Demand For Long-Term-Care Insurance Grows
April 5, 1999
The prospect of perhaps spending their final years in a private nursing home has increasing numbers of Americans signing up for long-term-care (LTC) insurance.
- While relatively few people buy such policies on their own, the number of those covered for long-term-care has grown from fewer than one million in 1987 to over five million in 1996.
- The administration's fiscal year 2000 budget contains a provision which would allow the federal government to offer private LTC insurance to its own employees and their families, and the GOP wants to make LTC premiums fully tax-deductible.
- As baby-boomers move toward retirement the LTC insurance market is expected to expand rapidly, from barely $1 billion worth of policies sold so far to $20 billion, by some estimates.
- Nursing home costs average $40,000 a year -- but can be twice that in markets such as New York.
Experts say that for a 45-year-old, a decent LTC policy runs about $500 a year. But for a 70-year-old, the premiums can be six times higher.
A 65-year-old man has only a 14 percent chance of spending more than a year in a nursing home. For a woman the odds are higher, but still less than 30 percent.
Source: Howard Gleckman, "A Golden (Years) Opportunity," Business Week, March 29, 1999.
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