American Association for Long-Term Care Insurance

A new study dispels the misperception that long term care insurance is purchased by and benefits only older individuals who need care as a result of conditions typically associated with aging.

According to a just-released American Association for Long-Term Care Insurance study, the youngest claimant was 24-years-old when he began receiving benefit payments from his long term care insurance policy.  The coverage was purchased at age 21 and the individual has been receiving payments for seven years.

“People often mistakenly associate long term care solely with nursing home care required by the elderly,” explains Jesse Slome, AALTCI’s director.  “After purchasing insurance coverage younger individuals have accidents and are diagnosed with health conditions that result in the need for care for months and often years.”

The Association reviewed data shared by leading long term care insurance companies.  The youngest female policyholder on claim obtained coverage at age 28.  “Within the same year, she needed care and qualified for benefit payments that have amounted to over $135,000,” Slome reports.  A number of insurers reported younger claimants in their 30s.  “A male who purchased insurance at age 36 began receiving policy benefits at age 40,” Slome notes.  “His claim has lasted over six and a half years and the insurer has already paid out over $700,000.”

The long term care insurance industry paid $6.6 billion in 2011 claim benefits to over 200,000 individuals according to the 2012 Long Term Care Insurance Sourcebook.  ”The number of younger individuals purchasing long term care insurance on an individual basis and through their employer is growing,” says Tim Kneeland, President, Transamerica Life Insurance Company, a leading Long Term Care insurer.  A policy that provides for $164,000 in immediate benefits with the option to increase overage in future years costs roughly $635 yearly for a 25 year old according to the Association’s 2012 Price Index.  For information visit the Long Term Care Insurance Association’s website at www.aaltci.org or call (818) 597-3227.

A Sample Look At Youngest Claimants (As of June 30, 2012)
Data must be sourced to the American Association for Long-Term Care Insurance (www.aaltci.org)

                                                               Male                                         Female

Company A
Policy Issue Age                           21                                             33
Claim Incurred                              24                                             36
Length of Claim                             6 years 7 months                  1 year 5 months
Amount Paid to Date                      $344,500                                   $107,500

 

Company B
Policy Issue Age                           36                                             28
Claim Incurred                              40                                           28
Length of Claim                             6.8 years                               2.6 years
Amount Paid to Date                   $703,200                             $136,700

Company C
Policy Issue Age                           38                                             42
Claim Incurred                              38                                             46
Amount Paid to Date                 $575,700                                   $730,200

Company D
Policy Issue Age                           31                                             39
Claim Incurred                              36                                             43
Amount Paid to Date                  $92,500                              $185,000

Sampling of data for youngest long term care insurance claims still open (still being paid).  Claim amounts rounded off.

Tags: claims, long-term care insurance, study

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