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The number of Americans who have purchased long term care insurance more than tripled over the last decade, going from 1.9 million in 1990 to 6.8 million in 1999, according to a survey released by the Health Insurance Association of America.

HIAA in 1987 began tracking sales of LTC insurance. Since then the market has grown annually by an average of 18%. More than 750,000 policies were sold in 1999, up 40% from 538,000 in 1998, HIAA says.

In total, 124 companies sold LTC insurance in 1999, with premium volume for policies sold in the individual and group association market totaling about $789 million, reports “Long-Term Care Insurance in 1998-1999.”

This volume is not surprising to Cindy Williams, co-director, LTCI Operations, World Insurance Association Inc., Atlanta. She points to personal experience as a means by which many consumers have decided to buy LTCI products, and suggests the roll-out of the federal Long-Term Care Security Act will cause even more consumers to think about buying LTC insurance products.

Under the bill, the Office of Personnel Management will develop and administer a LTCI program for federal employees and retirees.

“As the federal LTC program rolls out it will increase consumers awareness of the long term care insurance product,” she says. “And as more is heard through the media on the LTC program I would anticipate consumers will hear more educational information about the cost associated with long term care and begin thinking of their own need for this type of protection in the future.

“Perhaps they will look to their employer for help in this regard,” Williams says.

In fact, the survey indicates that the employer-sponsored market is an area of potential expansion for sales of LTCI. The number of employers offering it as an employee benefit jumped over the last decade, from 135 in 1990 to over 3,200 in 1999.

Brokers “should do their best to get in front of the decision makers and educate them on LTCI and how group rates are available,” Williams says. “Im sure there are employers out there who are not aware that they can obtain this discount for their employees.”

Williams cites a “lack of education on LTCI as well as the potential tax deductions available to an employer” as reasons the employer-sponsored LTCI market has not seen even greater growth.

The employer-sponsored market accounted for 25% of LTC insurance sales in 1999, and the total number of policies sold in this market passed 1 million, the survey says.

The average annual growth in the employer-sponsored market has outpaced growth in the individual and group association markets, according to the survey.

Susan Coronel, long term care director for HIAA and author of the study, says one possible reason for this pace is that LTCI is a growing employee benefit in many companies.

“Just as health insurance grew by offering it through the employer, a lot of people see LTCI growing through employers” as well, she says.

Although sales in the individual market “are phenomenal,” there are hindrances selling to individuals that dont come up when selling to employees, Coronel says.

“You tend to market to older individuals in the individual market, and premiums are higher,” she says. “The average age is 60 or 65 in the individual market and 43 in the employer market.”

Coronel calls “Long-Term Care Insurance in 1998-1999″ a “true study” because it surveys all known LTCI carriers.

“It gives you an objective snapshot,” she says. “It proves there is a market out there, its growing, its strong and it has a lot of potential growth areas.

“The products are getting better and premiums are not as high as people think.”

Joyce Ruddock, vice president, long-term care at MetLife, New York, agrees that better plans are part of whats behind the growth.

Expanded distribution capabilities are also a reason that sales of LTC policies have mushroomed, she says.

“Over the last decade more and more representatives in the insurance world, in banking and stock brokerages have all recognized a need and an opportunity,” she says. “Thats driving the growth.”


Reproduced from National Underwriter Life & Health/Financial Services Edition, March 11, 2002. Copyright 2002 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.


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