Claims payments made on short-term care insurance (STCi) policies in 2016 rose 5.8 percent compared to 2015, an industry group reported last week.
The number of new STCi claims opened in 2016 rose 23.4 percent compared to 2015, the National Advisory Center for Short-Term Care Information (NACSTCi) reported.
Data was obtained from six of the larger short-term care insurers. The center did not release the dollar amounts for claims payments or the number of new claims opened with insurers.
“This is a newer industry so the number of new claims opened is still relatively small, but clearly tens of thousands of Americans received a benefit in 2016 as a result of having purchased STCi,” said Jesse Slome, director of the center, in a news release.
The center reported the data as part of its second annual study of policy sales, buyers and claims.
Agents find STCi policies valuable for clients who cannot qualify for or afford the cost of traditional long-term care insurance (LTCi).
Agents who sell Medicare find STCi policies also fill gaps in coverage for older clientele, Slome said.
New Business Premium Up 13.2 Percent
Last month, the center reported that new business premium collected from STCi policies sold in 2016 rose 13.2 percent compared to 2015 as agents show an interest in the product line.
The number of STCi policies sold in 2016 grew by 16.6 percent compared to 2015, the center reported.
STCi typically covers a policyholder for a 360-day period or less for costs associated with home health care, assisted living facilities, skilled nursing home stays and adult day care and hospice.
Periods longer than a year are covered by long-term care insurance, or LTCi.
In 2015, the average yearly cost of an STCi policy was $1,043 and insurers sell thousands of STCi policies every year.
"It's important to know that insurers are paying benefits because that's exactly why people purchase insurance, to have funding when a need arises," Slome said.
The center’s first short-term care insurance summit will be held in Dallas next month and the conference runs in conjunction with the American Association for Medicare Supplement Insurance's Ninth Medigap industry Summit.
InsuranceNewsNet Senior Writer Cyril Tuohy has covered the financial services industry for more than 15 years. Cyril may be reached at [email protected]
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