In a year that featured the COVID-19 virus crisis and economic and political uncertainty, the nation's top insurers paid American families almost $12 Billion in benefits from their Long-Term Care Insurance policies in 2020.
Data reported by the American Association for Long-Term Care Insurance (AALTCI) says the top insurers paid almost 32 million dollars a day, a total of $11.6 Billion in benefits. These benefits helped many American families keep their loved ones at home at a time many families wanted to keep loved ones from going into long-term care facilities.
"Every year, benefit payouts grow to individuals needing care and purchased Long-Term Care Insurance for that very real risk," reports Jesse Slome, AALTCI's director.
$31.78 Million a Day Paid by Top Companies in LTC Policy Benefits in 2020
"The $11.6 Billion paid in 2020 represents an increase of $600 million over the total 2019 claim benefits paid and a significant increase from the $8.65 billion paid out five years earlier in 2016," Slome explained.
These numbers only reflect traditional tax-qualified Long-Term Care Insurance and do not include the amounts paid by asset-based "hybrid" policies that link life insurance or annuities with long-term care. The total payout of benefits from all sources would be expected to increase the total amount of benefits paid for long-term health care significantly.
The total does include all types of long-term health care. Some people still think that Long-Term Care Insurance only pays for nursing home care. However, most long-term health care services are outside of nursing homes.
If you have a Long-Term Care Insurance policy and need to make a claim click here.
LTC Insurance Pays for All Types of Care – Including In-Home Care
The $11.6 Billion reflects in-home care, adult day care centers, assisted living facilities, memory care facilities, in addition to nursing homes. Most policies cover all these types of care, providing the policyholder the ability to choose the kind of care they wish to have when they qualify for benefits.
People require long-term care services due to changes in a person's health or as a result of an accident or injury that goes longer than 90 days. Illnesses, accidents, or the consequences of aging will cause a person to need help with daily living activities. In addition, more people than ever before are experiencing declines in cognitive ability. Longevity has increased the total number of people who have Alzheimer's or other forms of dementia. People who suffer from memory problems will often need supervision to keep them safe.
Changes in Health Increase with Age
Generally, people start noticing changes in their body and health as they get in their 40s and 50s. Older people often start experiencing cognitive decline as early as in their 60s or 70s, although some people have early-onset dementia.
The cost of long-term care services continues to rise due to several factors. Increased labor costs due to demographic changes and supply and demand places stress on the long-term care system.
The LTC NEWS Cost of Care Calculator already indicated that some care, depending on location, can run over $100,000 a year. While in-home care usually is less expensive, all sectors of care is increasing in cost every year.
The need for long-term health care services will continue to rise as the population continues to get older, and fewer younger people are available to fill the role of caregiver. Family caregivers have added pressure to an already physically and emotionally demanding role. These family caregivers usually will have to maintain other duties like their jobs and family responsibilities.
Long-term care facilities and home health agencies will have to spend more money to attract and maintain staffing levels to meet the higher demand created by aging and advances in medical science that increase longevity.
Consequences of Long-Term Care Adversely Impact Families
The U.S. Department of Health and Human Services reports that 48% of adults age 65 and older will need some paid long-term care service in their lifetime. However, the consequences of long-term care on American families are not just financial.
According to the latest data, about 41 million unpaid family caregivers provided about 34 billion hours of care — worth over $470 Billion. The economic impact on these family caregivers creates stress and burden as the caregivers must reduce hours at work or leave the workplace altogether. Don't forget the physical and emotional demands placed on the caregiver as well.
Long-Term Care Insurance offers guaranteed tax-free benefits that pay for the policyholder's choice of care, including in-home care. These benefits are allowing less dependence on family members giving them the time to be family. Plus, the substantial amount of asset protection safeguards income and assets reducing the financial impact on lifestyle and legacy.
Save Money and Plan Prior to Retirement
Many experts suggest LTC Insurance as an essential part of retirement planning. However, since these policies are medically underwritten and priced, in part, by your age when you obtain coverage, it is recommended to get coverage in your 40s or 50s.
The AALTCI suggests seeking the assistance of a qualified Long-Term Care Insurance specialist who works with the top insurance companies that offer these products. Few financial advisors and general insurance agents have experience in this area.
You can find a trusted and experienced Long-Term Care Insurance specialist by clicking here.
