Financial advisors in the long-term care insurance (LTCI) market have faced a barrage of headlines in recent years about low interest rates and problems with actuarial projections.
But most of the 693 insurance and investment professionals who filled out an LTC planning market survey organized by ThinkAdvisor and LifeHealthPro in November 2014 still sell products that offer long-term care (LTC) benefits, and many said they were optimistic about 2015 sales.
Additionally, 56 percent of the participants said their LTCI sales had held steady in the previous 12 months. In spite of all of the gloom and doom, 25 percent said their LTCI sales were up. Thirty-nine percent said they expected LTCI sales to hold steady in 2015, and 55 percent predicted LTCI sales would increase.
The participants had been selling LTC products for an average of 7.4 years, and they said LTC products and services accounted for an average of 17 percent of their total income.
The survey was sponsored by Genworth Financial (NYSE:GNW).
In other survey highlights:
About 71 percent of the participants said they would like more LTC-related planning, and more than 60 percent of those participants said they want education about LTC product sales strategies and LTC product details. Fifty-eight percent want to know more about how Medicare and Medicaid interact with LTC planning products.
For the participating financial professionals, the most important reason to sell LTC products is to protect clients’ peace of mind. About 68 percent of the participants gave that as an extremely important reason to sell the products. Protecting retirement savings came in a close second. That reason was cited by 67 percent of the participants.
View from the field
During a webcast that discussed the findings, one LTCI distributor, David Hillelsohn, said his 2015 LTCI sales have been 50 percent higher than his LTCI sales for the first four months of 2014, in part because product shifts depressed sales in early 2014.
“People are willing to buy if we are giving them the ability to do so,” Hillelsohn said.
Honey Leveen, another veteran LTCI specialist on the panel, said she thinks the industry is getting over past pricing concerns.
“The long-term care crisis is coming,” she said. “It’s not going away. It’s accelerating.”
Ross Perloe, a third LTCI seller, said he’s been having his best year ever, and he said the biggest obstacle to sales continues to be consumer lack of awareness of LTC risk.
“It’s going to be a great year if you go out and ask the questions,” Perloe said.
Hillelsohn said all financial advisors should see LTC planning as fundamental to their business. Otherwise, if a client needs LTC services and has not prepared for the cost, “all the things they’re trying to do will go up in flames.”
Unexpected LTC costs can ruin any tax, legacy or even lifestyle planning efforts, Hillelsohn said.