The Future is Bright for Long-Term Care Insurance (and for Those Who Sell It!)

long-term-care-insuranceMany encouraging changes are happening in the long-term care insurance market. Over the course of the year, carriers have entered the market, recommitted to the market, and introduced new innovative products.

Long-term care insurance is a product with a future and there is a large market of people in need of long-term care planning. In 2015, more than 100,000 people purchased traditional long-term care policies. The month of November is dedicated to making consumers and financial professionals aware of the need for Long-Term Care Insurance. Here are some of the latest developments …

Carriers enjoying successful 2016

The industry has stabilized with roughly 12 carriers that sell at least 2,500 policies annually. Six of these traditional long-term care insurance carriers reported increased sales in 2015. Genworth recommitted to LTCi when they withdrew from the life insurance and annuity markets. Since then, Genworth has announced several underwriting improvements, product enhancements, and agent support tools. John Hancock’s Performance LTC product uniquely uses Flex Credits to stabilize premium pricing. A new carrier, National Guardian Life, entered the market with Essential LTC. And the list goes on.

New products accounting for sales growth

Sales of short-term policies typically offering benefit periods of one year or less are up 20 percent this year. Most types of care are covered from home health care to nursing home care. The limited benefit period makes the premium affordable for older clients who postponed the LTCi decision and are on a limited budget. Forty-one percent of claims are for one year or less so a shorter-term policy provides considerable protection. The affordability can prove to be an entrée to the middle income market.

Carriers realize the need to overcome, with both financial professionals and consumers, the reputation and fear of future rate increases. Today’s products are priced using years of morbidity, mortality, and lapse experience and in a low interest environment. Premiums are higher initially, but much more stable. The Society of Actuaries studied product pricing and found that 90 percent of 2014 or later products will not need rate increases. Of the 10 percent that may need a rate increase, the average increase is expected to be roughly 10 percent.

Hybrid or Combo products that link long-term care coverage to a life insurance product or annuity are also on the rise. Life insurance CEOs estimate at least 30 to 40 percent of permanent policies now include a long-term care rider.

Support from LTCi specialists

Some producers may still be reluctant to talk to clients about long-term care insurance because of the perceived complexity. If you’re in that category, a firm like Brokers Central will provide the product knowledge and support to help you get started. We can assist with sales strategies, proposals, recommendations, and overcoming client objections.

We also offer an informative client handout:  3 Reasons Long-Term Care Insurance Should be in Your Future. Download it here and ask us how to launch or grow your long-term care insurance sales career. 

America is aging and the long-term care insurance market opportunity has never been better. Yes, the future is bright for the long-term care insurance industry … and for those who sell it!

As the Founding President of Brokers Central, Yoel Bodek has an innate understanding of how financial products work together to solve clients’ business, financial security and wealth accumulation goals. View Yoel’s Bio. Email Yoel.