For LTCI the future is now

"There are a tremendous number of resources that advisors can tap," says Judith Bramson, assistant vice president for LTCI marketing at MassMutual. For information about the forces driving long term care issues, Bramson suggests AARP's Web site (www.aarp.org) as well as the US Department of Health and Human Services site (www.hhs.gov).

But new features on nearly all aspects of long term care insurance have become commonplace as insurers regularly introduce new products with simplified applications, online enrollment and flexible features to meet changing needs. The target for many is affordable, easy-to-understand coverage that offers multi-faceted protection.

"Carriers are innovative and offering reasonably priced and competitive products to cover such items as in-home, elder daycare or assisted-living facility coverage," says AXA's Rold. UNUM's Total Home Care feature allows for anyone to provide care such as a spouse, relative or friend while still providing a benefit to the insured.

"The first generation of LTCI policies were simple catastrophic nursing home-only policies. They lacked home health care or assisted-living facilities benefits," says Bryan M. Place CFP, CLU, of Place Financial Advisors in Farmington, Conn. "Studies show without exception that consumers want to stay at home. The industry had to quickly adapt to this. The next generation of products addressed these flaws and added contract provisions that consumers demanded."

At the same time coverage is increasing, policies are becoming more consumer-friendly but there is still progress to be made in this direction. Potentially valuable provisions such as inflation-protection riders are now commonly offered without a regular price increase. Once inflation is purchased as an option on newer policies it automatically increases for the covered individual. Similarly flexibility in how and where one can receive care has steadily increased. Cost-of-living riders are increasingly available as are policies that offer alternative types of care. Some policies allow shared asset pools between domestic partners. Others have introduced international benefits allowing for coverage anywhere in the world.

Avoid communication breakdown

"There will continue to be greater emphasis on cash accumulation/LTC combination products," predicts Place. "We will soon see fixed and variable annuities with a LTC riders attached. I also expect scaled-down and more simplified products that consumers can more easily understand."

But is product choice the biggest barrier for consumers or is it product complexity? LTC represents a very different product with very different benefit triggers. "It is important to understand what LTC does pay for and, more importantly, what it does not cover," says Noble. He says he believes that the industry in general can do more to simplify its message. Similarly, advisors should aim not to overwhelm clients with information as it can be a complicated sell. At the same time, they should be aware of the many provisions typically offered in an LTCI policy should a prospect inquire about them.

"Look at a client's situation holistically," says MassMutual's Bramson. "A client can often reallocate assets to pay premiums. This is akin to moving from an aggressive investment portfolio to a conservative one as retirement approaches. Advisors can see what's in a client's portfolio as a funding vehicle. Some can purchase an annuity that can provide income to pay the LTCI premium."

Matching a client with the right LTCI policy can be like trying to hit a moving target. Unlike traditional, comparatively simple insurance such as term life or even annuities, long term care policies need to provide ongoing benefits for very specific conditions. Numerous changes, not the least of which are health conditions, can take place in a person's life as they age. Making sure a client is aware of this is one of the first steps when discussing long term care coverage. Pointing out that needs may change can set the stage for presenting the reasons behind why you're proposing coverage. An advisor who's done his homework comes armed with a variety of relevant policies can then make a promising proposal. Let the client know you're presentation is up to date and that not only have you done "comparison shopping" on his behalf but that you've selected policies from only top-rated insurance companies and that you're probably going to be able to help them save money while receiving quality care.

*For further information or to contact this author, please use the forum below.