Since the beginning of the 1980s, long-term care insurance has evolved from being virtually nonexistent to being an important form of insurance product carried by an estimated 5 million persons. The number of insurance companies with individual long-term care products has gradually increased to about 100, and the major providers of employee benefits now make group products available.

During its relatively short life, long-term care products have been hailed as a major source of financial security and criticized as a coverage that fails to meet consumers� real long-term care needs. State and federal legislation affecting coverage has also been common. In this environment long-term care products have continued to evolve, with newer and more comprehensive products frequently being introduced. Long-term care coverage can probably best be described as having grown from infancy to somewhere between the childhood and teenage years. Coverage will change to meet consumer demands and expectations, and the largely untapped market for coverage will continue to grow as the American population ages.

The first portion of this chapter looks at the need for long-term care. This is followed by a brief description of sources of long-term care other than insurance. The chapter continues with a discussion of how and why insurance policies have evolved into the products now being offered. It then contains an analysis of the more common products in the marketplace today�both individual and group. The chapter concludes with a checklist for comparing policies.