In the US, most people over 65 years old are expected to need long-term care, but coverage for this is currently limited. Technology such as wearables, voice assistants, robotics, and more could help by lowering insurance costs and expanding in-home care services.
Individuals over the age of 65 are expected to comprise more than 16% of the global population by 2050, according to the United Nations. In the US, the population is aging even faster: by 2030, 20% of the population will be over 65 years old.
Given this and the toll of the Covid-19 pandemic, interest in long-term care — which assists the elderly with everyday activities, such as dressing and bathing — has never been higher. But insurance plans focused on providing long-term care are still not common.
Long-term care insurance (LTCI) is largely unavailable in the US and coverage under the plans are offered is often limited, leaving the individual to bear the brunt of expenses. The challenge with creating LTCI plans is the high cost of payouts — but new technology could help reduce some of the biggest expenses.
Elder tech — technology that aims to assist senior citizens with managing their health — could help address the issue by keeping people at home for longer. This approach shifts costs that the insurers pay in claims from expensive institutional care to lower-cost in-home care, improving the profit margins of the line. With enough cost-shifting over time, prices would be likely to come down and more products would become available. Tech could also bring down the costs of in-home care by reducing the need for in-person visits. Both approaches could decrease claims payouts by insurers.
Below, we look at how wearables, voice-based assistants, and more could change the cost equation of long-term care insurance and boost its profitability.
why long-term care INSURANCE?
The value of long-term care insurance coverage to an individual is significant. A person buying a policy at age 60 will have paid approximately $52,000 in premiums by the time they are 82, at which time they would be entitled to $547,000 of total benefits, according to the National Association of Insurance Commissioners.