Long Term Care Claims Really Last

LTC Policy

Shorter-term long-ierm care insurance policies provide significant savings; do they provide adequate protection?

A national study reveals important information regarding the claims usage of those who purchased long-term care insurance protection. The findings, reported by the American Association for Long-Term Care Insurance, will help consumers make more educated decisions regarding how much insurance protection may be right for their particular needs.

"Too costly is the number one reason many people give for not buying long-term care insurance protection," explains Jesse Slome, executive director of the Association. "How much you pay for coverage depends to a large degree on how much protection you get. An individual can reduce the yearly cost of protection by 35-to-40 percent by purchasing a three-year benefit versus an unlimited benefit (also referred to as lifetime). But, is that enough protection?"

The comprehensive survey conducted by Milliman, the leading independent national long-term care insurance actuarial and product development firm, examined claims data from some 1.6-million in-force policies. Only 14.4 percent of closed long-term care insurance claims lasted longer than 24 months (some 33.2 percent of open claims last longer than 24 months). The study revealed that only 5.6 percent of closed claims lasted longer than 36 months (16.2% for open claims).

"This is the most comprehensive look at recent long-term care insurance claims data," notes Slome. "The goal was to better understand what percentage of long-term care insurance claimants with shorter duration policies actually use-up or exhaust their policy benefits." The study concluded that for a three-year benefit period, only eight in 100 claimants exhausted their policy.

"There are indeed catastrophic situations where individuals need long-term care for many years," states Slome. "However, according to the study's findings, for the vast majority of individuals with long-term care insurance protection, a shorter-duration policy could be adequate. This is an especially important message for those individuals who find unlimited protection is too expensive. Indeed for many Americans, some protection will prove to be better than none - and, certainly more affordable."

Individual copies of the LTC Claims Study can be purchased from the American Association for $20. Mail a payment to AALTCI - Claims Study, 3835 E. Thousand Oaks Blvd., Ste 336, Westlake Village, CA 91362. For more information on long-term care insurance or a directory of local long-term care insurance professionals, visit the Association's Website www.aaltci.org.