New Claims Data Helps Bust Myths About LTCi

More than half of long-term care insurance claims begin in the home, compared to only 28.2% that commence in a nursing home, according to a recent analysis by the American Association for Long-Term Care Insurance (AALTCI).

In a market notorious for misconceptions, these findings—based on 2017 claims data from six leading LTCi companies—could be a useful sales tool for agents who are trying to stress the importance of this coverage to aging clients.

Over the years, one major consumer myth has resulted from “the LTCi industry doing a very good job of connecting the product in people’s minds with nursing home costs and care,” says Jesse Slome, executive director, AALTCI.

And that’s a big problem, Slome points out, because “there is not a consumer alive who says, ‘I want to be cared for in a nursing home’—especially when they’re older, because they may have spent a short period of time in a nursing home recovering from an illness or an operation.”

Most people consider a nursing home to be “their caregiving facility of last resort,” Slome says. “People want to stay in their homes even when they need care. They have this preconceived notion of, ‘I’m not going into a nursing home, and therefore, I don’t need LTCi.’”

The fact that the majority of LTCi claims actually originate in the home, then, helps make the case that LTCi is, in reality, the complete opposite of what most people think: “It’s nursing home avoidance insurance,” Slome says. “LTCi enables people to get the care they need in the setting they prefer.”

What does that mean for agents? Simple—and powerful: “It means you’re selling them a solution that they want instead of a solution they don’t want,” Slome says.

According to the AALTCI’s analysis, remaining LTCi claims—19.7%—begin in an assisted living facility. Last year, LTCi companies paid $9.2 billion in claims benefits to some 295,000 individuals [see sidebar]. Women accounted for 68% of new claims in 2017.

Jacquelyn Connelly is IA senior editor.