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Long term care insurance: Trends and opportunities
By Jesse Slome
November is Long Term Care Awareness Month and three trends -- heightened consumer awareness, younger buyers, reformulated products and the intensification of multi-life sales -- have led to a steady growth of LTC insurance policies. Despite some adverse factors -- in particular, the weakened economy -- our sales forecast for new long term care insurance policies and certificates for the year will be in the 385,000 range, with premiums up several percent over the prior year.
What's driving the continued growth of new policy sales, and how can you capitalize in the year to come? The industry is benefiting from heightened positive coverage within consumer print and broadcast media about the importance of long term care planning. More importantly, many of the reports convey important information about the best ages to start planning (with a slant toward pre-retirement) and what constitutes appropriate and affordable coverage. News stories are actually telling consumers when and how to procure insurance protection.
Once primarily a senior product, buyers of long term care insurance continue to get younger. As recently as 2000, the average policy was written on a 67-year-old. Last year, according to Association studies, some 83 percent of all new individual applicants were under the age of 65, while the average age was 58. As a result of the significant demographic shift, leading insurers have retooled their product offerings to address the two primary concerns of younger buyers: affordability and the concern about paying many years for something that might not be needed.
The result has been the introduction of a variety of "life stage" long term care insurance policies that enable policyholders to lock-in their health insurability and purchase a more limited level of protection with the future ability to purchase additional coverage periodically in the future. Provisions for these policies vary, and it's fair to recognize that the added coverage is purchased at attained-age rates. That said, the ability of agents to now allow pre-retirement-age buyers to "kick the tires" by owning some long-term care insurance offers one of the greatest opportunities to expand and grow market penetration into the future.
Looking ahead, three significant marketing opportunities will likely yield the greatest results for producers seeking to identify new prospects or convert their existing clientele into LTCI prospects.
The first is recognition of maturing awareness among consumers. The industry has entered a new phase of awareness; one that requires focus on new messaging pertaining to health insurability, affordability and the ability to receive care in one's own home.
For those targeting seniors, the increasing number of states rolling out LTC Partnership policies has generated a good deal of excitement among insurance agents who must now complete additional continuing education training. The opportunity to build sales -- especially among middle-income consumers -- will be predicated on the willingness and ability of states, insurers and agents to promote the importance of LTC planning, coupled with the key benefits provided by Partnership provisions. It's still very early in that process.
Finally, the message of affordability continues to provide the greatest opportunity to overcome existing misperceptions. Studies repeatedly validate what's been known for well over a decade; that consumers perceive the cost of LTC insurance to be higher than it really is. A message of affordability always plays well. It's one that, to date, has not been widely used; but expect that to change as more aggressive marketing techniques heat up.
*For further information, or to contact this author, please leave a comment and your e-mail address in the forum below.
What's driving the continued growth of new policy sales, and how can you capitalize in the year to come? The industry is benefiting from heightened positive coverage within consumer print and broadcast media about the importance of long term care planning. More importantly, many of the reports convey important information about the best ages to start planning (with a slant toward pre-retirement) and what constitutes appropriate and affordable coverage. News stories are actually telling consumers when and how to procure insurance protection.
Once primarily a senior product, buyers of long term care insurance continue to get younger. As recently as 2000, the average policy was written on a 67-year-old. Last year, according to Association studies, some 83 percent of all new individual applicants were under the age of 65, while the average age was 58. As a result of the significant demographic shift, leading insurers have retooled their product offerings to address the two primary concerns of younger buyers: affordability and the concern about paying many years for something that might not be needed.
The result has been the introduction of a variety of "life stage" long term care insurance policies that enable policyholders to lock-in their health insurability and purchase a more limited level of protection with the future ability to purchase additional coverage periodically in the future. Provisions for these policies vary, and it's fair to recognize that the added coverage is purchased at attained-age rates. That said, the ability of agents to now allow pre-retirement-age buyers to "kick the tires" by owning some long-term care insurance offers one of the greatest opportunities to expand and grow market penetration into the future.
Looking ahead, three significant marketing opportunities will likely yield the greatest results for producers seeking to identify new prospects or convert their existing clientele into LTCI prospects.
The first is recognition of maturing awareness among consumers. The industry has entered a new phase of awareness; one that requires focus on new messaging pertaining to health insurability, affordability and the ability to receive care in one's own home.
For those targeting seniors, the increasing number of states rolling out LTC Partnership policies has generated a good deal of excitement among insurance agents who must now complete additional continuing education training. The opportunity to build sales -- especially among middle-income consumers -- will be predicated on the willingness and ability of states, insurers and agents to promote the importance of LTC planning, coupled with the key benefits provided by Partnership provisions. It's still very early in that process.
Finally, the message of affordability continues to provide the greatest opportunity to overcome existing misperceptions. Studies repeatedly validate what's been known for well over a decade; that consumers perceive the cost of LTC insurance to be higher than it really is. A message of affordability always plays well. It's one that, to date, has not been widely used; but expect that to change as more aggressive marketing techniques heat up.
*For further information, or to contact this author, please leave a comment and your e-mail address in the forum below.
