Who Buys Long-Term Care Insurance?
In 2005, roughly 7 million LTCI policies were in force in the United States.4 Most policies sold today (90 percent) cover services received in a range of settings, including nursing homes, assisted living facilities, and in the home. Typically, policies reimburse the insured for long-term care expenses up to a fixed amount, such as $100 or $150 per day. In 2005, the typical purchaser was age 61 and had fairly substantial income and assets. Nearly half (49 percent) of purchasers had incomes over $75,000 per year and more than three-fourths (76 percent) had over $100,000 in liquid assets. By comparison, only 30 percent of the general population age 50 and older had liquid assets in excess of $100,000.5 To receive benefits, the insured must meet the policy’s disability criteria. Nearly all policies define disability as either severe cognitive impairment or the need for help in performing at least two “activities of daily living” such as bathing and dressing. According to a study that trac
