Nearly $12 Billion in Long-Term Care Insurance Benefits Paid in 2020
In a year that featured the COVID-19 virus crisis and economic and political uncertainty, the nation's top insurers paid American families almost $12 Billion in benefits from their Long-Term Care Insurance policies in 2020.
Data reported by the American Association for Long-Term Care Insurance (AALTCI) says the top insurers paid almost 32 million dollars a day, a total of $11.6 Billion in benefits. These benefits helped many American families keep their loved ones at home at a time many families wanted to keep loved ones from going into long-term care facilities.
"Every year, benefit payouts grow to individuals needing care and purchased Long-Term Care Insurance for that very real risk," reports Jesse Slome, AALTCI's director.
$31.78 Million a Day Paid by Top Companies in LTC Policy Benefits in 2020
"The $11.6 Billion paid in 2020 represents an increase of $600 million over the total 2019 claim benefits paid and a significant increase from the $8.65 billion paid out five years earlier in 2016," Slome explained.
These numbers only reflect traditional tax-qualified Long-Term Care Insurance and do not include the amounts paid by asset-based "hybrid" policies that link life insurance or annuities with long-term care. The total payout of benefits from all sources would be expected to increase the total amount of benefits paid for long-term health care significantly.
The total does include all types of long-term health care. Some people still think that Long-Term Care Insurance only pays for nursing home care. However, most long-term health care services are outside of nursing homes.
If you have a Long-Term Care Insurance policy and need to make a claim click here.
LTC Insurance Pays for All Types of Care – Including In-Home Care
The $11.6 Billion reflects in-home care, adult day care centers, assisted living facilities, memory care facilities, in addition to nursing homes. Most policies cover all these types of care, providing the policyholder the ability to choose the kind of care they wish to have when they qualify for benefits.
People require long-term care services due to changes in a person's health or as a result of an accident or injury that goes longer than 90 days. Illnesses, accidents, or the consequences of aging will cause a person to need help with daily living activities. In addition, more people than ever before are experiencing declines in cognitive ability. Longevity has increased the total number of people who have Alzheimer's or other forms of dementia. People who suffer from memory problems will often need supervision to keep them safe.
Changes in Health Increase with Age
Generally, people start noticing changes in their body and health as they get in their 40s and 50s. Older people often start experiencing cognitive decline as early as in their 60s or 70s, although some people have early-onset dementia.
The cost of long-term care services continues to rise due to several factors. Increased labor costs due to demographic changes and supply and demand places stress on the long-term care system.
The LTC NEWS Cost of Care Calculator already indicated that some care, depending on location, can run over $100,000 a year. While in-home care usually is less expensive, all sectors of care is increasing in cost every year.
The need for long-term health care services will continue to rise as the population continues to get older, and fewer younger people are available to fill the role of caregiver. Family caregivers have added pressure to an already physically and emotionally demanding role. These family caregivers usually will have to maintain other duties like their jobs and family responsibilities.
Long-term care facilities and home health agencies will have to spend more money to attract and maintain staffing levels to meet the higher demand created by aging and advances in medical science that increase longevity.
Consequences of Long-Term Care Adversely Impact Families
The U.S. Department of Health and Human Services reports that 48% of adults age 65 and older will need some paid long-term care service in their lifetime. However, the consequences of long-term care on American families are not just financial.
According to the latest data, about 41 million unpaid family caregivers provided about 34 billion hours of care — worth over $470 Billion. The economic impact on these family caregivers creates stress and burden as the caregivers must reduce hours at work or leave the workplace altogether. Don't forget the physical and emotional demands placed on the caregiver as well.
Long-Term Care Insurance offers guaranteed tax-free benefits that pay for the policyholder's choice of care, including in-home care. These benefits are allowing less dependence on family members giving them the time to be family. Plus, the substantial amount of asset protection safeguards income and assets reducing the financial impact on lifestyle and legacy.
Save Money and Plan Prior to Retirement
Many experts suggest LTC Insurance as an essential part of retirement planning. However, since these policies are medically underwritten and priced, in part, by your age when you obtain coverage, it is recommended to get coverage in your 40s or 50s.
The AALTCI suggests seeking the assistance of a qualified Long-Term Care Insurance specialist who works with the top insurance companies that offer these products. Few financial advisors and general insurance agents have experience in this area.
You can find a trusted and experienced Long-Term Care Insurance specialist by clicking here.