Phyllis Shelton writes: I must respectfully disagree with Tinker Kelly and David Bardes in their article, Gaining traction for LTC insurance (LTC e-Wire, January 2009).

This article implies that selling traditional long term care insurance in the worksite has failed. Nothing could be further from the truth. The article quotes old information from older true group sales and even mentions the Long Term Care Partnerships had failed as of 2005. The reality is that the Partnership expansion did not start until 2006, after enabled by the Deficit Reduction Act of 2005, which wasn’t even passed until February 8, 2006.

The fact is that 45% of LTC insurance policies purchased in 2007 were bought at work. This is a mixture of true group and the exploding multi-life market. Multi-life is growing like crazy as more carriers allow individual products to be sold with premium discounts and underwriting concessions.

My firm assists Blue Cross and Blue Shield of Tennessee with worksite LTC insurance sales, and we have had enrollments up to 50%. It’s all in how the employee education campaign is conducted. People have to know that LTC insurance could be the only thing that can keeps them out of a nursing home, and they have to know they could be hit by a drunk driver next week and need LTC. We have employees buying LTC insurance on their adult children in their 20s, whom they know they would be responsible for if that single adult child were to become paralyzed through an accident or any other problem that caused a severe injury.

As for the combo products, yes, I’m glad we have them as an alternative. What we have to be careful of is misleading employees into thinking these products provide adequate coverage when they don’t. A $100,000 life insurance policy paid at 4% with a $4000 a month benefit sounds good today but what would this be in 20 years when the cost of care may have tripled?

For the modest cost, it’s great to have combo policies, and I’d love to see everyone with them. But let’s not say they replace the robust coverage of a standalone policy, which can definitely be sold when it is communicated correctly.

Phyllis Shelton
President
LTC Consultants and LTCiTraining.com
Hendersonville, Tenn.
Phyllis@LTCiTraining.com