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By Bernard A. Krooks, 

Certified Elder Law Attorney

Special Guest Contributor: 

Joel Krooks

It’s widely understood that long-term care is expensive and getting even more so. Costs have risen faster than overall inflation, and the aging U.S. population has long been a source of concern for programs like Social Security and Medicare. Long-term care insurance (LTCI) has sometimes been proposed as a partial solution to this growing challenge.

However, the concept isn’t without complications. Life expectancy has generally been on the rise. When long-term care insurance first gained attention in the mid-1970s, the average life expectancy for a 65-year-old was about 16 years—14 for men and 18 for women. Now a 65-year-old man is expected to live 16.95 years and a woman is expected to live 19.75 years.

Assuming longevity continues to rise alongside increasing healthcare costs and a growing prevalence of dementia, LTCI has become a riskier business for insurers. As a result, premiums must rise and underwriting standards become more restrictive.

The situation is even more complicated than it first appears. Many seniors who purchased long-term care insurance (LTCI) eventually let their policies lapse—something the industry anticipated and factored into its pricing. However, in the early years, lapse rates were lower than expected, leading to more policyholders holding onto coverage and filing claims.

While the U.S. population is aging, today’s seniors are, in many ways, healthier than previous generations. Rates of smoking, cancer, and several chronic diseases have declined. Yet at the same time, the prevalence of disabilities has risen—often triggering LTCI claims and increasing costs for insurers.

Parsing LTCI data can be challenging due to the many variables involved, but the American Association for Long-Term Care Insurance offers a valuable source of real-world insights. Their statistics cover everything from average claim amounts and premium trends by enrollment year to denial rates by age—unsurprisingly, nearly half of applicants in their 70s are declined coverage.

Only a small percentage of seniors purchase long-term care insurance, and these policies cover just about 5 percent of the total long-term care expenses nationwide.

So, should you consider buying LTCI? It depends. Some individuals may qualify for Medicaid and receive help with long-term care costs. Others may have enough savings and income to self-fund their care for many years.

The key takeaway: if you’re thinking about buying LTCI, timing is critical. Eligibility and premiums are far more favorable if you apply when you are younger than if you wait under you are older.

Bernard A. Krooks, Esq., is a founding partner of Littman Krooks LLP. He was named 2021 “Lawyer of the Year” by Best Lawyers in America® for excellence in Elder Law and has been honored as one of the “Best Lawyers” in America since 2008. He was elected to the Estate Planning Hall of Fame by the National Association of Estate Planners & Councils (NAEPC). Krooks is past Chair of the Elder Law Committee of the American College of Trust and Estate Counsel (ACTEC). Mr. Krooks may be reached at (914-684-2100) or by visiting the firm’s website at www.littmankrooks.com.