Long-Term Care Advisors Keep Up the Battle

The American Association for Long-Term Care Insurance is fighting to make consumers aware of the need for protection against long-term care (LTC) risk this month. This in the face of the chilly reception issuers of stand-alone long-term care insurance (LTCI) are getting from investors and insurance regulators.

The new Long-Term Care Awareness Month campaign started Monday.

AALTCI and other insurance industry groups, including the 3in4 Association and Life Happens, have struggled for years to persuade that LTCI could help families plan for catastrophic nursing home and home care bills. Now, the coverage is helping hundreds of thousands of American families with long-term care costs.

Jesse Slome, AALTCI’s director, noted in the announcement of the latest awareness campaign that the group has been organizing the Long-Term Care Awareness Month campaigns and similar campaigns since 2001.

This year, AALTCI is distributing awareness month banner artwork. Insurance advisors and marketing organizations are trying to amplify the campaign by posting social media posts using hash tags such as #LongTermCareAwareness, #LongTermCareAwarenessMonth and #LTCAwarenessMonth.

“An effort such as Awareness Month achieves success when it happens on its own,” Slome said in the campaign announcement. “I am personally so pleased when I see posts or see national marketing organizations focusing on the month.”

The Background

Issuers of the stand-alone LTCI policies promoted the products heavily from the 1970s through the late 1990s.

But the issuers turned out to be too optimistic about earnings on their investments on bonds, and inaccurate about how  tightly consumers would hold on to LTCI policies, even in the face of waves of big premium increases.

Today, LTCI issuers are helping hundreds of  thousands of Americans pay for long-term care.

An experience report from the National Association of Insurance Commissioners shows that issuers of stand-alone policies were providing LTCI coverage for 6.3 million people in 2020.

Those issuers received 91,009 new LTCI claims in 2019 and had a total of 285,059 open claims, according to another NAIC experience report.

Partly because stand-alone coverage turned out to be a better value for the insureds than issuers had expected, stand-alone policy issuers received about $1.2 billion more in LTCI claims than in LTCI premium revenue in 2019.

The Present

Some insurers, including New York Life, Thrivent, Mutual of Omaha, CNO Financial and National Guardian Life, continue to fight to protect consumers with stand-alone policies.

Lincoln Financial, OneAmerica and other companies continue to fight to protect consumers with products that combine LTC benefits with annuities, or LTC benefits with life insurance.

Groups continue to come out with studies documenting the enormous, unmet need for support for people in need of long-term care and their families.

In October, for example, the Association for Frontotemporal Degeneration released a report on the impact of frontotemporal degeneration (FTD), a form of dementia that is much less well-known than Alzheimer’s disease and can begin to affect some people who are in their 20s.

The report authors quote “Anne”, who learned that she had inherited an FTD gene from her father. “I didn’t plan on being sick like this, so I didn’t plan financially for this,” Anne said at a meeting for FTD researchers and people with FTD.

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