Long-term care insurance like ElderShield works by pooling together premiums paid by insureds in their younger years while most are still working. These funds are collected and invested, so that they are available in future years, when insureds are no longer paying premiums and are more likely to suffer from severe disability.

The premiums collected under ElderShield currently exceed the claims paid out because the age profile of ElderShield insureds is relatively young, with a median age of 52. The premiums collected are not surpluses. They are meant to support future claims, when ElderShield insureds become older and more of them become severely disabled and start to make claims.