The long term care insurance industry paid a total of $10.3 billion in claims for 2018 according to AALTCI (American Association for Long Term Care Planning). By far, this is the largest amount of claims paid by long term care insurance companies. From 9.2 billion of claims paid to 295,000 policyholders it rose by 2.7 %, to $10.3 billion and 303,000 policyholders. Go deeper with Long Term Care Insurance Claims Experience: Policyholders Paid A Record $10.3 Billion in 2018.
Long Term Care insurance has high premiums with the offset that it provides significant benefits. For those buying long term care insurance, there is a strong likelihood that they will make a claim. Keeping in mind that insurance companies must take in more money than they pay out, premiums will be higher for policies that result in a high percentage of claims. The long term care insurance industry has experienced significant premiums on older policies. It is important to note the key word is older policies that were sold before the NAIC Model Rate Stabilization Act of 2002 (amended in 2014). And in States that have adopted the Model Acts, insurance companies must have rate increases approved by that state’s insurance regulator.
Here’s a look at The State of Long-Term Care Insurance: The Market, Challenges and Future Innovations from the National Association of Insurance Commissions and the Center for Insurance Policy and Research. While this was published in 2016, the main points remain relevant and the report covers the state of the LTC market, the economics and benefits, the LTC insurance puzzle, insurer in-force LTC management along with reform proposals and regulations.
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