Most LTCI claims begin and end at home; insurers pay out $8.65 billion in 2016 claims, new data confirms

The majority of long-term care insurance claims begin and end in the home, according to the latest data compiled by the American Association for Long-Term Care Insurance (AALTCI).

“Individuals continue to mistakenly think of long-term care insurance as nursing home insurance,” said Jesse Slome, director of the American Association for Long-Term Care Insurance, the national trade organization that regularly compiles data regarding new policy buyers as well as those who benefit from their insurance policies.

“I sometimes refer to LTC insurance as ‘nursing home avoidance insurance’ because often having this insurance protection in place allows the individual to be cared for in their own home,” Slome adds. The Association released information regarding where long-term care insurance claims began in 2016. According to AALTCI, some 280,000 Americans received benefits from their long-term care insurance policies in 2016.

The majority of new claims starting in 2016 (54%) began in the home according to AALTCI. That represents a small, 3% increase compared to the Association’s last industry study conducted in 2012.

The AALTCI study found that 14% of new claims began with the claimant in an assisted living community. Just under one-third (32%) of new claims began in a nursing home. In 2012, the Association found that 30.5% of new claims were started while the claimant was in a nursing home.

“Most long-term care insurance claims begin and end in the home,” Slome said. The AALTCI analysis of claims found that nearly 56% of claims also ended in the home. “People want to be in their home with family and loved ones and having some long-term care insurance in place can help pay for the cost of home care services,” Slome said.

LTCI industry paid $8.65 billion in 2016 claims

The nation’s long term care insurance companies paid $8.65 billion in claim benefits to those 280,000 individuals in 2016, according to additional AALTCI data released in February.

“The total of all benefits paid increased by over 6% and the number of long term care insurance policyholders on claim grew by roughly 20,000,” Slome said. In 2015, AALTCI reported total claims amounted to $8.15 billion paid to some 260,000 individuals.

“The number of individuals who are being paid benefits because they purchased a traditional long-term care insurance policy increased by nearly 8% (7.7%) percent,” Slome said. Without insurance to pay some or all of the cost, Slome noted the caregiving responsibility often falls on elderly spouses or adult children of aging parents.

“It’s more than just money that long-term care insurance provides,” Slome said. “It’s as much about having control and choices, while protecting your retirement plans and lifestyle. I like to tell consumers who are deciding if this is a prudent move, that having even some long-term care insurance in place allows loved ones to care about you rather than being forced to care for you.”

• See also: New LTCI rates for a 60-year-old couple increase between 6% and 9% in 2017

About AALTCI: The American Association for Long-Term Care Insurance is the national professional organization exclusively dedicated to promoting the importance of planning for long-term care needs.