Since the time this article was originally published, the amount of benefits being paid by Long-Term Care Insurance has increased dramatically. In 2019 the top insurance companies paid over $11 billion in benefits to American families. These tax-free benefits paid for care either in a policyholder's home, adult day care centers, assisted living facilities, memory care facilities, and nursing homes.
The cost of long-term care services has also increased since 2017. The LTC NEWS cost of care calculator will show you both the current and future cost of care services where you live. Click here to use the calculator.
Here is the remaining information from the 2017 article:
Some critics of Long-Term Care Insurance say the policies don’t payout, but the facts show otherwise. In 2017 over $9.2 Billion in long-term care benefits were paid to American families by the major insurance companies. Now, according to an analysis of claims conducted by the American Association for Long-Term Care Insurance (AALTCI), a single Long-Term Care Insurance policyholder claim has exceeded two million dollars.
“One insurance company has paid out $2.6 million to an individual who has been on claim for over 20 years,” shares Jesse Slome, director of the AALTCI, a national consumer education and advocacy group. The Association just released their findings of 2017 claimant data. Part of the study looked at the largest claims that were still being paid as of December 31, 2017.
“The last time we gathered information for the largest open claims was 2012,” Slome noted. “At that time, the industry’s largest open claim totaled $1.8 million.”
According to the AALTCI report, the female claimant purchased the policy some 13 years and nine months before the commencement of receiving benefits.
“The initial premium paid was $2,600-per-year, so around $36,000 in total cost has secured her and her family an enormous benefit,” Slome adds. “People mistakenly worry that they’ll buy long-term care insurance and never receive benefits,” Slome admits. “Despite getting over $2 million in benefits for their purchase, I doubt anyone would want to trade places with someone needing care for over 20 years.”
LTC Insurance Pays Huge Benefits
The AALTCI study shows the largest male claimant has been paid nearly $1.6 million by a different insurer reporting data. Slome said the claim had been paid for almost ten years (9 years, 10 months). The policyholder purchased the policy six years and six months before starting to receive benefits.
Slome says consumers should be aware of the facts regarding the actual benefits of Long-Term Care Insurance.
“Unfortunately, Long-Term Care Insurance is often thought of in terms associated with investment vehicles resulting in consumers who worry they may buy something they won’t ever need or use,” Slome admits.
Longevity Means Higher Risk of Needing Extended Care
The facts suggest as America ages, people will need help with either activity of daily living or will need supervision due to cognitive issues. The financial costs and burdens of aging impact not only savings and income but place tremendous pressure and burden on family members. Those who planned with Long-Term Care Insurance are receiving benefits making the aging process easier on their loved ones.
"I process claims regularly. Often, the first person I speak with is the adult daughter or daughter-in-law of a policyholder. They are always grateful their loved one has a policy in place. Yes, they are happy about preserving assets. However, what they always tell me is the policy allows them the time to be family. This is the thing that is often forgotten in the planning process. Most people want the family to be family. An affordable Long-Term Care Insurance policy will not only safeguard retirement funds, but it gives the family the time to be family. Your family won't be forced to either be a caregiver or manage paid care services for you," said Matt McCann, one of the country's leading specialists in Long-Term Care Insurance.
McCann says caregiving is very hard on family members. He says they have their own careers, family, and responsibilities. Paid care drains savings and impacts income and lifestyle. Long-Term Care Insurance makes getting older easier for everyone.
“Some people think Long-Term Care Insurance is expensive. The fact is these policies are very affordable, especially if purchased before retirement and designed by a real Long-Term Care Insurance specialist who understands these policies and how they get used,” McCann said.
Purchase LTC Insurance Before Retirement
Experts suggest planning for long-term care should be part of the overall retirement planning process before a person retires. Most states have several options for consumers to consider. There are traditional plans which include shared spousal benefits, inflation options, and in 45 states, additional asset protection with state partnership benefits. Asset-based plans, which are either life insurance or annuities with riders of long-term care coverage, provide a death benefit. Shorter duration plans which expanded underwriting criteria are also available. These plans make affordable options available to those who are older or have some health issues.
A Long-Term Care specialist can help you determine the suitability and identify the appropriate plan. Policy design is based on your specific situation, including your age, health, and amount of assets you are protecting. Find a trusted and experienced specialist by clicking here.
Start by identifying the cost of long-term care in your state and the availability of tax incentives and partnership plans. Click here and find the resources you need, including the LTC NEWS cost of care calculator.
About the Author
An LTC News author focusing on long-term care and aging.
Contributor since August 21st, 2017