Fueled by tremendous population growth in the mature market and a rising demand among employers for enhanced benefit options, the market for long-term care insurance is growing rapidly. Consider the following facts:

• Persons 50 years and older make up more than one-fourth of the nation's population (America Ages, 1988).
• The net worth of this demographic exceeds $900 billion, and they want products that help them preserve and protect this wealth.
• More Americans today are concerned with financing long-term care than they are with paying for retirement (American Demographics, June 1997).
• By the year 2020, one out of every three workers will provide some type of care for aging or ill relatives (USA Today, 1994).
• Employers are increasingly concerned about the cost of reduced employee productivity, which is directly related to long-term care. This is currently estimated at $17 billion a year. These costs are expected to increase significantly as the population continues to age (Wall Street Journal, 1994).
• Long-term care insurance purchased individually or on a group basis through an employer or professional association is an increasingly important option to protect and preserve wealth and to provide care and support for individuals and their families.

People buy long-term care insurance to maintain their independence as long as possible, to avoid becoming burdensome to their loved ones, and to preserve assets and protect their family's quality of life. Click here to see chart (it will open a separate window).

In response to these market forces, the number of long-term care insurance policies sold has grown at an average rate of about 21 percent annually over the last 10 years, with more than 5.8 million policies sold as of June 30, 1998 (HIAA LTC Survey, 1999). Today, there are about 120 insurance companies offering long-term care insurance to a rapidly growing marketplace. Click here to see chart (it will open a separate window).

The vast majority of long-term care insurance policies sold today are individual policies. In 1997, the typical buyer of this coverage was 66 years old. The employer-sponsored market is a smaller but growing segment of the industry. The typical buyer here is a 43-year old employee (HIAA LTC Survey, 1999). Click here to see chart (it will open a separate window).

The number of employers offering a long-term care insurance benefit through the workplace is growing rapidly. Today, there are more than 2,000 employers offering this coverage (HIAA LTC Survey, 1999). Most employer-based long-term care is offered as a voluntary benefit on an "employee-pay-all" basis. Click here to see chart (it will open a separate window).

The market for long-term care insurance emerged from a combination of forces - primarily consumer demand and a resulting response by the insurance industry. When the industry recognized long-term care insurance as a feasible and attractive new product, it committed resources to develop and market that product. Early products offered only limited coverage and, as a result, had limited market appeal. Today's products draw on a wealth of technology and knowledge about long-term care risk and how it can be managed. As a result, insurers today can offer viable products with broad market appeal; consumers can select from a broad array of benefits that better meet their health care needs and financial security goals.

There is a great deal of choice and diversity in the marketplace. Consumers can buy coverage for a limited amount of time (e.g., one or two years of benefits) and for limited types of care (e.g., facility care only). Or they can buy a comprehensive policy that covers care at home or in community care settings, in an assisted living facility or a nursing home. And they can buy coverage that provides lifetime coverage for as long as they continue to need care.