Nearly one in 10 (8.9 percent) of new individual long-term care insurance claims initiated during 2008 were made prior to age 70, according to a study released Monday by the American Association for Long-Term Care Insurance (AALTCI).
The largest open long-term care insurance claim has surpassed $1.2 million in paid benefit, according to AALTCI. The claimant, a woman, purchased coverage at age 43, paying an annual premium of $1,800. Three years later her claim began and has continued for almost 12 years.
“As a result of increased longevity and medical advances, the need for long-term care is a new phenomenon for a generation of Americans,” said Jesse Slome, Executive Director of the industry trade group in a released statement. “The pervasive concern about purchasing long-term care insurance is will I ever use it?”
According to Association data 180,000 Americans received benefits from their long-term care insurance policy and some $8.5 billion in claims was paid in 2008. “This is a significant increase in benefits paid compared to the prior year,” Slome explains. “Long-term care insurance is not the lottery. This is not something you really want to win; but having protection in place can certainly pay off and for thousands of people it increasingly is.”
The organization collected data on claims including the largest open claims (still being paid as of December 31, 2008) paid by six of the nation’s leading insurers. The second largest claim is by a woman who purchased her long-term care insurance policy at age 72, paying an annual premium of $12,766. Three years later her claim began and has continued for almost nine years ($1.02 million in benefits has already been paid for her nursing home care).