The American Association for Long-Term Care Insurance reported April 14 that 25 states saw an increase in the number of residents who own long-term care insurance, especially among smaller states.
Alaska, for example, experienced a 130% increase in the number of insured residents. Insured residents increased in Wyoming and Vermont by 62% and 48%, respectively.
The data is from the organization's 2011 LTC Sourcebook.
"Sales of long-term care insurance are increasing as more consumers recognize the importance and affordability of this protection," Jesse Slome, executive director for AALTCI, noted in a statement. "Many insurance agents are having their best years as prospects are seeking them out; something that has never occurred before."
Unsurprisingly, the states with the largest number of insured residents are among the states with the largest number of residents: California, New York, Texas and Illinois.
Pennsylvania and Missouri were the only states to see a decline in the number of insured residents. AALTCI attributes the fall to lapsed policies and deaths that exceed the number of new policy holders.
In November 2010, MetLife announced it would no longer sell new long-term care insurance policies due to “financial challenges facing the LTCI industry." Guardian Life followed suit in February, announcing it would exit the LCTI market as of the end of 2011, citing a "strategic review in 2010" that indicated it would be better for the company to "focus on growing its life and disability insurance."
Slome told AdvisorOne that in the short-term, LTCI will likely "remain a highly specialized niche with 15-25 players," but added that a "return to a higher interest rate environment […] could again make traditional LTCI more financially attractive."
"I suspect you will see an increase in the number of insurers dipping their toe into the marketplace with linked products," he said, "and after the dust settles in terms of seeing where the CLASS Act finally lands, you will likely see a few insurers reassessing the marketplace."