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Life and Long-Term Care: Americans Seek Security

Author

Karen R. Terry, FLMI
Assistant Vice President, Insurance Product Research
LIMRA and LOMA
kterry@limra.com

May 2025

The need for long-term care services continues to grow as the U.S. population ages and more people reach the point of needing services. The pandemic brought heightened awareness of this issue along with heightened awareness of personal health and financial risks in general. While some of the immediate worries have faded, the ability to pay for long-term care services remains a top concern for over a third of adults. As the need has grown, the solutions for paying for long-term care needs have changed. While stand-alone long-term care was the primary coverage option in the past, the availability of life insurance products with embedded or optional long-term care benefits has increased. These products have surpassed stand-alone long-term care as the primary solution sold in the market today.

Combination Products

Consumers’ interest in combination products increased during the recent pandemic, as did interest in many products. That interest is starting to decline, but is still above prepandemic levels, with 2 in 10 consumers extremely or very likely to buy in the next year. Demand is higher among younger generations and especially for those who are currently primary caregivers. Millennials are impacted the most by this issue. According to Pew Research, people in their 40s are most likely to be ‘sandwiched’ between caring for children and older adults. Millennials have the highest level of long-term care concern, the highest level of caregiver stress, and the highest percentage in our study that are providing full- or part-time care for an older adult. Not surprisingly, it’s the people who see the impact of caregiving on a daily basis who understand the need the most. More than half of primary caregivers are extremely or very likely to consider a combination lifelong term care product compared to 2 in 10 overall. This fits with what we’ve seen regarding interest in other products.

Figure 1. Percent That Would Consider a Life Combination Product: Caregivers

Filter the data in this chart by clicking on a color bar in the chart legend.

What’s the Appeal?

In a recent study, we explored the features and benefits that come with these products and what makes them appealing. Consumer interest in these products is primarily centered around creating a feeling of financial security and planning for healthcare needs as they age. They feel that the idea of a product that covers both life and long-term care makes sense; however, benefits specific to this product such as the efficiency and value of covering both life and long-term care needs were low on the list of reasons they would consider buying. Additionally, the ability to easily qualify for coverage and locked-in premium rates are valuable to half of consumers who would consider a purchase. Given the history of stand-alone long-term care insurance, this isn’t surprising. Consumers find an alternative that avoids the rate increases older products have experienced in recent years appealing. The life insurance death benefit and cash value are also valued more highly than the long-term care related financial benefits.

Features and Benefits

What is important, when looking at product features that matter to potential buyers, is features that support a person’s ability to receive care at home rather than in an assisted living or skilled nursing facility. The top features include the flexibility to choose between care at home or at a facility, wellness benefits to help maintain health and family support for care coordination and finding caregivers. The vast majority prefer to receive care at home either exclusively or as the first step toward moving to a facility if necessary. This preference has increased since we last conducted this study in 2021.

Age impacts care location preferences. Older generations tend to prefer the hybrid home to facility approach. Caregiving experience also impacts preferences. “Home to facility” was the top choice for all regardless of experience, but those who are currently part-time caregivers have the strongest preference for this option. Primary caregivers are more likely to have a fully at-home preference. Interestingly, those under a high level of caregiving stress are slightly more likely to prefer the straight-to-facility option, but otherwise stress has a minimal impact. Personal experience, finances and values are likely driving these preferences.

Figure 2. Percent That Would Consider a Life Combination Product: Caregiving Stress

Filter the data in this chart by clicking on a color bar in the chart legend.

Conclusion

Higher consumer interest and rising caregiving needs provide an opportunity. Demand might be higher still if it weren’t for the fact that many people who understand the need for long-term care insurance think that they are covered when they are not. About 14 percent believe they own long-term care insurance, and 10 percent believe their life insurance product includes a long-term care benefit. In actuality, about 2 percent of U.S. adults own long-term care insurance. Combination products remain an interesting market for carriers to explore in the next few years.

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