LOS ANGELES – A new study of 12 short-term care insurance policies examines policy features including Benefit Period, Elimination Period and Optional Riders.
The study was conducted by CSG Actuarial and reported by theNational Advisory Center for Short Term Care Information part of the American Association for Long Term Care Insurance (AALTCI).
“Changes in health care insurance benefits, Medicare coverage and long-term care insurance are creating heightened interest in short-term care or recovery care products,” says Jesse Slome, director of the National Advisory Center for Short Term Care Information. Short-term care products are defined as those providing coverage for one year or less.
“There is potential for significant growth,” says Bryan Neary, FSA, MAAA, Principal and Consulting Actuary for Omaha, Neb.-based CSG Actuarial. “Several new insurers are entering the marketplace and policy sales and premium should grow in the years to come.”
According to the study, 91.7% of the companies offered policies with a 360-day Benefit Period (BP). Some 83.3% offered a 150-200 day option and half (50%) offered a 90-day BP.
“One of the features that makes these products extremely attractive is the ability to select a 0-day Elimination Period (EP),” Slome explains. “Most traditional long-term care insurance policies require that a doctor certify a need for care lasting longer than 90 days and have a 90-day EP. With a 0-day EP the policyholder accesses policy benefits early on when they need care.”
The study found that 66.7% of available policies offered a 0-day Elimination Period. Some 75% offered a 20-day EP and a third (33.3%) offered a 30-day EP.
Just over half of the policies (58.3%) offered an inflation growth rider that increased base benefits by 5% compounded annually. Half (50%) offered a 5% simple inflation option.
About the National Advisory Center for Short Term Care Information and AALTCI: Based in Los Angeles, the American Association for Long-Term Care Insurance and the National Advisory Center for Short Term Care Information were established to create consumer awareness and support insurance professionals who market protection products. To learn more about short-term care insurance products, visit the special section within the AALTCI website (www.aaltci.org/stc).