In the last ten years, much has happened to change the face of the long-term care industry. Not only did insurers not predict that Americans would be living longer when they began writing long-term care policies in the 1980s, they also failed to project the cost and scale of care around chronic illnesses and disabling maladies such as dementia. That in turn led to policies being severely underpriced for years.

Companies were on the hook to pay out claims not only longer than they anticipated, but instead of paying out on one claim for one person, they were now looking at paying out on 2 or 3 claims for the same person in their lifetime. In addition, the older, richer plans that offered riders such as a 10 pay option (a ten year premium pay option), an indemnity rider (the option to receive your full daily benefit amount to use as you want even if you only received services for a portion of it) or lifetime benefits are things of the past. Companies such as Prudential Financial, Unum, Met Life, and Berkshire decided to exit from the long-term care arena rather than take on more risk. Unlike life insurance policy holders, long term care policy holders tend not to let their policies lapse in the face of rising consumer prices. Most policies, including their inherent risks, continue to stay on insurers’ books.

The statistics on this emerging marketplace tell us that apart from the fact that people are living longer and that more and more people are being diagnosed with dementia, we know that women make up 65% of all claims. As a result, companies like Genworth and John Hancock are replacing their older products with gender specific ones. Women will have to pay more than men. We know that 10,000 people are turning 65 daily. This is a huge problem that the majority of baby boomers are unprepared for financially. Medicare does not cover long-term care. Medicaid will pay for various kinds and amounts of long-term care services that support the poor, but many states are cutting back on that.

Those who have retirement money set aside and choose to self insure may find themselves having to make difficult decisions about their own care, care of a loved one, or paying for their children’s college education. For this reason we are often referred to as the “sandwich generation.”

The players in the market vary by state. They are not all equal and when shopping it is also important to consider company ratings.

If you are thinking about purchasing a long-term care product, remember not to wait until your health starts to fail to shop for a policy. Since it is age and health based, the younger and healthier you are, the less expensive the policy will be.

As caregivers, we have the responsibility to make decisions about our own care and make provisions for that care.

Bonnie Auletta cared for her husband who was diagnosed with stage four non-Hodgkin’s Lymphoma at the age of 46. She holds degrees from The American College of Financial Services and the Fashion Institute of Technology. Ms. Auletta’s experience working in the long term care industry for the past ten years makes her an invaluable contributor to The Caregiver Space. She holds a Health and Life license and is a certified Long Term Care planner.