Largest Open LTC Insurance Claim Balloons to $1.7 Million in Paid Benefits

The largest open long-term care insurance claim as of December 31, 2011, has reach $1.7 million in paid benefits, according to an American Association for Long-Term Care Insurance report.

The female claimant purchased insurance at age 43 with an $881/year premium, and made her first claim three years later. This has continued for nearly 15 years.

“Insurers paid some $6.6 billion in benefits to roughly 200,000 individuals last year,” said Jesse Slome, Executive Director of the industry trade group that compiled the data from 10 leading long term care insurers, in a statement. “Long-term care insurance claims can last for years and amount to hundreds of thousands of dollars.”

Each year, AALTC collects claims data, including the largest open claims that are being paid as of the last day of the year.

Coming in at #2 on the list is a male who purchased LTC insurance at age 45 with a $3,374/year premium. Three years and ten months after buying insurance, he began claiming benefits and has been doing so for more than six years, for a total claim amount of $1.2 million as of Dec. 31, 2011.

“Long-term care insurance is not the lottery,” Slome said. “A policy holder who paid $3,000 in premiums and received benefits exceeding $1.5 million is not a winner. But having this protection in place can certainly pay off and for thousands of Americans it increasingly is.”

Only a small fraction of Americas, at 8 million, currently have some form of long-term care insurance. The AALTC study revealed that 10.4% of new individual claims initiated during 2011 began before the claimant reached the age of 70.

Accidents or illnesses, rather than old age, are common reasons younger people begin claiming insurance benefits for extended periods of time, Slome continued. The five most common reasons to make a LTC insurance claim were found to be Alzheimer’s disease, stroke, arthritis, circulatory issues, or injury, according to the study.

Five of the top seven largest open claims were from female policy holders, and the top five ranged between $1 million and $1.7 million. One female claimant began receiving her benefits a mere three months after purchasing her $4,520/year policy, translating to approximately $991 in benefits for each $1 she paid for her policy.

View the list of the top seven largest open claims here.

Written by Alyssa Gerace

Alyssa Gerace

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