Why Is The Market For Long-Term Care Insurance So Small?

  1. 870 POINTS
    William Bridgers
    Specialist, LTCi, DI, Annuities, Life, Designs In Life, LLC, Utah
    In my opinion there are three factors that regulate the size of the long-term care insurance market: - Fear.  No one wants to consider, discuss, or especially visualize themselves as unable to take care of normal daily activities of elderly life.  It’s almost as if some people say, "If I don't think about it, it won't happen to me".  There is great anxiety over whom among their relatives or close friends might end up being their caregiver.  Many people are scared that they won't be able to afford the cost of long-term care.  They simply do not want to "go there".  It is too scary.- Denial.  "If I ever get that way, just take me out in the back yard and shoot me" is the classic sign of superficial denial.  Such a statement is not made with any degree of sincerity, but what it really says is that the person knows it could happen and that they do not want to live that way and be a burden to their spouse of extended family.  But, not to worry.  There must be a government program out there that will take care old people that have nowhere to go when they can't take care of themselves.  Certainly, in a country as rich as ours, no one will allow another to die alone or in the gutter. - Lack of experience.  The vast majority of people age 45-65 have not had to care for an elderly relative or close friend.  They have no idea of the psychological and emotional energy expended in taking care of a person 24/7/365.  They have never gotten an invoice from a skilled nursing service or had to go shopping for a facility and compare prices for monthly care, nor have the ever even been inside a nursing home and seen the conditions that some elderly have to endure because they didn't have a choice. To turn the question around a bit:  “Who are the people that do buy their own long-term care insurance?”  Most of those that do have gone through personal care giving.  They know the challenge.  They know the commitment.  They know the costs.  They know the sacrifices that others in the family have to go through.  They know that extended, expensive, long-term care can effect two - even three - generations.About 8% of the American population has purchased their own long-term care insurance.  About 17% or more of that same population is going to need two years or more of skilled long-term care, either at home, or in a facility or both.  Medicare is currently footing about 30-40% of that bill.  As the boomer demographic moves through the age of needed care, who is going to pay for it? 
    Answered on August 29, 2013
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  2. 63333 POINTS
    Peggy Mace
    Most of the U.S.
    The market for Long Term Care Insurance really is not a small market. Thousands of people who need Long Term Care Insurance do not purchase it for one reason or another: price, denial, and lack of information all play a part. However, the market is reduced by age (most people do not have an interest in purchasing long term care insurance before age 50), health (at older ages, more people are disqualified due to health problems), income (many retired persons do not have the income to sustain payment of long term care insurance premiums), and assets (without assets to protect, there is less need for LTCI coverage).
    Answered on December 17, 2013
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