About the Author
Linda is a former journalist who now enjoys writing about topics she is interested in so she “can keep her mind active and engaged”.
Contributor since December 11th, 2017
You face many challenges when planning for your future, successful retirement. There are financial challenges, for sure. However, you probably don’t want to lose your independence. Avoiding dependency is critical for most people.
The fact is long-term health care is a significant cash flow issue. LTC Insurance addresses this problem. But long-term care is also a family issue. Without any plan in place, the family will go into crisis mode. The result can be a disaster for you and your family, and your wishes may take a back seat.
An LTC policy keeps you in control and helps avoid becoming dependent on your children decades from now. You will have access to guaranteed tax-free benefits that will pay for your choice of quality care, either in-home or in a facility.
Safeguard Assets and Ease Family Stress
You can safeguard your 401K, IRA, and other assets and maintain your lifestyle once you retire. However, Long-Term Care Insurance is medically underwritten, so you must have reasonably good health to obtain coverage. Plus, premiums are calculated on your age, health, family history, and other factors.
Most people want to avoid the lifestyle changes that happen when you have large health-related costs. Most of these costs are long-term care services.
Plus, most people want to avoid placing the future responsibility of caregiving or managing future paid care services on their adult children. The role of the family caregiver is physically and emotionally demanding.
Affordable Long-Term Care Insurance will give help you avoid dependence on your family in addition to protecting your income and assets. You will have access to your choice of quality care, including in-home care, which most people prefer.
Research Tools on LTC NEWS
LTC NEWS offers many resources to learn about the available options and learn about long-term health care issues. Click here and discover these resources.
This comprehensive guide is an outstanding first-read - The Ultimate Long-Term Care Guide. Be sure to take notes so you can ask the appropriate questions when you speak with a qualified and trusted Long-Term Care Insurance specialist.
This conversation is one you should have with a specialist as most financial advisors, or insurance agents lack the knowledge required in underwriting, policy design, tax implications, and claims. Find a specialist who works with the major companies by clicking here.
Discussion Points with a Specialist
When you speak with a specialist, be sure they discuss with you the following:
- Partnership – Most states offer special policies that provide dollar-for-dollar asset protection. The Long-Term Care Insurance Partnership Program might be one of the best-kept secrets in retirement planning. Make sure the specialist explains this program and how it might help you.
- Tax incentives – There are federal tax incentives available for some people. If you own your own business, be sure to ask.
- Health Savings Accounts – If you have an HSA, you can use the pre-tax money in your account to pay for the premium.
- Asset-Based or Hybrid policies – These are life insurance or annuities with a rider for long-term care. Careful, only a handful are actually a long-term care benefit. However, one of these policies can provide you with the flexibility of both a long-term care benefit or a death benefit. They are expensive but can be paid with a single premium.
- Health and Family History - Make sure the specialist asks you detailed questions about your health, family history, and retirement plans. Underwriting criteria vary with each insurance company. If they are not asking you detailed questions, then find another specialist.
LTC NEWS Cost of Care Calculator
Take a moment and find the current and future costs of long-term care where you live. This information helps you see the financial impact of long-term care on your savings and helps you decide the amount of coverage appropriate for you in your situation.
Find your state and use the LTC NEWS cost of care calculator by clicking here.
Be Published on LTC NEWS
LTC NEWS offers many resources to help families address the consequences of long-term care, aging, health, caregiving, and other retirement issues. You can be part of the effort to help educate consumers throughout the U.S. and around the world.
Write a story for publication on LTC NEWS and let America hear what you have to say. Be sure your article fits the LTC NEWS target audience of adults 40-70.
Topics can include stories on:
- Long-Term Care
- Retirement Planning
There are numerous other related topics, as well. You can even promote yourself, your business, and your website or blog. It must have editorial content exclusive for LTC NEWS and cannot be just an advertisement. It can include links to other sites, and you can share the article link once published on your website or social media.
Marketing and Advertising on LTC NEWS
Readers of LTC NEWS are researching retirement issues, including aging, health, caregiving, and long-term care. Other readers seek information for a parent or other loved one who is experiencing declining health or aging issues and require extended care.
There are many marketing opportunities available, including sponsored content articles. Sponsored content offers you a long-form way to sell yourself, your company, and your ideas.
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