Q: With the recent carrier news–rate increases and companies withdrawing from the long-term care insurance market–I'm getting questions about industry stability. What do I say to reassure everybody that LTC is a necessary purchase and the industry is not falling apart?
A: Let's start with some logical thinking. When I started selling LTCI in 1990, many, many carriers had products. I realized, ultimately, the number of companies offering this product would decrease, and rate increases were inevitable. I told my clients–and trained my agents–to expect rate increases.
If they're going to hold a policy for 20, 30 even 40 years, then premiums are going to increase. Bottom line: What's happening in our industry isn't a surprise. Other reasons for this "perfect storm" include rate stability legislation, higher utilization, high persistency, longevity and low-interest rates.
What can you tell your clients to reassure them? Here are suggestions from some LTCI experts.
"The recent actions prove one thing. This coverage is important and necessary as evidenced by the fact that more people are using it for longer periods of time than originally projected. Future products are likely to be more restrictive in order to properly manage the risk. The action of these experienced carriers is driven by more people needing care. The risk isn't going to go away; in fact, it's just going to grow. Taking responsibility for planning for your care while you're healthy enough to qualify makes more sense than ever."
~ Mark Goldberg,
ACSIA Long Term Care
