The 2020 claims data has been released showing Long-Term Care Insurance is helping American families address the financial costs and burdens of aging. The 2019 information shows the major insurance companies paying over $11.6 Billion in benefits from Long-Term Care Insurance policies.
American families received over $10 billion in Long-Term Care Insurance benefits in 2018, the biggest year on record according to a claims study report. The American Association for Long-Term Care Insurance (AALTCI), national consumer education and advocacy group, reports yearly on total claim activity by the nation’s leading insurance companies offering traditional Long-Term Care Insurance products.
“The industry passed the $10 billion mark for the first time.”
Jesse Slome, director of the AALTCI
The association said, in 2017, total claims amounted to $9.2 Billion were paid in Long-Term Care Insurance benefits to American families. A record of $10.3 Billion in claims were paid in 2018, which is $1.1 billion more than the previous year. This reflects an extra $3 million a day in claim benefits.
Long-Term Care Insurance Pays Benefits in All Settings
Long-Term Care Insurance pays benefits to help people pay for the costs of extended care due to illness, accidents, or the impact of aging. While most people think of this type of insurance as being for “nursing homes,” most benefits are paid for home care. Generally, policies pay benefits as well for adult daycare, assisted living, memory care as well as the traditional nursing home.
This product has become very important as more Americans are living longer. With longevity comes a much more significant risk of needing help with activities-of-daily-living or supervision due to cognitive decline. Normal health insurance and for those 65 and older, Medicare, including supplements, pay primarily for skilled services for a minimal time.
This means without Long-Term Care Insurance American families are forced to either pay for care out of savings or have family members become caregivers. Sometimes both.
“The total value of benefits paid is undoubtedly larger because today there are thousands of individuals who own linked benefit life insurance or annuity policies that can also provide LTC benefits.”Jesse Slome
Many Options Available for Long-Term Care Planning
In many states, there are three types of policies that can pay for extended care needs. Traditional plans include “partnership certified” policies that provide additional dollar-for-dollar asset protection, asset-based plans, or “hybrid” policies. These are linked life insurance or annuities, which provide long-term care benefits. Plus, limited duration or “short-term” plans can pay one or sometimes two years of care.
Look for your state and see which types of Long-Term Care Insurance plans are available by clicking here.
“Long-Term Care Insurance provides more than just the cash to pay for care.”
“It’s as much about having control and choices when care is needed while protecting your retirement plans and your family’s lifestyle. With more Americans living longer lives, it is increasingly important that people plan for the very real risk. You must, however, start when you are still able to health qualify for Long-Term Care Insurance coverage.”Jesse Slome
Affordable LTC Insurance Key to Protecting Retirement Funds
Long-Term Care Insurance has become a crucial part of many American’s retirement plans. Today’s policies, unlike the older legacy policies sold decades ago before rate stabilization rules, are both very affordable and rate stable. Policies are custom designed. Premiums are based on the number of benefits requested, your age at application, and health.
The AALTCI 2019 Long-Term Care Insurance Price Index shows prices for coverage have increased slightly for new coverage overall compared to the prior year.
“In general costs increased slightly compared to our 2018 analysis, but for many insurers, there was no increase compared to the prior year.”Jesse Slome
Long-Term Care Insurance and Rate Stability
In addition, today's plans are much more rate stable. A survey conducted by the AALTCI recently said that most actuaries see "little or no the risk" of needing future rate increases. Many states have adopted rate stability rules, which make it very difficult to raise future premiums on today's Long-Term Care Insurance. Hybrid policies are guaranteed never to have rate increases. All policies are now priced based on the extremely low-interest-rate environment.
Click here to see if your state adopted rate stability.
Since the risk of needing care is so high due to longevity and the advances in medical science, protecting your future retirement funds from the high costs of long-term health care is an essential part of retirement planning.
LTC NEWS Tools Help in Research
Start your online research, ideally before retirement, by finding the current and future cost of care services in your area. You will also see the availability of partnership plans and available tax incentives.
Find your location on the LTC NEWS cost of care calculator by clicking here.
Always use the help of a qualified Long-Term Care Insurance specialist. They will help you find the best coverage at the best value by reviewing your age, health, family history, and other factors. They understand the underwriting criteria of each insurance company, claims, policy design, and features and benefits of every policy available. This will help you make the right choice. Remember, premiums can vary well over 100% between companies for the same coverage.
Long-Term Care Insurance will reduce the stress and burden otherwise placed on loved ones in addition to protecting assets. Be sure to plan before you retire to enjoy the most affordable options.
About the Author
An LTC News author focusing on long-term care and aging.
Contributor since August 21st, 2017
Planning for the financial costs and burdens of aging is really all about family. If you have children, you probably don't want to place the full responsibility and burden of caregiving on them. Being a caregiver is very difficult and can adversely impact their own families, careers, and their own health.
If they don't live nearby, this makes it even more difficult. If you don't have children, a Long-Term Care policy can ensure you have access to quality care either at home or in a quality facility. They can become your advocate as well.
Many Long-Term Care Insurance policies offer spousal discounts and shared benefits. This provides additional savings and flexibility that should be discussed with your Long-Term Care Insurance specialist.
Partnership Provides Powerful Asset Protection
Currently, 45 states offer special Partnership Long-Term Care Insurance policies which provide you with additional dollar-for-dollar asset protection. In the event, you were to exhaust all the benefits from your policy you would be able to shelter part of your estate based on the total amount of benefits paid by your policy and still qualify for Medicaid without being impoverished. While the chance of spending through all your benefits … it gives you additional peace-of-mind. See if your state is eligible.
Long-Term Care Insurance is affordable. Remember, it is custom designed. Be ready to answer any questions. Once you have a policy in place, you and your family will enjoy peace-of-mind knowing you will have access to your choice of quality care in the setting you desire all without placing the full responsibility on your family.
You will protect your lifestyle and legacy. It is really very easy as long as you take the first step when you still have choices.
As part of your research, review the LTC NEWS Long-Term Care Guide by clicking here.