The long-awaited burst of long term care insurance sales to individuals has yet to materialize.
Observers broach a myriad of reasons for this. These include failure to pass a meaningful federal tax deduction, industry instability in the past few years, rate concerns, media people who dont get it, and no implementation of a "Got LTC Insurance" consumer awareness campaign.
I believe that many people are waiting for the wrong cure for the sales ailment. It seems the industry is at a significant crossroads, and it must make some key decisions before sales will pick up. That is the subject here.
The good news is, consumer awareness of the LTC issue has never been higher. For example, more American families are receiving LTC insurance benefits than ever before. In 2002, annual paid claims exceeded an estimated $1 billion for the first time, according to my research.
In addition, at the federal and statewide levels, more political leaders are speaking about LTC and advocating self-reliance. Also, with one notable exception, newspapers and magazines seem to be taking an increasingly positive approach to LTC insurance.
Finally, there are now some 10,000 dedicated LTC insurance professionals blanketing the nation. They are holding community seminars, running LTC insurance ads and prospecting for clients more effectively than ever.
But with all of this, producers are telling me that their individual LTC insurance sales generally are flat or even down from a year ago.
Producer and insurer enthusiasm and support for individual LTC insurance as a meaningful and viable profit line seem to be waning. The potential risk this implies should not be overlooked. If frustrated producers seek other avenues of income, sales will continue to slide. Insurers will then validate their concerns that the product cannot be sold. And, it certainly cannot be profitable.
It is worth noting that the malaise that seems to be dampening enthusiasm for the product has not spread to carriers in the group LTC insurance market. They are indeed moving forward with aggressive and focused efforts to capitalize on the enormous need for LTC insurance.
But, again, what about individual LTC insurance? Will sales achieve the hoped-for momentum in the year(s) ahead? In my opinion, not until several significant changes occur. These changes include:
The rather insular individual LTC insurance industry needs to transform itself from looking within to truly looking outward.
