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Life Health > Life Insurance > Term Insurance

AARP Survey Sheds Light On How Informed LTCI buyers Are

By Jim Connolly

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AARP Survey Sheds Light On How Informed LTCI Buyers Are

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As part of an effort to fine-tune existing long term care regulation, AARP, Washington, released a survey showing the importance that consumers place on having sufficient information to make informed long term care insurance purchases.

The survey was discussed during the recent fall meeting of the National Association of Insurance Commissioners, as work continues on updating the Long Term Care Insurance model regulation.

Van Ellet, an AARP representative, says the survey of 1,061 adults age 45 or older is intended as a first step in gathering information that will be followed by input from focus groups. Feedback will then be sought from insurers who use the findings to test how additional information about LTCI is received by consumers, he says. From those findings, language for improving disclosure and standardized reporting information about LTCI will be brought to regulators for inclusion in revisions to the model, Ellet continues.

Of those surveyed, 79% said they have LTCI.

Of those who have LTCI, the level of their being informed ranged from a high of 64% for how long the insurance company had been in business to a low of 24% for the ratio of the number of claims filed to claims paid. Fifty-seven percent said that were informed of a companys financial rating; 49%, how many dollars the insurance premium increased; and, 47%, how often the premium rose.

Those who had LTCI and said they were not informed about certain issues cited the number of complaints as the highest ranked issue with a total of 54%; and how long the insurance company had been in business as the lowest ranked item, with 20%. A total of 46% said they were not informed about the ratio of claims filed to claims paid, and 43% said they were not informed about the average time it took to settle an LTC claim.

Of those who had LTCI and said they were informed buyers, 70% said that available information made them more confident in selecting a company, while 73% said made them more confident in selecting a policy.

Of those who had not yet bought LTCI, 83% ranked how often the insurance premium increased as the most important piece of knowledge to have in making an informed decision, while 60% saw the number of LTC policies in force as the most important. Eighty-two percent cited the number of complaints and 79% cited how many dollars the insurance premium increased by as important pieces of knowledge needed to make an LTCI purchase decision.

Of those without LTCI, 76% of respondents said a chart would be important in making a decision, and about 70% said it would influence how they would choose a company and a policy.

Thirty-six states have adopted, are in the process of adopting or intend to adopt the August 2000 rating practices and enhanced disclosure amendments found in the current model. Twenty-five states have adopted the rating practices and enhanced disclosure amendments and two states have adopted the disclosure amendments only.

Reproduced from National Underwriter Edition, October 1, 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.

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