Industry Overview: Where We Are in 2024
The LTC insurance industry has undergone significant transformation over the past decade. After years of challenges—rate increases, carrier exits, and consumer skepticism—the market is finding a new equilibrium with different products and more sustainable pricing.
~7.5M
Americans with LTC coverage
Individual policies in force
$14B+
Annual premiums collected
Traditional + hybrid combined
60%+
New sales are hybrids
Up from 25% a decade ago
Hybrid Products
Life insurance and annuity + LTC combinations continue to dominate new sales, offering guaranteed premiums and return of value.
Traditional Standalone LTC
New traditional LTC sales continue declining, though existing policies remain in force. Fewer carriers offer standalone products.
Asset-Based Solutions
Repositioning existing assets (CDs, old life insurance, annuities) into LTC coverage is increasingly popular.
Public Programs
State-level LTC programs (like WA Cares) are emerging, creating a new public/private coverage landscape.
Product Evolution
The products available today look quite different from those sold 20 years ago. Here's how the landscape is shifting:
Life Insurance + LTC Hybrids
GrowingSingle premium and limited-pay whole life with LTC acceleration riders. Guaranteed premiums, death benefit if LTC not used.
Expected to remain the dominant product category
Annuity + LTC Hybrids
GrowingFixed annuities with LTC benefit multipliers. Often simplified underwriting. Good for repositioning safe money assets.
Growing as carriers develop more competitive products
Traditional LTC Insurance
DecliningStandalone LTC policies with ongoing premiums. Fewer carriers, higher prices, but still offers best pure LTC leverage.
Niche but still available from several strong carriers
Chronic Illness Riders on Life Insurance
GrowingLife insurance with riders allowing death benefit access for chronic illness. Not true LTC but provides flexibility.
Increasingly common on new life policies
Short-Term Care Insurance
StableLimited benefit periods (6-12 months), easier underwriting, lower premiums. Fills gap for those who can't qualify for traditional.
Steady niche serving older and less healthy applicants
The Hybrid Advantage
Pricing Trends
Pricing in the LTC market reflects lessons learned from decades of experience:
Current Pricing Environment
New Traditional LTC Policies
Higher but stableNew policies priced more conservatively based on actual claims experience. Rate increases on new policies less likely than on older policies.
Existing Traditional Policies
Rate increases ongoingMany older policies still experiencing rate increases as carriers address past underpricing. This is largely a legacy issue.
Hybrid Policies
Guaranteed premiumsHybrid premiums are contractually guaranteed—no rate increases. Higher initial cost but predictable long-term expense.
What's Driving Prices
⬆️ Factors Increasing Costs
- • Rising care costs (4-5% annually)
- • Longer life expectancy
- • Low interest rates (past decade)
- • Higher claims than originally projected
- • Fewer policy lapses than expected
⬇️ Factors Moderating Costs
- • Better actuarial data from claims experience
- • More conservative pricing assumptions
- • Rising interest rates (since 2022)
- • Product innovation reducing carrier risk
- • Technology improving efficiency
Carrier Landscape
The number of carriers offering LTC products has consolidated significantly, but strong options remain:
Major Players
Leading carriers with strong commitment to the LTC market, multiple product options, and stable financials.
Active Carriers
Active participants offering traditional LTC, hybrids, or both. Solid options with various product strengths.
Limited/Niche
More limited product offerings or availability. May specialize in specific products or markets.
Carrier Stability Matters
Regulatory Changes
Regulation is evolving at both state and federal levels:
Washington State WA Cares Fund
First state public LTC program launched in 2023. $0.58/$100 payroll tax provides $36,500 lifetime benefit. Other states watching closely.
California LTC Task Force
California studying potential public LTC program. Recommendations expected, though implementation timeline uncertain.
Rate Stabilization Regulations
Many states have strengthened requirements for rate increase justification and approval, providing more policyholder protection.
Partnership Program Expansion
Most states now offer LTC Partnership programs, providing Medicaid asset protection for those who buy qualifying policies.
Federal SECURE Act 2.0
Allows 401(k) withdrawals for LTC insurance premiums without penalty (up to limits). Expands funding options.
Technology & Innovation
Technology is transforming how LTC insurance is sold, serviced, and used:
Digital Applications
Online applications, e-signatures, and faster underwriting. Some carriers offer partially automated underwriting decisions.
Impact: Faster, easier buying process
Care Coordination Apps
Carrier apps helping policyholders find care, manage claims, and coordinate with providers.
Impact: Better claims experience
Wellness Integration
Some carriers exploring wellness incentives using health data, activity tracking, and preventive care.
Impact: Potential future premium discounts
AI in Underwriting
Machine learning helping assess risk more accurately using broader data sets and predictive models.
Impact: More accurate pricing, faster decisions
What It Means for You
These industry trends have practical implications for consumers considering LTC coverage:
Consumer Implications
Good options still exist
Despite industry changes, quality coverage is available from stable carriers. The market has consolidated but not disappeared.
Hybrids deserve serious consideration
If you've dismissed LTC insurance due to 'use it or lose it' concerns, hybrids address this objection directly.
Don't wait for 'better' products
Products will continue evolving, but the cost of waiting (higher premiums, health risks) outweighs potential future improvements.
Carrier selection matters more than ever
With fewer carriers in the market, choosing one with strong financials and LTC commitment is crucial.
Traditional LTC still has a place
For those who want maximum LTC leverage and can accept premium risk, traditional coverage remains available.
Watch state programs
Public programs may provide a base layer of coverage, but are unlikely to replace the need for private insurance for comprehensive protection.
The Bottom Line
The LTC insurance industry is healthier and more stable than it was a decade ago. Products have evolved, pricing is more sustainable, and options exist for most situations. The best time to explore your options is now—while you have the health to qualify and the time to benefit from coverage.
Frequently Asked Questions
About the Author
Brian Thompson
LTC Insurance Specialist
Brian has spent over 30 years helping families navigate long-term care planning. As an independent broker licensed in 48 states, he specializes in asset-based LTC strategies that keep your money working for you—no matter what happens.