A growing need for long-term care insurance

A record $10.3 billion in claims was paid last year by the nation's long-term care insurance companies, according to the American Association for Long-Term Care Insurance study. This figure represents the highest amount of such benefit payments to Americans for a one-year period ever, and they were paid to more than 300,000 individuals.
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Of the total, 34% of the insurance benefit payments made by eight of the nation's largest insurers covered home care expenses. Also, 30% of benefits paid were for assisted living costs, and the remainder, 36% was allocated toward nursing home care. 

The largest claims paid by leading insurers in 2018 ranged from well over $350,000 to one of more than $875,000 - the highest single claim paid to date.

The data also revealed that approximately eight million Americans now own long-term care insurance obtained individually or through their employer. The researchers concluded that the increasing amount of benefits paid to policyholders is proof of the growing need for coverage.

Selecting the right long term care insurance

To encourage more consumers to buy long-term care insurance, The National Association of Insurance Commissioners has developed the following consumer guidelines to help you select the right policy:
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• The policy should cover at least one year of nursing home or home health care, including intermediate and custodial care. Nursing home or home health care benefits should not be limited to skilled care.
• The policy should provide coverage for Alzheimer’s disease if the policyholder develops it after purchasing the policy.
• Inflation protection is important. The policy should offer a choice of:
  • Automatically increasing the initial benefit level on an annual basis.
  • A guaranteed right to increase benefit levels periodically without providing evidence of insurability.
• There should be a coverage summary that describes the benefits, limitations, and exclusions, and also allows you to compare it with others.
• There should be a guarantee that the policy cannot be canceled, non-renewed or otherwise terminated because you get older or suffer deterioration in physical or mental health.
• The insurer should permit you to return the policy within 30 days of purchasing to receive a full premium refund.
• No requirements should exist that policyholders:
  • First be hospitalized to receive benefits
  • First receive skilled nursing home care before receiving intermediate or custodial nursing home care.
  • First receive nursing home care before receiving benefits for home health care.