Advisors hoping to illustrate the benefits and, at the same time, understand the significant generational costs associated with LTCI, may be interested in a new study released by the American Association for Long-Term Care Insurance.

According to the organization, the largest open LTCI claim recently surpassed $1.2 million in benefits, providing coverage to a claimant who is not even of retirement age. The female claimant, who purchased coverage at age 43 and paid an annual premium of $1,800, began her claim three years later and has been under full coverage for nearly 12 years since.

“As a result of increased longevity and medical advances, the need for long term care is a new phenomenon for a generation of Americans,” says Jesse Slome, AALTCI’s executive director. “LTCI 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.”

Association data suggests that 180,000 Americans received benefits from their LTCI policies last year and more than $8.5 billion in claims was paid. As well, almost 10 percent of new individual claims initiated during 2008 were launched for claimants under the age of 70, with about 30 percent launched between ages 70 and 79 and 60 percent for those older than 80.

“While most LTCI claims begin at older ages, accidents and illnesses are a common reason younger people need this care,” Slome added. “The number of new cases is expected to increase to 450,000 a year by 2010 and 615,000 new cases a year by 2030. It’s time for individuals to start planning for care should they need it in the future.”