Dementia and LTSS: Actuarial Implications for Insurance Product Design, Pricing, and Risk Management

Background and Purpose

With increasing life expectancy and the aging of the population, long-term services and supports (LTSS) needs are expected to grow substantially in the coming decades. A significant portion of this future need will be associated with dementia, Alzheimer’s disease, and other forms of cognitive impairment. These conditions may affect not only the likelihood of needing LTSS, but also the duration, intensity, setting, cost, and type of services required.

The Society of Actuaries (SOA) Research Institute’s Aging and Retirement strategic research program is seeking research that is specifically focused on dementia-related LTSS needs and their implications for actuarial practice and the insurance industry. The intended purpose of this research is not to produce a general literature review or a consumer decision guide. Rather, the research should provide practical, data-driven information that actuaries, insurers, product developers, risk managers, and other LTSS-related professionals can use to anticipate, quantify, and prepare for the growing impact of dementia-related LTSS.

This topic is especially important because the impact of dementia on LTSS is not limited to the number of individuals with dementia and their families. It also involves changes in the mix of LTSS claimants, the use of home care, assisted living, memory care, nursing facility care, and other service settings; the availability of formal and informal caregivers; potential service shortages; and the cost differential between LTSS users with dementia and those without dementia. The research should distinguish clearly between incidence, prevalence, population aging, longevity, and demographic growth in the number of older adults at risk.

The desired research should further actuarial practice and inform risks critical to public financial security by helping actuaries better understand the expected future role of dementia in LTSS utilization, costs, product design, pricing, reserving, claim management, and service delivery planning.

While Medicare, Medicaid, Veterans’ Affairs benefits, and other public programs may affect LTSS utilization and financing, the primary focus of this research should be on actuarial and insurance-industry applications. Discussion of public programs should be limited to their relevance to private-sector LTSS costs, utilization, service availability, or insurance product implications.

Research Objective

The objective of this research is to develop a focused, actuarially useful analysis of dementia-related LTSS needs, costs, utilization patterns, and service capacity issues, with clear implications for the actuarial profession and insurance industry.

The research should address questions such as the following, to the extent feasible based on available data:

1. How do dementia, Alzheimer’s disease, severe cognitive impairment, and related memory conditions affect LTSS utilization compared with LTSS needs that are not dementia-related?
2. What proportion of LTSS utilization, claims, service episodes, or costs is currently associated with dementia or cognitive impairment, and how might that proportion change as the population ages?
3. How do dementia-related LTSS users differ from non-dementia LTSS users in terms of:
   • age at service need,
   • duration of service use,
   • intensity of care,
   • setting of care,
   • transition across care settings,
   • cost per episode or per claimant,
   • claim continuation patterns,
   • caregiver needs, and
   • likelihood of requiring facility-based or memory-care services?
4. What are the implications of dementia-related LTSS trends for private LTC insurance, combination products, other insurance products with LTSS exposure, and related actuarial functions such as pricing, reserving, underwriting, experience monitoring, assumption setting, and risk management?
5. What are the expected implications of dementia-related LTSS demand for service capacity, including home care, assisted living, memory care, nursing facilities, and paid caregiving workforce availability?
6. How might shortages in caregivers, facility capacity, or specialized memory-care resources affect future claim costs, access to care, claim adjudication, and policyholder outcomes?
7. What credible, consistent, and reliable data sources are available to support actuarial analysis of dementia-related LTSS utilization, costs, and trends? What are the strengths, limitations, gaps, and appropriate uses of those data sources?
8. What practical metrics, benchmarks, or modeling considerations should actuaries consider when incorporating dementia-related LTSS assumptions into insurance pricing, product development, reserving, experience studies, or risk assessments?

Expected Deliverables

The selected researcher is expected to produce a practical report and supporting materials that can be used by actuaries. Expected deliverables include:

1. Final research report
   A clearly written report summarizing findings, data sources, methodology, assumptions, limitations, and actuarial implications. The research should present quantitative, data-driven results, actuarial applications, uncertainty, causes of uncertainty, and limitations. The report should be objective and neutral; it should not advocate for a specific public policy position, financing mechanism, insurance product, provider model, or care setting. The report should be suitable for publication by the SOA Research Institute.
2. Executive summary for actuarial audiences
   A concise summary of the key findings, emphasizing implications for actuaries, including LTC insurance, combination products, pricing, reserving, product design, claim management, experience studies, and risk management.
3. Data-source inventory and evaluation
   A structured summary of relevant data sources that may be used to analyze dementia-related LTSS utilization, costs, duration, service setting, or care needs. This should include the strengths, weaknesses, credibility, timeliness, and limitations of each source.
4. Dementia-related LTSS utilization and cost framework
   A practical framework distinguishing dementia-related and non-dementia LTSS needs, including recommended definitions, key metrics, and considerations for actuarial use. The framework should address terminology such as dementia, Alzheimer’s disease, cognitive impairment, severe cognitive impairment, incidence, prevalence, service utilization, and claim duration.
5. Comparative analysis of dementia-related and non-dementia LTSS
   To the extent supported by available data, an analysis comparing dementia-related LTSS users with other LTSS users by service setting, duration, intensity, cost, and care pathway.
6. Forward-looking assessment
   An assessment of how dementia-related LTSS demand may evolve over the next decade and beyond, taking into account population aging, longevity, changing family caregiving capacity, formal workforce constraints, evolving treatment patterns including drugs, and service-setting capacity.
7. Actuarial implications section
   A dedicated section translating the research findings into practical considerations for actuaries, including potential uses in pricing, reserving, product development, assumption setting, experience monitoring, claim management, and risk assessment.
8. Visual exhibits and tables
   Tables, charts, and other exhibits that clearly communicate key findings, including any available estimates of relative cost, duration, service mix, or utilization differences between dementia-related and non-dementia LTSS.
9. Limitations and areas for future research
   A transparent discussion of data limitations, uncertainty, gaps in current evidence, and areas where additional SOA research or industry data development may be valuable.

