New perspectives on the affordability of long-term care insurance and potential market size.

A study of over 6,000 elderly long-term care insurance purchasers shows that the typical policy sold costs $102 per month, covers 5 years of nursing home care and pays $69 per day in benefits. Close to one-third of the purchasers have incomes less than $20,000, most (63%) use some savings to pay for premiums, 37% spend more than 5% of income on policies. Most nonpurchasers cited reasons unrelated to policy cost to explain why they did not buy a policy.