The horizon for the long term care insurance industry looks brighter now, with sales showing modest growth in 2007 after four years of discouraging results (see chart). However, its future is still uncertain. This is like sitting on the tarmac, waiting for the right conditions, and being fairly sure, but not certain, that take-off will eventually occur.
Where LTC insurance is concerned, the question is will it ever be embraced by Americans to the degree of other long-established financial products?
Legislative changes in the form of the Deficit Reduction Act of 2005 and the Pension Protection Act of 2006 provide incentives for purchasing LTC insurance–an unequivocal message that the government expects individuals to take on greater responsibility for funding their LTC.
Sales volume, however, suggests that Americans are not getting the message or, more likely, are reluctant to act on it.
American consumers are still deeply immersed in ignorance, apathy and denial when it comes to planning for potential LTC expenses, according to LIMRA research. Consumer resistance is further fueled by the price and complexity of LTC insurance, providing nonbuyers with justification for dismissing the insurance.
So what can be done to move more Americans to insure for this risk?
Legislation and industrywide efforts to encourage LTC planning and to create more positive messaging around the LTC insurance product and industry are steps in the right direction. Whether consumers are simply in denial or too busy dealing with today's concerns, it is imperative that the industry keep attention focused on consumers' need to protect for LTC risk.
The government needs do its part too by repeating the message loud and clear that this responsibility is the individual's.
Ultimately, the LTC insurance sale is made at the kitchen table. Consumers want and need to speak face-to-face with a knowledgeable intermediary. Therefore, producer training is essential. For a while, producers have expressed discomfort that the LTC insurance product is like no other. While LTC specialists are well-equipped to sell, the mass of producers are not, and they seem to have become less interested in doing so. This means carriers must engage new individuals to sell LTC insurance and provide them with the product knowledge and sales skills to realize success.