The SOA Research Institute expects the work to be grounded in credible data and actuarial reasoning. Researchers should describe the proposed methodology in sufficient detail, including how they will identify, validate, and use data sources; how they will distinguish dementia-related LTSS from other LTSS needs; and how they will ensure the final product is directly useful to practicing actuaries and insurance-industry stakeholders.

The SOA Research Institute has available for this project up to $48,000; this budget cannot be exceeded. If researchers are unable to provide all deliverables within that budget, please provide a proposal that clearly articulates the deliverables that can be met within that budget.

Proposal Requirements

To facilitate the evaluation of proposals, the following information should be submitted:

1. Resumes of the researcher(s), including any graduate student(s) expected to participate, indicating how their background, education and experience bear on their qualifications to undertake the research. If more than one researcher is involved, a single individual should be designated as the lead researcher and primary contact. The person submitting the proposal must be authorized to speak on behalf of all the researchers as well as for the firm or institution on whose behalf the proposal is submitted.
2. A clear articulation of the project scope.
3. An outline of the approach to be used (e.g. literature search, model, etc.), emphasizing issues that require special consideration. Details should be given regarding the techniques to be used, collateral material to be consulted, and possible limitations of the analysis.
4. A description of the expected deliverables to be provided and any supporting data, tools or other resources.
5. Cost estimates for the research, including computer time, salaries, report preparation, material costs, etc. Such estimates can be in the form of hourly rates, but in such cases, time estimates should also be included. Any guarantees as to total cost should be given and will be considered in the evaluation of the proposal. While cost will be a factor in the evaluation of the proposal, it will not necessarily be the decisive factor.
   
   Please note that as a policy, the SOA Research Institute generally does not provide funding to cover academic institution overhead expenses.
6. A schedule for completion of the research, identifying key dates or time frames for research completion and report submissions. The SOA Research Institute is interested in completing this project in a timely manner. Suggestions in the proposal for ensuring timely delivery, such as fee adjustments, are encouraged.
7. Other related factors that give evidence of a proposer's capabilities to perform in a superior fashion should be detailed.
8. Proposals must be no more than five pages in length exclusive of references and researcher bios.

Selection Process

The SOA Research Institute will appoint a Project Oversight Group (POG) to oversee the project. The POG is responsible for recommending the proposal to be funded. Input from other knowledgeable individuals also may be sought, but the Aging and Retirement strategic research program steering committee will make the final recommendation, subject to SOA Research Institute leadership approval. An SOA staff research actuary will provide staff actuarial support.

Questions

Any questions regarding this RFP should be directed to Research-AR@soa.org.

Notification of Intent to Submit Proposal

If you intend to submit a proposal, please email brief written notification by October 9, 2026, to Research-AR@soa.org.

Submission of Proposal

Please email your proposal to Research-AR@soa.org; proposals must be received no later than October 16, 2026. It is anticipated that all proposers will be informed of the status of their proposal by the end of December 2026.

Conditions

The selection of a proposal is conditioned upon and not considered final until a Letter of Agreement is executed by both the Society of Actuaries Research Institute and the researcher.

The Society of Actuaries Research Institute reserves the right to not award a contract for this research. Reasons for not awarding a contract could include, but are not limited to, a lack of acceptable proposals or a finding that insufficient funds are available. The Society of Actuaries Research Institute also reserves the right to redirect the project as is deemed advisable.

The Society of Actuaries Research Institute plans to hold the copyright to the research and to publish the results with appropriate credit given to the researcher(s).

The Society of Actuaries Research Institute may choose to seek public exposure or media attention for the research. By submitting a proposal, you agree to cooperate with the [Society of Actuaries/sponsoring entity] in publicizing or promoting the research and responding to media requests.

The Society of Actuaries may also choose to market and promote the research to members, candidates and other interested parties. You agree to perform promotional communication requested by the Society of Actuaries Research Institute, which may include, but is not limited to, leading a webcast on the research, presenting the research at an SOA meeting, and/or writing an article on the research for an SOA newsletter.

Conflict of Interest

You agree to disclose any of your material business, financial and organizational interests and affiliations which are or may be construed to be reasonably related to the interest, activities and programs of the Society of Actuaries Research Institute.