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.