Demand Grows For Worksite LTC

All of the companies have developed products for their niche market. In addition, all use detailed marketing materials, have an effective method of distribution, efficient administration, and a dedicated sales and support team.

Most carriers in the worksite LTC insurance market have the ability to deliver a multi-life individual product or a true group product.

That means there are a lot of choices to consider when determining which product is the best fit for a particular employer.

This decision will be driven by the employer/employees needs, the number of employees, and the employees locations and accessibility to products. It will also be driven by the access employees have to a trained LTC insurance specialist who has the ability to deliver the education needed to implement a worksite offering.

Although early forms of LTC insurance existed as many as 30 years ago, worksite LTC insurance has been a product line that evolved in more recent years, especially the last decade.

Today, employers of all sizes have shown an interest in the worksite form of coverage.

For example, in the last 12 months, I personally have received a dramatic increase in inquiries from employers who want to learn about offering LTC benefits to their employees. These employers dont say "worksite LTC insurance" when they phone me–but they do say they want to consider offering "LTC insurance on a payroll deducted basis." They usually give their reason, too: They say they want to see whether this could enhance their employee benefits packages.

As far as I can tell, a key impetus for this increase in inquiries was the rollout of the federal governments LTC voluntary insurance program in July 2002.

By the way, most of these calls come from employers with 1,000 or fewer employees.

The appeal, for employers, is that adding LTC insurance to a benefits package typically costs the employer little in terms of money and administration. There are even tax incentives for the employer to contribute to the premiums wholly, in part, or in the form of executive carve-outs.

It is not just employers who are interested, however. In many recent studies, employees have indicated that the number one voluntary benefit they would consider adding is LTC insurance, paid for through payroll deduction.

My own experience in worksite sales supports that finding. Increasingly, in fact, employees tell me they want this LTC coverage not only for themselves but also for their parents.

A good number who actually buy the coverage tell me they are buying because they have had a personal experience with seeing a loved one face the tremendous costs of LTC. This experience has made them decide they do not want to burden their own loved ones with the emotional struggle and expense they themselves have experienced.

From the employee perspective, obtaining the coverage through work is often preferable because the carrier is viewed as accountable to the company and the individual. In addition, worksite purchase of LTC insurance is consistent with how employees purchase other forms of health insurance benefits such as dental and vision care.

Several factors frequently are cited as accounting for increasing public interest in LTC insurance. These include the aging of the population, the availability of better product offerings and increased consumer awareness.

Without question, LTC needs in this country have become a matter of great concern in recent years, as more people become aware of the costs and gaps in public coverage, combined with the increasing number of elderly individuals. Now, the news is alive with discussions about strategies for structuring private pay options for LTC. This reflects a distinct societal shift toward expecting people to take personal financial responsibility for benefits and retirement savings.

The bottom line? With consumers becoming increasingly aware of LTC insurance and with the government backing away from sharing in the expense of such care, public interest is growing in finding ways to protect families from the high cost of nursing home and home care. This is what is propelling employers to look into how they can provide this insurance product through the workplace.

Roger T. Nickel, CLTC, is manager of affinity and worksite marketing for Gelbwaks Insurance Services Inc., Plantation, Fla. His e-mail is: rtnickel@ aol.com.

Reproduced from National Underwriter Life & Health/Financial Services Edition, September 1, 2003. Copyright 2003 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.