Claims data released by the Connecticut Partnership for Long-Term Care shows that on average it takes 161 months, or 13.4 years, from the time a consumer purchases a Long-Term Care Insurance policy until they become eligible for benefits. The October 2019 quarterly report issued by the state also shows more women qualifying for benefits.
According to the report, the average age of a person qualifying for benefits is 79 with the age range being from age 31 to age 99. Confirming other research, more women qualify for benefits than men with 59% of those who become eligible being women, compared to 41% men.
“Connecticut was one of the four original Partnership states and to the best of my knowledge is still the only one that regularly gathers and publishes relevant data,” according to Jesse Slome who is the director of the American Association for Long-Term Care Insurance a national consumer education and advocacy group.
Benefits at Home
The majority of policyholders are using their benefits to stay at home. According to the report 67% of those on claim were receiving benefits for home related care including home health aides, homemaker services, attendant care, adult daycare, and durable medical equipment.
30% of claims provided benefits for a person in assisted living facilities. Only 15% of claims paid for care in a nursing home.
45 states Offer Partnership Long-Term Care Insurance Policies
Today 45 states offer partnership policies that provide dollar-for-dollar asset protection. Four states originated the program, New York, California, Indiana, and Connecticut. Once President George W. Bush signed the Deficit Reduction Act of 2005 it allowed the remaining states to offer these special insurance policies. If you exhaust benefits from a Partnership Long-Term Care Insurance policy you can legally shelter part of your estate based on the total amount of benefits paid out by the policy and still qualify for Medicaid’s long-term care benefit. Normally, you must exhaust a majority of assets in order to qualify for the program. You can learn more about the partnership program by clicking here.
“Perhaps the most interesting piece of information was the finding that the average time between the purchase of a Long-Term Care Insurance policy and the eligibility for claim is 161 months (13.4 years),” Slome explained. “While Connecticut is a small state, I suspect this data will be almost identical for the entire industry because it represents an aged block of business.”
Most People Today Are in Their 50s When They Purchase Long-Term Care Insurance
Today the majority of consumers who purchase Long-Term Care Insurance are in their 50s, not their 60s. While younger people require extended care, the risk increases as a person grows older. It would be expected the time period from policy inception to claim will increase in the decades ahead.
People require long-term care due to an illness, an accident, or the impact of aging. Health insurance, including Medicareand Medicaresupplements, will not pay for most long-term care services. This means without a Long-Term Care policy the cost of care services will come out of savings and income. Often, family members, usually a daughter or daughter-in-law, also will be forced to provide care.
LTC Policies are Paying Billions in Benefits to American Families
In 2018, the major insurance companies paid $10.3 Billion in benefits to American families from Long-Term Care Insurance policies. These benefits help many people remain in their own homes and avoid the stress otherwise placed on their families. Plus, it reduces the financial stress and change in lifestyle. Partnership policies safeguard assets so no matter what happens a family’s assets will not be drained completely.
In addition to traditional and partnership policies, there are other ways for American families to plan for the financial costs and burdens that come with longevity. These include asset-based or “hybrid” policies. A hybrid policy is either a life insurance policy or an annuity with a qualified rider for long-term care. Generally, these are single premium products but some can be paid annually. They offer either a death benefit or a long-term care benefit. Short duration plans are also available in many states which are helpful for those who may be older and otherwise ineligible for other types of plans because of their age or health.
Start Research Into Long-Term Care Planning Before You Retire
Most experts suggest planning in your 40s or 50s as part of your retirement planning in order to take advantage of much lower premiums and eligibility for good health discounts. Start your research by finding the current and future cost of long-term care services in your area. Find your area on the LTC News Map and use the cost of care calculator to see determine how the costs will impact your finances – click here.
Premiums for Long-Term Care Insurance can vary over 100% for the same coverage. With various types of policies available be sure to get help in planning to protect your savings and income from the costs and related burdens that come with getting older. Be sure to seek the help of a qualified specialist. You can find a specialist by clicking here.