New York Times Examines Low Popularity of Long-Term Care Insurance in U.S.

The New York Times on Sunday examined the low popularity of long-term care insurance in the U.S. According to the Times, only 10% of U.S. residents ages 65 and older have long-term care insurance, "with many holdouts saying that they are intimidated by high costs and the bewildering array of benefit levels, deductible periods and other features."

Long-term care insurance often requires a lifetime commitment to one insurer, and "premiums can rise sharply if the policyholder switches." In addition, policyholders can "pay premiums for decades with no way to predict if their coverage is what they will need," the Times reports.

Policyholders can spend more than $10,000 annually on long-term care insurance premiums for full coverage. However, a recent study by Milliman, a consulting firm, found that only a small percentage of long-term care insurance policyholders require full coverage, and an increased number of specialists have begun to recommend "more modest policies for which the policyholder pays a bigger share of the costs," the Times reports.

"Some insurance agents still strongly believe that people should buy the maximum possible for a policy to be worthwhile," Dawn Helwig, a principal at Milliman and co-author of the study, said, adding, "But those policies are very expensive. It puts you into the Cadillac market all the time, and a lot of Chevy owners are missed."

According to the Times, a "lesser-frills policy, though still costly, may provide the safety net that many risk-averse elderly people need" (Garland, New York Times, 7/24).