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Industry Outlook

By Sponsor: Prudential

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Don’t look now, but something new and unusual is happening around the long-term care insurance category: It’s finally getting some deserved attention.

Whether it’s because of a concerted industry public-service campaign, demographic shifts, rising concerns about health-care policy or all of the above, there are signs that LTC insurance is beginning to capture more mindshare within the consumer marketplace.

Among the signs: a recent surge in news articles, anecdotal observations from LTC agents, and some fresh research signaling that more people – and younger people in particular – are paying attention.

On the news media front, a recent scan of national news headlines turned up dozens of published articles about LTC from prominent newspapers and magazines within a span of only a few days in November. Among the headlines:

  • Why you need a plan for long-term care (San Francisco Chronicle, Nov. 7)
  • As America ages, issue of long-term care emerges (Baltimore Sun, Nov. 6)
  • Long-term care insurance provides peace of mind (Memphis Commercial Appeal, Nov. 6)
  • Time to address nursing home nightmare (Toronto Sun, Nov. 7)

To be sure, part of the credit for the elevated press interest goes to the 3 in 4 Need More Campaign, the industry-backed, not-for-profit public awareness effort dedicated to promoting the importance of planning for long-term care needs. But broader demographic and attitudinal forces also play a role.

One of them has to do with the aging U.S. population, and the corresponding rise in the number of people who have dealt with long-term care issues for someone they know.

A 2011 study released by  Prudential, for instance, found that knowing someone who has required long-term care services greatly increases concern about an individual’s own needs. The Prudential study, drawn from surveys of 983 U.S. adults, found 78% of those who know someone who required long-term care services are concerned about their needs for long-term care, versus 58% of those with no experience.

Experts also point to age as an influence in rising awareness of long-term care issues“Younger generations are especially in need of education on the importance of long-term care as they create and review their financial plans,” says Margie Barrie, Vice President of the association.

Influence of women Attentiveness to LTC insurance also is rising among certain subsets of the U.S. population. Women, for instance, are paying more attention to the need for long-term care insurance as part of a generally increasing responsibility for financial decision-making. Prudential’s recently completed 10th anniversary study, Financial Experience & Behaviors among Women, found that 82% of women consider it “very important” not to become a financial burden to loved ones. That’s more than the percentage (72%) who deemed it very important to be financially secure if they outlive their spouse. The study also found 15% of women currently own long-term care insurance, slightly higher than the general population average of 13%.

African Americans, too, over-index for LTC insurance ownership, according to Prudential’s 2011 study, The African American Financial Experience. The study found that 15% of all surveyed African Americans owned LTC insurance, while 24% of those who work with professional advisors have LTC coverage. 

Part of the increasing interest in LTC stems from growing public attention to health-care policy issues in general. In particular, the Obama Administration’s decision not to implement the CLASS Act – a part of national health care reform that was designed to address LTC insurance availability – has put a spotlight on big-picture issues associated with aging and long-term care. “The biggest economic risk this country faces is the economic consequences of longevity,” long-term care expert and author Harold Lustig recently told The Baltimore Sun.

For financial advisors and insurance agents, the growing attention is welcome. As the 3in4 Association’s Barrie noted in releasing the group’s recent survey results, “Many people are in a state of paralysis from the economic downturn and are unsure about what to do next…long term care planning specialists can play a large role in helping clients plan for their potential long-term care needs in order to protect their assets in retirement.”

Read more from the LTC In Focus eNewsletter:

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