Employees who buy long-term care insurance under a group plan at the workplace are younger than those who buy LTC coverage on the individual market, reports the American Association for Long-Term Care Insurance.
The California-based trade group found that 24% of buyers purchasing LTC coverage through an employer-sponsored plan were between the ages of 35 and 44, while only 5% of consumers who purchase LTC insurance on an individual basis fell into that age category.
Even in the 45-to-54 age range, the proportion of individuals buying LTC protection in a group plan (36%) outpaces the proportion of those buying the insurance on their own (24%). By contrast, 53 % of individual purchasers were between the ages of 55 and 64, compared to only 23% of group buyers, according to the 2008 data by AALTCI.
Group customers are more likely to select longer coverage and collect claims against their policy at a younger age, compared to individual buyers. The organization reports that 8.2 million Americans have LTC insurance, and about 400,000 new policies or group certificates are issued annually.
With group coverage, the average premium cost for employees between ages 45 and 55 was $690. The data shows, however, that participants in that age category could face premiums as low as $430 per year or as high as $985 per year.
In the study, the largest open claim under a group plan exceeded $490,000, and the member had been on claim for over nine years.
AALTCI also analyzed claims being paid to members covered by an employer-sponsored LTC insurance. For example, 13% of new claims opened during 2008 were for individuals younger than age 60, and 11.5% of new group LTC claimants file their claim during the fourth or fifth year of their coverage.
“Because many employer-sponsored plans offer some form of simplified underwriting or even guaranteed issue, we expected to find more people qualifying for benefits at younger ages,” explains Jesse Slome, AALTCL’s executive director.
The trade group examined data on 95,000 purchasers of employer-sponsored LTC insurance and over 200,000 individual customers.
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