Long-Term Care Insurance Must Evolve

Aging has evolved, and there is no longer enough good information about the populations being insured, so every policy issued has more risk than it needs to.

Person holding the wrist of an elderly person

The costs of long-term care (LTC) have skyrocketed in recent years, leaving much of the aging population unprepared to fund care or age at home. The average annual cost of a semi-private nursing home room is now over $93,000, and home health aides are upward of $50,000. When planning for retirement and aging, in general, it’s critical to expect the unexpected and factor in these costs or ways around it, like LTC insurance. 

When we think about aging at home, most people think about their kids being around to help or acting as caregivers. Except now, those kids aren’t having kids 56% of Americans aged 18 to 49 don’t want to have children. As a result, as these generations age, there will be fewer caregiver options. It’s estimated that 50% of older adults will need long-term care at some point in their lives, yet only 7% of adults over 50 have an LTC policy. By investing in LTC insurance at a younger age, people have security available - no matter what level of support they may have as they age. That being said, finding an accessible insurance solution is not always easy.

Insurance is complex, and LTC insurance is no exception. Many pre-existing conditions like anxiety can disqualify people from consideration even if a person is otherwise healthy, so it’s important to look into programs that can help those individuals qualify for coverage down the road via preventative care. We have far more knowledge today about the significance of wellness as we age – knowledge that can paint a more accurate picture of the state of someone’s overall health beyond just one pre-existing condition.

For example, we now know that hearing loss can affect the chances of a person suffering from dementia later in life. We also better understand the importance of mobility, nutrition and cognition support as we age. What deems a person healthy and “low risk” has changed on the clinical side, but we have yet to find a way to properly incorporate that new information into insurance policies.

See also: We Need to Care for the Caregivers

On the carrier side, there is a wealth of unused data on aging populations that would make LTC coverage less risky and expensive to provide. Too often, the aging population is treated as a monolith; insurers don't look at the needs of different aging cohorts. The needs of a 90-year-old person in 2022 are vastly different from the needs of a 70-year-old, and the risk signals are, too. This perspective has contributed to a cycle that has made LTC extremely undesirable for carriers; there is not enough information about the populations being insured, so every policy issued has more risk than it needs to. 

Traditional risk signals such as death of a spouse and change of address combined with supplementary data like a person’s level of familial support, ability to use grocery or meal delivery services, access to online banking and more would help insurers better understand true risk. Having that holistic, 360-degree picture of health is important, especially as we age; those factors are often highly predictive of the likelihood someone will file a claim and the general success they would have aging in place. Giving carriers better insight into the changing needs of their policyholders means everyone wins. 

Aging has become financially unsustainable for all parties; life expectancy is getting higher, but care is getting more expensive. In an industry where everyone is currently losing, there’s a clear need for solutions that get to the root of the problem. Prioritizing wellness and properly using data offer myriad benefits for individuals and insurance providers. With the right tools, more people can enjoy the benefits of healthy aging.

Larry Nisenson

Profile picture for user LarryNisenson

Larry Nisenson

Larry Nisenson is the chief growth officer for Assured Allies.

For more than 25 years, he has held leadership roles in the insurance and financial services industry, including as chief commercial officer for Genworth's U.S. life insurance business, covering long-term care life and annuity products. The role also included oversight for CareScout's caregiver support services' commercial offerings. Prior to that role, Nisenson held senior leadership roles at Plymouth Rock Assurance, AXA Equitable, American General Life and Allstate. Nisenson started his career in financial services in 1995 as a financial adviser.

Nisenson received his BA from Rutgers University and attended the Global Executive Leadership Program at the Tuck School of Business at Dartmouth from 2018-2019. He also serves on the board of directors for the Rutgers School of Design Thinking, as well as the alumni board for Sigma Phi Epsilon, and is a public advocate and speaker on the caregiving dilemma that affects millions of people.


Read More