As boomers age, this coverage looks hot

As boomers age, this coverage looks hot

America’s more than 77mn baby boomers are getting ready to retire, with several already past age 65. Still more are in their 40s and 50s—the prime time to start planning for their future.

Part of that planning will likely include considering a long-term care policy, says Tom Riekse, Jr., managing principal at LTCI Partners in Lake Forest, Ill.

“People become aware of the need for [long-term care insurance] in their 40s because at that point, they normally have adult parents who are experiencing long-term care issues,” Riekse said. “They think about it for a while, and then generally buy in their mid-50s.”

“It’s not like life insurance, where there is some level of urgency, such as marriage or purchasing a house,” he added. “With long-term care, there’s not that one triggering life event.”

Given that roughly a quarter of the country falls right into that age group, Riekse said he expects demand for long-term care coverage will increase in the near future.

However, he warns that long-term care is still primarily “a product for the affluent” and producers should be careful about who they target.

“The premiums can average $2500 or $5000 annually for a couple. You’ve got to be able to afford that to make that happen,” he said. “A prospect for long-term care will be someone in their 40s or 50s who is a planner, has some savings and has a good income. Be realistic in terms of who you market to or who you approach with the product.”

Those premium rates are likely to increase this year as a result of the American Association for Long-Term Care Insurance’s new price index, which now reflects gender-based pricing.

According to the index, women and couples are now paying much more for long-term care while men are paying 15% less for coverage, compared to last January. Under employer-sponsored plans, however, men and women pay the same rates.

This affects how consumers will likely purchase their coverage, Riekse said—something producers should watch out for.

“If you’re a man purchasing [long-term care] from your employer, you may end up paying a little more than you would on your own,” he said. “If you’re a woman, you may get a better deal from your employer.”

Other advice for producers looking to enter the long-term insurance space?

“Know that it’s not going to be a walk in the park,” Riekse said. “It’s a niche product and [producers] won’t be product experts. They should really partner with a specialist.”

  • Andrew Gibson 1/21/2014 9:58:33 PM
    The cost of long term care insurance nowadays are on the rise mainly due to the expensive cost of long term care services. It is very expensive in nature especially for women and couple nowadays. But you need to understand that security and financial stability in the future comes with a price. It's really beneficial especially to people who will need extensive care and don't want to rely on their family members in the future. It's pricey but don't worry because there are ways to cut your long term care insurance costs. You can enjoy lower rates if you purchase early, avail of health or group discounts and design a small policy that can still satisfy your future needs.
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  • Castor 5/14/2014 8:25:00 PM
    I like to think that long-term care insurance is an age-triggered kind of insurance, the exact opposite of life, car or health insurance that demands urgency. People will start considering the former when they reach the age of 40+ but will still not buy it until they are 50+ years old. According to, the situation itself is the main cause why many Americans continue to disregard ltc despite the the enormous help it can offer when they're too frail and weak to move around. I just hope that soon we'll all soon realize that the subject of long-term care planning is time-sensitive.
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