Long Term Care Insurance Market

The global Long Term Care Insurance Market is valued at USD 28.1 Billion in 2022 and is projected to reach a value of USD 47.8 Billion by 2030 at a CAGR (Compound Annual Growth Rate) of 7.9% between 2023 and 2030.

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The World Health Organisation (WHO) predicts that the number of persons aged 60 and up will double by 2050. In Estonia, Czech Republic and Chile, they estimate that by 2040-2050 the population of 65+ will be around 30% of the population, while Hungary estimates this to reach 24% by 2030, and Switzerland 8-10% of the population by 2030. Because of this demographic transition, there is a growing need for LTCI products to cover long term care costs. In addition, the baby boomer generation, born between 1946 and 1964, constitutes a significant portion of the population and will continue to age in the coming years. According to the U.S. Census Bureau, by the year 2030, all baby boomers will be over the age of 65. This aging population is expected to lead to an increased demand for long term care services.

According to Centers for Medicare & Medicaid Services, U.S. health care spending grew 2.7 percent in 2022, reaching $4.3 trillion or $12,914 per person. Among the EU Member States, Germany (12.8 %) and France (12.2 %) had the highest healthcare expenditure relative to GDP in 2020. The escalating costs of healthcare services have prompted individuals to seek financial protection through insurance coverage. Aditionally, as per the Centers for Disease Control and Prevention (CDC), approximately 80% of older adults have at least one chronic condition and 50% have two or more. Managing chronic diseases requires regular medical attention and assistance with ADLs, which can be costly without insurance coverage. Hence, the rise in chronic diseases among the aging population has fueled the demand for Long Term Care Insurance.

Furthermore, emergence of hybrid long term care policies is another key factors influencing the growth of Long Term Care Insurance market. These policies combine long term care benefits with traditional life insurance or annuities. For instance, Aegon NV issued a new individual long term care, or LTC, policies covering 60,664 lives in 2021, about 55,000 more customers compared to 2020. In addition, many employers now offer LTCI as part of their employee benefits package, recognizing the need for long term care coverage. Group policies can provide more affordable options and easier access to LTCI for employees and their families.

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Key Highlights

• North America created more than 48.50% of revenue share in 2022.
• Asia Pacific is expected to witness the market's most considerable growth during the forecast period.
• On the basis of Type, asset-based life/annuity plans with Long Term Care Insurance segment dominated the market and contributed more than 39.5% of the total revenue share in 2022.
• Based on Policy, the Group Policy segment revealed the most significant market growth and contributed more than 34.6% of the total revenue share in 2022.
• Based on Service, the Hospice Care segment accounted the potential market growth with more than 28.4% of the total revenue share in 2022.
• Based on Age, the Over 65 Years Old segment accounted the potential market growth with more than 44.9% of the total revenue share in 2022.

Economic Insights

The global supply chain for long term care services encompasses a range of providers, including nursing homes, assisted living facilities, home healthcare agencies, and other care providers. Disruptions in the supply chain, such as shortages of healthcare workers or facility closures, can impact the availability and quality of long term care services. Insurance companies closely monitor the supply chain to ensure that policyholders have access to necessary services, as it directly affects claims and policy utilization. Economic growth is a significant factor influencing the Long Term Care Insurance market. Higher GDP growth rates indicate increased economic activity and disposable income, which can positively impact the demand for insurance products, including Long Term Care Insurance. As economies grow, individuals may have greater financial resources to invest in insurance coverage for their future long term care needs.

Top Market Trends

1. Increasing Aging Population: The global population is aging at a rapid pace, primarily due to declining birth rates and advancements in healthcare technology. According to the World Health Organization (WHO), the number of people aged 65 and above is projected to reach 1.5 billion by 2050, doubling the current figure. With the aging population, the demand for long term care services is expected to surge, and as a result, the need for Long Term Care Insurance is also likely to increase.

2. Increasing Prevalence of Chronic Diseases & Disabilities among the Aging Population: Chronic diseases such as cardiovascular diseases, cancer, diabetes, and respiratory diseases are becoming more common, and they often require long term care. According to the Centers for Disease Control and Prevention (CDC), approximately 80% of older adults have at least one chronic condition and 50% have two or more. Managing chronic diseases requires regular medical attention and assistance with ADLs, which can be costly without insurance coverage. Hence, the rise in chronic diseases among the aging population has fueled the demand for Long Term Care Insurance.

3. Changing Lifestyles and Increasing Urbanization: Rapid urbanization has led to changes in family structures, with more individuals living in nuclear families. This shift in family dynamics has resulted in reduced family support for elderly members, making Long Term Care Insurance a necessity to ensure their financial security. Moreover, the modern lifestyle characterized by hectic work schedules and increased mobility has made it challenging for individuals to provide care for their aging parents or relatives. This has further incentivized people to opt for Long Term Care Insurance plans to ensure that their loved ones receive the necessary care without causing financial strain.

