (54% difference between) 2016 Average: $1,015 (2017 is a 3% INCREASE )
BEST $ 1,665/year 2017 Range of policy prices: Low: $1,535 High: $1,805 (16% difference between) 2016 Average: $2,035 (2017 is a 20% DECREASE)
——————————————————————————————————————————————— SINGLE FEMALE AGE 55
$ 86,400 each person/spouse Better = Coverage STARTS HIGH in case care is needed in early years, REMAINS LEVEL as you age.
Premium (preferred health) GOOD $ 800 /year
BETTER $ 1,500/year 2017 Range of policy prices: Low: $1,450 2016 Average: $1,490 (LEVEL)
BEST $ 2,600/year 2017 Range of policy prices: Low: $2,300
2016 Average: $2,580 (2017 is a 0.7% INCREASE)
——————————————————————————————————————————————— COUPLE BOTH AGE 60
Premium (Combined cost for couple / standard health) GOOD $ 2,050 /year
BETTER $ 2,200/year 2017 Range of policy prices: Low: $2,170 High: $4,490 (70% difference between) 2016 Average: $2,010 (2017 is a 9% INCREASE)
BEST $ 3, 790/year 2017 Range of policy prices: Low: $3,475 High: $3,850 ( 10% difference between) 2016 Average: $3,560 (2017 is a 6% INCREASE)
——————————————————————————————————————————————— GOOD: $120 daily benefit at inception of plan, 360 day plan, 30-day EP, 0 Day Cert. period, 100% home care benefit with 5% Simple inflation growth.
BETTER: $150 daily benefit at inception of plan, 3-year plan, 90-day elimination period, 90-day certification period, 100% home care benefit.
BEST: $150 daily benefit at inception of plan, 3-year plan, 90-day elimination period, 100% home care benefit. enefits grow at 3% compounded annually. ALL NUMBERS ROUNDED OFF