Question: How have baby boomers responded to the need to prepare for long term care expenses?
O’Brien: By and large, it seems that consumers–including baby boomers–are rejecting standalone LTC insurance due to the expense, especially considering that they hope never to need to use the coverage.
Consider the numbers from LIMRA: Standalone LTC insurance sales fell 23% in 2009; those sales have fallen in six out of the last seven years; and only 5 million people are estimated to have individual LTC insurance in force. This suggests that only a small portion of the 39 million baby boomers, who are rapidly approaching retirement, are insured for LTC.
Question: Is there a solution to LTC expenses that baby boomers will find more palatable?
O’Brien: The income opportunities provided by the income riders and withdrawal benefits of fixed and fixed indexed annuities solve multiple problems for consumers, including the need to prepare for LTC expenses. An annuity with an income rider solves the need for a reliable income that lasts as long as you do.