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Private Long-Term Care Insurance:  Who Should Buy It and What Should They Buy?

Private Long-Term Care Insurance: Who Should Buy It and What Should They Buy?

Despite the growing interest in private long-term care insurance (LTCI), there has been little independent examination of how much protection LTCI policies provide consumers or whether LTCI policies are a worthwhile purchase for people of average means. This report draws on data from the 1998 Survey of Consumer Finances (SCF) and the 1996 Medical Expenditures Panel Survey (MEPS) to explore the feasibility of LTCI for working families and older adults. Specifically, the report looks at how many working-age families can afford LTCI, whether it is a sensible investment for people who are decades away from requiring long-term care, and how LTCI policies can be made more flexible, to keep pace with changes in long-term care delivery and financing. The report also examines the affordability of LTCI for older people, what kind of policies make sense for seniors, and whether there are less costly products that might reach more buyers and still provide some meaningful protection.