Individual long term care insurance sales dropped 23 percent in the fourth quarter of 2008 and ended the year down seven percent, according to a survey by LIMRA. "The economic downturn had a significant impact on LTCI sales during the second half of 2008," said LIMRA associate analyst Karen Fisherkeller.
"Unlike other, more widely understood and sought after products, LTCI carriers have struggled in their efforts to convince consumers of the need to protect for their LTC risk, and in today's economy, that which is not deemed necessary is put on hold."
Fisherkeller noted that growth beginning in 2007, which saw nearly $650 million in new annualized premium sales, seemed to indicate a change in fortunes for the industry after four years of declining sales.
But as the economy withered in 2008 so did the LTCI market, which recorded sales of just over $600 million for the year. LIMRA estimates that this drop returned sales to where they were in the early 1990's.