Market Segmentation

The global Long Term Care Insurance market can be categorized on the following: Type, Policy, Service, Age, and Regions. Based on Type, the market can be categorized into Traditional Long Term Care Insurance and Asset-based Life/Annuity Plans with Long Term Care Insurance. Furthermore, based on Policy, the market is categorised into Individual Policy, Group Policy, and Association Policy. In addition, based on Service, the market is sub-segmented into Home Healthcare, Hospice Care, Adult Day Care, Home Personal Care, Community Facilities, and Respite Care. Additionally, based on Age, the market can be split between Between 18 & 64 and Over 65 Years Old. Likewise, based on Region, the market is segmented into North America, Europe, Asia Pacific, Latin America, and Middle East & Africa.

Based on Type

Asset-based Life/Annuity Plans with Long Term Care Insurance to Accommodate Maximum Market Share due to Long Term Care Benefits

In 2022, asset-based life/annuity plans with Long Term Care Insurance controlled the market. These programs combine Long Term Care Insurance with a life insurance policy or annuity. They require single large or multiple significant payments over a set time. In addition, some asset-based plans have riders for inflation protection and return-of-premium, which can improve benefits but come at a cost. All these benefits propel the segmental growth of the market.

Based on Policy

Group Policy to Express Dominion owing to Better Integration of Technology

The group policy is expected to increase the fastest between 2023 and 2030. A group policy is typically provided to employees or members by a business or organization. It ensures a group of people under a single master policy. Because the risk is dispersed over a wider pool of people, group policies frequently have lower premiums than individual policies. However, The coverage alternatives may be more limited, and you may need more control over the specific benefits and coverage levels. Individuals with access to group policies through their employers or membership in a group or organization benefit from them.

Based on Service

Home Healthcare to Mention Dominion owing to Better Integration of Technology

Home healthcare is expected to expand the fastest between 2023 and 2030. The growing senior population, rising healthcare costs, and the increased incidence of chronic diseases drive up demand for home healthcare services. Furthermore, the COVID-19 epidemic has increased demand for at-home care, as many patients with chronic conditions have looked into this enticing option. According to the US Bureau of Labour Statistics, employment in the home healthcare sector is expected to rise 21% over the next decade, generating 711,700 positions each year on average.

Based on Region

Asia Pacific to Lead Global Sales owing to Changing Lifestyles and Increasing Popularity

The Asia-Pacific region's demand for Long Term Care Insurance is predicted to rise due to the thriving insurance sectors in countries such as China and India. However, there is a growing imbalance between supply and demand for aged care in the region, which is influenced by shifting family and labor market patterns and shifts in cultural values surrounding parental care. Purchasing tactics such as directing service provision, setting prices, employing service-level agreements, and competitive tendering can be used to form long term care (LTC) markets. Historically, emerging Asia-Pacific economies had lower insurance density and penetration than developed Asia-Pacific markets, but this is likely to change. A study in China analyzed willingness to pay for LTC insurance and investigated demand drivers.

With an aging population, North America is undergoing a demographic change. As people live longer lives, the demand for long term care services grows. This tendency has contributed to an increase in interest in Long Term Care Insurance to meet projected future care demands. Furthermore, the rising expense of long term care is a significant element driving the need for insurance coverage. Long term care services can be costly, and individuals may have financial difficulties in receiving the care they require without insurance. Long Term Care Insurance can reduce these expenditures while protecting one's savings or assets.

Competitive Landscape

The Long Term Care Insurance market's competitive landscape includes the market ranking of the key market rivals, new service/product releases, collaborations, business expansions, and growth plans. For example, VRGL, Inc. ("VRGL"), a wealth management sector provider of institutional-grade analytics and automated data extraction, has raised $15 million in a Series A round led by MissionOG and FINTOP Capital in August 2022.

The key players in the global Long Term Care Insurance market include - Northwestern Mutual (U.S.), MassMutual (U.S.), LTC Financial Solutions (U.S.), Agent Review (U.S.), Transamerica (U.S.), John Hancock (U.S.), State Farm (U.S.), Genworth (U.S.), Golden Care (U.S.), Continental Insurance (U.S.), ACSIA Partners (U.S.), MedAmerica (U.S.), New York Life (U.S.), CLTC Insurance (U.S.), Nationwide Mutual Insurance Company (U.S.) among others.

Recent Market Developments

• August 2022: VRGL, Inc (“VRGL”), a provider of institutional-grade analytics and automated data extraction to the wealth management industry, has raised $15 million in a Series A round led by MissionOG and FINTOP Capital.
• October 2020: ExteNet Systems announced that long term institutional investor John Hancock Life Insurance Company (U.S.A) is leading a consortium that will acquire approximately 30% of the Company.

Segmentation of the Global Long Term Care Insurance Market