LTCi Will Be A Big Seller – If Someone Writes The Policies

BOSTON -- Agents should not lose sight of the potential to move long-term care coverage, said Vince Bodnar, chief actuary with LTCG.

A hot seller in the 1990s, LTCi policies have cooled considerably. Seven of the top 10 LTCi carriers from 2001 have exited the market, Bodnar said. Other carriers are raising premiums substantially as low interest rates turned the policies into money losers.

Still, a huge need remains.

"Carriers are looking to get into this market again," Bodnar said. "If we don't figure it out, someone else will."

Bodnar spoke Wednesday during an opening session of the 2016 Retirement Industry Conference hosted by LIMRA.

Most recently, carriers and agents are moving LTC coverage as part of hybrid life insurance policies. These products have sold as well as original LTCi policies did years ago, Bodnar said, but they are not the answer.

"They're still not getting the penetration" into the market need, he explained.

The costs of providing long-term care were $240 billion  in 2014, the most recent year statistics are available. Of that amount, 63 percent was covered by Medicare and 20 percent came from direct out-of-pocket spending. Only 3 percent came from private long-term care insurance.

With people living longer and chronic illnesses becoming more widespread, LTCi will be a big seller -- if someone writes the policies, Bodnar said.

And consumer attitudes are changing, he noted. Survey data from 1990 showed about 33 percent of respondents said they expected to require long-term care at some point. By 2010, that figure doubled, Bodnar said.

"I think this is because people are watching a relative go through this experience," he said.