Carriers and producers alike have seen a marked improvement in consumer awareness regarding long term care insurance in recent years. This, plus demographics, tops the list of reasons why the LTC insurance industry remains optimistic about the products future.
But, while more Americans than ever appear primed for buying LTC insurance, the industry must be careful not to get ahead of itself. Marketing and field professionals must go back to basics, especially when it comes to understanding the economic value of LTC coverage. For many, the ultimate buy decision comes down to just that—economics.
A 2003 survey of more than 1,100 Americans who shopped for LTC insurance, conducted by LIMRA International, indicates that individuals who buy the insurance do so for very personal reasons.
For example, when asked to choose the 3 most appealing features of LTC insurance, these active shoppers did not necessarily answer coverage for nursing home, home health or assisted living care.
In fact, just over half the shoppers identified coverage for care received in a nursing home as an appealing feature.
What about the other 50%? It appears shoppers are honing in on specific features for very personal reasons. There is evidence that some have a succinct plan in mind about what type of care they prefer.
Nearly half the shoppers said either nursing home coverage or home health care coverage was appealing but not both. This explains much of the discrepancy.
For example, a third who indicated that home health care coverage is a top feature did not also say nursing home coverage. These individuals expressed less concern over needing nursing home care someday and may not foresee it in their future at all.
Home health care, then, is the feature that resonates with them. In addition, a number of shoppers, albeit small, find other features such as shared care, lump-sum payouts, restoration of benefits, hospice care, and caregiver training as more appealing than one or more of the core benefits.
Such results may lead one to ask, how is it that the LTC insurance industry is not getting across a clear message about the products core coverages 100% of the time?
One may also wonder if, to some degree, the industrys competitive nature, along with the fact that insurers are vying for the attention of a small pool of motivated shoppers, is clouding the true message. (Note: Just over 6% of Americans shopped for LTC insurance in the previous 24 months.) As a result, some providers may rely on certain value-added feature to encourage purchases.