The nation’s long-term-care insurers will have paid out $12.3 billion in claims during 2021, a nearly 20% leap over the amount paid out only three years ago, according to the American Association for Long-Term Care Insurance.

The association called the increase “significant.”

In 2018, insurers paid $10.3 billion in claims to 303,000 beneficiaries, and both numbers have been climbing steadily since then, the association said in a statement released yesterday.

The amount of benefits paid grew to $11 billion in 2019 for 310,000 claimants, and to $11.6 billion for 325,000 claimants in 2019. This year benefits were distributed to 336,000 people.

“Take note [of these increases] if you doubt the value of long-term-care insurance protection or question whether insurers are paying claimants,” Jesse Slome, association director, said in a statement. “The amount of claim benefits paid to policyholders grew by approximately $700 million [in 2021] compared to the 2020 payout.”

According to the association’s annual report of claims paid, the $12.3 billion paid represents an increase of $2 billion over the total claim benefits paid by the industry in 2018.

“Some claims amount to small amounts and some can be significant, totally over $1 million,” Slome said. “Even if you do a simple calculation, the average claim amount paid out for the year would equal $36,600 (annually for each beneficiary), and, claims can last for several years.”

The amount reported represents claims for those owning traditional or health-based long-term care insurance. It does not include data for those who have benefits linked to a life insurance or annuity policy. These policies provide payouts for qualifying long-term care needs.

The vast majority (73%) of new long-term care insurance claims begin with care received at home, followed by in an assisted living setting at 18%, and in a skilled nursing home at 9%. Half of claims are started when the beneficiary is between 80 and 89 years of age, the association said. There is a wide range of policy costs depending on the type of benefits purchased and the age of the applicant.

The American Association for Long-Term Care Insurance is an advocate for the long-term care insurance industry and provides education about the importance of long-term care planning.