Insurers paid out $13.25 Billion in long term care insurance claims during 2022 according to a new report released this week by the American Association for Long-Term Care Insurance (AALTCI).
“Consumers need to understand that long-term care insurance companies have paid benefits to millions of Americans over the past decades,” says Jesse Slome, AALTCI’s director. “In fact, each year, insurers pay more in claim benefits to more beneficiaries than the prior year.”
According to Slome, some $12.3 Billion in claim benefits was paid out in 2021. “The over $1 Billion increase was not a surprise nor due to Covid,” Slome notes. “Insurers expect claims to occur as the pool of policyholders age and, as a result of aging, start to require care.”
The Association annually reports data for long-term care insurance claims for individuals owning traditional long-term care insurance. “The vast majority of claims are being paid to those who purchased health-based or traditional LTCi policies,” Slome explains. “While more linked-benefit policies are being sold today, the value of long-term care related claims being paid to these individuals is likely to still be nominal.”
The long-term care insurance expert urged insurance agents to share the 2022 claims information with their current policyholders. “This is especially important today because so many are receiving policy rate increases,” Slome says. “A rate increase is upsetting especially if you don’t understand that insurers are paying out billions in claim benefits to policyholders who found themselves needing care.”
The Association reports that claims were paid to around 345,000 policyholders in 2022.
“That’s 20,000 more claimants than the number paid during 2020,” Slome notes. “Over the years, well over a million individuals have gone on claim and benefited from owning long-term care insurance. Certainly, there is the financial aspect. But often overlooked is the benefit to families and loved ones who also benefit from the fact that they had this protection in place.”
The American Association for Long-Term Care Insurance advocates for the importance of long-term care planning. The organization connects consumers with knowledgeable professionals who are independent advisors. These specialists can provide information along with long-term care insurance costs quotes and policy comparisons of both traditional and linked benefit long-term care insurance options.