U.S. insurers paid $13.25 billion in claims for holders of standalone long-term care insurance policies in 2022, up 7.7% from the total for 2021, according to the American Association for Long-Term Care.
The number of claimants increased 2.7%, to 345,000, and the average amount of benefits per claimant increased 4.9%, to about $38,400.
That compares with a 2.6% increase in the average amount of benefits per claimant in 2021.
What It Means
Standalone long-term care insurance may be out of favor with insurers, but a significant number of your older clients may have it, and advisors need to be prepared to answer questions from clients who are using their coverage to pay long-term care bills.
The Backdrop
The oldest baby boomers are turning 77 this year.
The United States spent about $188 billion, or 0.8% of gross domestic product, on nursing home care in 2022, according to the Centers for Medicare and Medicaid Services, and families paid about $44 billion of the nursing home bills out of their own pockets.
Private long-term care insurance was once a hot market, but growth slowed around 2000, when insurers started to realize that claims would be much higher than expected.
Today, only about 6.3 million people have their own private standalone LTCI coverage, according to the National Association of Insurance Commissioners.
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