Long-Term Care Month was created 20 years ago to increase awareness of long-term care among insurance professionals and consumers.
As November brings another LTC month, the need to shine the spotlight on LTC has never been greater, industry experts say. According to the American Association for Long-Term Care Insurance (AALTCI), the number of individuals who purchased traditional LTCI products declined last year.
“Some 49,000 individuals purchased a traditional long-term care insurance policy,” said Jesse Slome, director of the organization. ”Keep in mind that today, more people are opting for a linked-benefit product such as a life insurance policy that can also pay long-term care benefits.”
Slome is sharing information with leading insurance professionals who educate consumers and offer LTC planning solutions.
“The decline of traditional policies has been steady since reaching a peak in 2000 and 2001, when over 700,000 new policies or group LTC certificates were purchased in a single year,” he added.
Reasons For The Decline
It is true that sales for traditional LTCI dropped last year, noted Tom Riekse, managing partner of LTC Partners, Inc. A few reasons for this decline include early market disruption due to the pandemic, carriers leaving the marketplace, and companies repricing products and making them more affordable.
On the other hand, there has been a growth in life/LTC plans especially in the voluntary group market place, Riekse added.
The biggest trends in LTCI recently have been in the hybrid life-LTC insurance products, he pointed out. Although the products have been around for a while, the trend now is to have longer pay periods, such as up to age 100, to allow for more affordable annual payments.
Since consumers are concerned about inflation, carriers are also responding with products that include benefits that increase over time. In addition to the long-offered 3% and 5% compound inflation increase riders, one carrier is offering a medical CPI option, Riekse said.
Other carriers are building products on indexed universal life and variable life chassis to link market performance to future benefits – a popular option for younger buyers.
Reaching Out To Consumers
A few things are helpful when reaching out to consumers to discuss their LTC planning, Riekse said. First, the pandemic has increased the demand for care at home and more people are avoiding nursing homes.
“I think talking to people about their plans to age in place as they get older will be critical,” he said.
Also, instead of focusing on the person who may need care, more people are thinking about the impact of being a caregiver – and how to plan around the topic.
“No one plans to be a caregiver but many of us are thrust in that role whether we like it or not,” Riekse said. “A typical person may be more likely to plan if they focus on the impact on possible caregivers. “
Best Prospects For LTCi
As agents try to sell their LTCi products during Long-Term Care Month and beyond, Riekse pointed out that buyers can vary greatly and offered the following categories of typical buyers:
1. Someone who has personal experience with LTC issues and understands the cost
2. “Planners” who understand the value of insurance
3. Business owners who are looking for a tax-deductible insurance benefit for family and key employees.
People who are harder to sell to are those who have a more negative outlook on life and don’t trust institutions, he added. “LTC insurance is a product built on trust,” he said.
There are several ways to communicate the value of LTCi to prospects and clients, Riekse said. Many carriers have switched from offering product-centric marketing material to material that is more educational in nature. Also, organizations like Life Happens have libraries of material that can be shared via social media to raise awareness of this important product.
“Marketing success takes time,” Riekse said. “So, have a plan that lasts beyond LTC Awareness Month.”
Ayo Mseka has more than 30 years of experience reporting on the financial-services industry. She formerly served as Editor-In-Chief of NAIFA’s Advisor Today magazine. Contact her at [email protected]