August 30, 2019

Baby Boomers Reshape US Demographics as LTC Insurance Increases Exponentially

A study completed by the Population Reference Bureau titled Aging in the United States highlights some remarkable trends in the US population. Some of the major takeaways are:

• Americans aged 65 and older will double by 2060 (from 52 million in 2018 to 95 million in 2060).
• Life expectancy has increased to 78.6 years in 2017 from 68 years in 1950.
• The baby boomer demographic shift and increased longevity may lead to a 50% increase in individuals 65 years and older who need nursing home care.
• All levels of long term care needs will also increase dramatically due to how many more Americans are living with Alzheimer’s disease- from 5.8 million today to 13.8 million by 2050.

As we can see, the US long term care system is about to undergo some substantial shifts in demand. Unfortunately, the long term care insurance policies many Americans have taken out to help protect against the financial impact of an extended nursing home stay or long term care will have on their family are increasing in cost, exponentially. Many carriers are no longer even offering this type of product- before year 2000 more than 100 insurance companies offered LTC insurance policies, there are now fewer than a dozen. And existing LTC insurance policies’ premiums are increasing dramatically, in some cases as high as 300%.

This is leading many who have LTC insurance policies to lapse them for financial reasons, and those who may want a policy may have trouble finding a viable product. And if you need long term care in the near future, such a policy would likely be cost prohibitive. For these reasons, among others, many people are turning to life settlements as a way to fund long term care needs. For an individual in need of long term care, a life settlement may help them fund all or part of the cost of long term care through the sale of their life insurance policy to a third party.

Life settlements are a tightly regulated transaction, and if you are interested in learning more about a life settlement it is recommended to discuss your case with a life settlement expert (either a life settlement provider or broker) who is licensed in your state. These life settlement experts have the experience and expertise to guide you to the highest valuation for your policy.