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Home care dominates majority of long-term care insurance claims

Insurance Forums Staff

More than two-thirds (70%) of 2019 long-term care insurance policy claimants received initial benefit payments for care at home according to new data from the American Association for Long-Term Care Insurance (AALTCI).

The organization released findings in conjunction with November’s Long-Term Care Awareness Month.

“Consumers still mistakenly associate long-term care insurance primarily with skilled nursing home care,” says Jesse Slome, director of the organization. “Agents really should explain that this is nursing home avoidance protection. Funds to help cover costs associated with care services provided in your own home where you’d prefer to be.”

The just-concluded analysis of claims paid in 2019 found that 70% of new claims began with the policyholder receiving care at home. This represents an increase from 52% reported by the Association study of 2014 claims data. “The majority of LTC insurance claims began and also ended with the policyholder receiving care in their own home,” Slome notes.

According to the Association, in 2019 the nation’s long-term care insurance companies paid $11 billion in benefits to some 310,000 individuals. “While sales of traditional LTC insurance policies have declined in recent years, claims paid have increased 35% from $8.1 billion paid in 2015,” Slome notes.

In 2019, fewer than one in 10 new claims began with care provided in a nursing home according to the Association’s study. The balance, around 18% commenced with care in an assisted living setting. “Covid-19 has made individuals increasingly desirous of the ability to remain at home and more insurance professionals are focusing on the home care benefits available,” Slome says.

“For less than $100 a month, a 57-year-old male can currently purchase a policy that pays $5,100 monthly for home care services when he reaches age 85,” Slome adds. “If home care is then needed for two years, the policy would pay out over $122,000 in total benefits.”

Such a policy would also provide benefits should qualifying care be received in either an assisted living or skilled nursing home facility.

The American Association for Long-Term Care Insurance advocates for the importance of protecting against the real risk of needing long-term care and supports insurance professionals who market both traditional and linked-benefit LTC insurance solutions.



1 thought on “Home care dominates majority of long-term care insurance claims”

  1. In some ways, there is not enough detail provided by AALTCI to make this very useful.

    Information about things like age brackets of people receiving benefits, whether the at home end of LTC home benefit is due to death or recovery, and the mean, median and mode of the at home stays would help people thinking about this type of coverage.

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