Glimmers Of Hope For An LTC True Believer

For true believers like myself, watching the relative stagnancy of long term care insurance sales over the last few years has been a yearly testing of faith.

The products promised arrival is always around the corner. It has become the insurance industry equivalent of Waiting for Godot.

We believers (and yes, I have owned an LTC policy for several years, so I am putting my money where my mouth is) know that this is an invaluable and sorely needed product among great swaths of the population. Yet the question always comes up: Why havent sales taken off the way they should?

With that backdrop, it was encouraging to read in last weeks National Underwriter that there are some signs things may finally be changing. While it may still be too early to declare unequivocally that this is finally the corner around which the products sales take off, there are definite signs of hope.

For one thing, Americas Health Insurance Plans reported that 901,000 LTCI policies were sold in 2002. This was up from 732,000 the previous year and amounts to an increase of 23%.

Quite impressive, you may be thinking. Yet it is sobering to see that 2001s sales were less than the 751,000 policies sold in 1999.

What makes the tally for 2002 interesting is that there were only 104 LTC insurance carriers in the market. This was down from 127 the previous year and represented the smallest number of carriers in the business since 1987. So, even though there were far fewer carriers in 2002 than before, they sold more policies.

Also encouraging was that sales of employer-sponsored LTC plans rose in 2002 to 899 from 820 the year before. There are many who believe the worksite will be the place where LTC insurance sales (either employer-sponsored or on a voluntary basis) catch fire with the greatest number of people. But many producers will tell you that this is not an easy sale and for it to be successful, support by the employer (financial or otherwise) is a necessity.

Sales results would seem to bear this out. As reported in last weeks issue, Eastbridge Consulting Groups survey of 2003 voluntary benefits sales showed that LTC accounted for only a 2% share of the market, well behind products such as life insurance and disability insurance.

So, at this point you may be thinking has anything really changed?

If thats the case, Id like to direct you to page 25 where youll find the testimony of Peter Goldstein, another true believer who is encouraged because his phone is ringing again after two years.

“I believe that the LTC insurance market is now poised for another round of growth,” writes Goldstein, executive vice president of the Long Term Care Group, Inc., El Segundo, Calif. “A new carrier can look at the landscape and see a bright picture.”

That picture, of course, gets some of its brightness from the fact that it is dawning on baby boomers and seniors that they should buy the product to ensure they will get the care they need and to protect their assets.

Boomers, in particular, are facing LTC in terms of their living-longer-than-ever parents who need it. This experience of the boomers may be the best educator in terms of stimulating demand for the product. But the industry hardly can afford to wait until each and every boomer confronts the parent LTC situation.

Any discussion of this topic always seems to come back to the need for education. Thats true, but Im beginning to believe its got to be the kind of educational experience that jolts, making the situation something people feel viscerally.

How about LTC as reality TV?

Steve Piontek

Editor-in-Chief


Reproduced from National Underwriter Edition, July 29, 2004. Copyright 2004 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.