For the first time ever, long term care insurance claims exceed $10 BILLION in one calendar year!
Scott A Olson, CLTC
I help consumers, financial planners and members of the media evaluate long-term care insurance options.
In 2014, long term care insurance claims were over $8.5 BILLION. 253,922 policyholders and their families were helped that year.
In 2015, long term care insurance claims topped $10 BILLION. 268,411 policyholders and their families were helped that year.
(Click here for data table. Refer to page seven, line C5 and C6, second column)
At the current pace of growth, long term care insurance claims are trending toward $11.8 BILLION for the 2016 calendar year. (The exact claims total for 2016 will be released in the second half of 2017.)
It took from 1974 to 1992 for long term care insurance claims to reach the cumulative total of $1 Billion.
Around 1996, long term care insurance claims surpassed $1 Billion in a calendar year for the first time.
Today, long term care insurance claims exceed $1 Billion every six weeks!
Nearly all long term care insurance claims are paid (contrary to what is often posted on the internet). The headline:
“Long Term Care Insurance Claims are Denied!”
gets A LOT more clicks than
“97.6% of Long Term Care Insurance Claims Are Paid!”
As part of a 28-month study funded by the U.S. Department of Health & Human Services, roughly 1,400 long term care insurance claimants were asked a series of questions. Almost all of those who filed a claim were either approved (89%) or awaiting a final decision (7%); only 4% had been denied.
When claims were denied, it was usually because the claimant did not meet the policy’s benefit eligibility criteria.
Because individuals were interviewed about every four months, they were able to learn whether those who were initially denied benefits ultimately received them over the course of the study.
The claims denial rate dropped from 4% to 2.4% after one year.
More and more people see the value of owning long term care insurance as a result of seeing their relatives’ claims being paid. They see first-hand the benefit the policy brings to their relative and decide they want long term care insurance, too. According to a recent study, “individuals with LTC insurance receive on average 35 percent more hours of care than those without a policy.” (AHIP: The Benefits of Long Term Care Insurance)
In most states, 13 different insurance companies are now actively selling new long term care insurance policies. Two highly-rated companies now offer policies with unlimited benefits (no lifetime cap). These companies also offer policies where you’re covered for life but the premiums stop after 10 years.
Scott A. Olson co-founded LTCShop.com to help consumers navigate the many choices available to plan for long-term care. Scott is an expert in all types of long-term care coverage including: traditional long-term care insurance, long-term care partnership policies, as well as “hybrid” policies that combine long-term care benefits with life insurance or annuities. Scott has specialized in long-term care insurance since 1995 and is licensed to sell long-term care insurance in 45 states. Over the past 20 years, he has helped thousands of consumers across the country plan for long-term care.
The demographic tsunami is on it's way
Principal Owner/Long Term Care Planning Specialist at McCann Insurance Services
8yIn over 18 years I have never had one major issue with a claim. Yet, you don't see many articles about that. Affordable Long Term Care insurance works exactly has advertised. That should be the headline we see. $10 billion in claims paid should be an indication of that. Maybe some people will wait till it hits $20 billion. Scott, you are running numbers, My guess is that won;t be too far down the road.
Managing Director at Magnolias of Walterboro SC
8yI help folks with claims on a weekly basis. I will concur: the companies do pay and are consistent. Rarely is there an issue with any claim, and when there is, it is usually remedied with an additional piece of information faxed. Anyone who has had a claim consistently says that, while seemingly expensive when paying the premiums, it was the smartest thing that they have done. I got into this business from the claims side: I saw how it worked.
Principal Owner Chinnery Enterprises
8ySo what is your opinion, based on these payouts, about potential increases in premiums or are these payouts consistent with the insurance company's estimates?