InsuranceNewsNet July 12, 2018
Most initial long-term care claims come from
clients in their 80s and 90s, who live at home, a new survey finds.
Long-term care
insurance (LTCi) claims are not filed as early as conventional wisdom would
seem, new research indicates.
That may come as a
surprise to people who don’t realize that LTCi claims tend to start when
claimants are in the 80s and 90s, said Jesse Slome, executive director of the
American Association for Long-Term Care Insurance.
Agents sometimes
tell policyholders they might need to rely on their LTCi policies before age
80, he added, but that’s generally not the case.
“So first it’s
important for agents to understand the numbers,” Slome said.
What
the Numbers Show
Here are the key
data points from the survey:
·
72.5 percent of new claims were filed by people age 80 or older,
with almost half of those filed by people 90 or older.
·
20.5 percent of new claims were opened by policyholders between
the ages of 70 and 79.
·
5.5 percent of new claims were started by policyholders between
the ages of 60 and 69.
·
1 percent of new claims were initiated by policyholders between
the ages of 50 and 59.
The percentages
have remained stable for the past four or five years, Slome said.
Since insurers
typically stop underwiring LTCi coverage when people reach their mid-70s, it’s
important for agents with clients in the market for LTCi to buy a policy while
clients are still in their 60s, Slome said.
LTCi policy
premiums need time to grow so that when the time finally comes to go on claim
the benefits are covered, he said.
About 295,000
individuals were on LTCi claims last year, an increase of 5.3 percent or 15,000
people from 2016.
Claims
Begin at Home
The idea that most
LTCi claims begin in the nursing home setting is a myth.
The majority of new
LTCi claims – 52.1 percent – originate from the policyholder's home. Another
28.2 percent of new claims start in nursing homes and 19.7 percent begin when
the claimant lives in assisted living, the association reported.
For people with
LTCi coverage who live into their 80s and 90s – as more people are doing due to
longevity – chances are they will be filing an LTCi claim, and that those
claims will be filed while the policyholder lives at home.
Women accounted for
68 percent of newly opened LTCi claims last year, the association found.
Among female
policyholders:
·
34 percent of claims started while the claimant was living at
home.
·
19 percent originated from a nursing home.
·
8.5 percent originated from assisted living.
Long-term care
insurers last year paid out $9.2 billion in claims, and that number is expected
to rise every year as the cost of long-term care also rises.
Over the next
decade, LTCi policies are expected to pay out about $100 billion in claims,
Slome said.
InsuranceNewsNet
Senior Writer Cyril Tuohy has covered the financial services industry for more
than 15 years. Cyril may be reached at cyril.tuohy@innfeedback.com.
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