Depending on whom you talk to, long term care insurance industry sales either are better than ever, or they have clearly seen better days. What's causing the disconnect?
After 20-plus years of involvement in marketing insurance and financial products, I can tell you the answer is quite simple. Those who recognize the evolution of consumers are seeing growth. Those who operate under yesterday's premises aren't.
When it comes to long term care issues, what is causing consumers to evolve, and how are these changes affecting attitudes? And what marketing messages will propel sales to higher levels?
For the past five years, consumers have been inundated with messages about the need for LTC planning. By one estimate, the average adult over the age of 50 has received more than 250 messages during that time. In many cases, he or she has responded. The federally funded LTC planning awareness campaign conducted last year in eight states drew an 8% response rate. That level is the envy of any direct marketer.
Moreover, our association's 2005 monitoring of the all-important consumer print media witnessed a virtual doubling (up an estimated 85%) of articles extolling the importance of long term care planning. On the positive side, virtually all the articles encouraged readers to investigate long term care insurance as a viable solution.
Regrettably, many of these same articles associated LTC insurance with the one harmful term expensive that has limited the growth of market penetration. Perhaps more importantly, the vast majority incorrectly portrayed what protection would cost. In the era of 10-second sound bites, this one spells bad news for increased sales.
For many insurance and financial products, consumer acceptance is closely correlated with constructive media attitudes and corresponding exposure. Both come in phases that evolve over time. Prime examples are 401(k) products, which underwent a similar evolution in both message and acceptance. The first generation of media coverage explained the virtues of saving for one's own retirement. Over time, media coverage and consumer understanding evolved into in-depth assessments of investment options and, of late, administrative cost-saving measures.
The first phase of creating awareness for LTC insurance has ended, though the results will carry on for some time. The future growth of sales will correlate directly to how effectively one delivers second-generation messaging–in particular, ways that LTC insurance can be made highly affordable. If the media's and consumers' perceptions are that LTC protection is expensive, overcoming this will not be simple. However, it can be accomplished.
