OneAmerica Claims Analysis — A Real-World Case Study

Overview

This analysis examines a real long-term care claim submitted under a OneAmerica asset-based LTC policy. The case illustrates the extraordinary financial protection a well-structured LTC policy can provide — and the devastating cost that would have fallen on the family without it.

The policyholder — a retired professional in their mid-70s — was diagnosed with a progressive neurological condition requiring full-time care. What began as periodic in-home assistance escalated over time into 24-hour skilled nursing facility care. The claim continued for 12 years, ultimately paying out $3.6 million in total benefits.

How the Claim Progressed

The claim followed a pattern common to many long-term care situations — a gradual escalation of care needs over time:

• Years 1–2: In-home care assistance, several hours per day. Monthly benefit: approximately $8,000.
• Years 3–5: Full-time home health aide required. Monthly benefit: approximately $14,000.
• Years 6–12: Memory care facility required due to advancing cognitive decline. Monthly benefit: $24,000 at peak.

Throughout all stages, the OneAmerica policy covered costs in full. The family faced zero out-of-pocket care expenses during a 12-year period when costs reached $24,000 per month — amounts that would have been catastrophic without coverage.

The Financial Comparison

To understand the true value of this policy, consider what would have happened without LTC coverage:

The Tax Dimension

For this family, the financial analysis becomes even more compelling when taxes are factored in. To fund $3.6 million in care costs from after-tax savings at a combined federal and state tax rate of 40%, the family would have needed to earn approximately $6 million in gross income — just to cover care. The LTC policy provided all of that coverage from a far smaller premium investment, with the benefits paid out completely tax-free.

Key Takeaways

This case study illustrates several critical points about long-term care planning:

• LTC claims can last far longer than most families anticipate — 12 years is not unusual for cognitive conditions
• Costs escalate significantly over time as care needs intensify
• A single claim can easily exceed $3–4 million in total costs
• Without coverage, even substantial estates can be completely depleted
• The return on investment for LTC insurance in severe claims is extraordinary
• Asset-based LTC policies provide protection even if the claim is never needed