By Cyril Tuohy
John Hancock has announced the launch of a new online platform to sell long-term care insurance policies in a market that is experiencing new competition and higher prices due to rising medical costs and lower interest rates.
The system, known as “LTC Captivate,” is designed to “broaden the reach” of financial professionals and advisors into the LTCi marketplace by “improving the customer experience and enabling remote selling,” a company spokesman said.
Laura Vail Wooster, vice president of marketing for John Hancock, said in a statement that the company had developed the system to also make it more convenient for people to research long-term care coverage while consulting their financial advisor, either in person or online.
Long-term care insurance companies have raised rates by as much as 30-50 percent over the past five years as interest rates have remained low, as the cost of care has gone up and as other insurance companies have retreated from the long-term care insurance market.
With affordability an issue, other products like hybrid life and annuity products have started to compete with LTCi products. Some life insurance products now offer long-term care clauses, for instance.
In 2013, the median annual rate for a private nursing home room was $83,950, up from $67,525 in 2008, according to the Genworth Financial Cost of Care Survey 2013. By contrast, rates charged by home care companies for “nonskilled” services, have remained flat at about $19 an hour, the survey also found.
As Medicare generally doesn’t pay for assistance with activities of daily living, Americans who need long-term care turn to the private insurance market. Surveys have shown that Americans are interested in buying long-term care coverage, as long as it is affordable.
At least 70 percent of people over age 65 will need some form of long-term care, according to Medicare data. LTCi offers coverage options ranging from hourly homemaker services to help people with tasks at home, to 24-hour-a-day supervision in a skilled nursing home.
Cyril Tuohy is a writer based in Pennsylvania. He has covered the financial services industry for more than 15 years. He can be reached at [email protected].
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