Consumers Still Want Long-Term Care Insurance
About 24% of high-income consumers surveyed said they’re very likely to buy the product.
U.S. insurers may be leery about writing new long-term care insurance policies, but many consumers are eager to buy coverage.
About 63% of the middle-income consumers who participated in a recent Certification for Long-Term Care survey said they were interested in buying long-term care insurance. Sixteen percent said they were very likely to buy coverage, and 29% said their most likely planning strategy would be to talk to a financial planner or insurance agent about long-term care planning.
Only 61% of the upper-income participants were interested in buying LTCI coverage, but 24% indicated that they were very likely to buy coverage and 25% said their most likely planning strategy was to talk a long-term care planner.
What it means: Both upper- and middle-income consumers are thinking hard about the cost of long-term care.
Eileen Tell, the CEO of ET Consulting, one of the firms that managed the survey, said she thinks the results show long-term care planners need to work harder to reach middle-income consumers.
“Across all incomes, consumers need a plan for long-term care,” Tell said.
The survey: Certification for Long-Term Care — the Durham, North Carolina-based manager of the CLTC professional designation program — commissioned the survey.
Genworth’s CareScout business was a survey sponsor.
ET Consulting worked on the survey with Oliver Wyman, a consulting firm.
The survey team plans to present the survey results this week at a CLTC meeting in Charlotte, North Carolina.
The survey team used an online system to reach 1,050 U.S. residents ages 35 through 74. They classified participants with income of about 67% of the median for their age group to 200% of the median as middle income and participants with income over 200% of the median as upper income.
The current median household income for Americans of all ages is about $80,000.
The survey team focused mainly on the middle- and upper-income participants’ thoughts about long-term care.
LTCI options: Only about 7.5 million Americans have private long-term care insurance, according to the Congressional Research Service. Some long-term care planning experts have suggested that the products now available may be a poor fit for consumers’ needs.
The CLTC survey team tried addressing that controversy by presenting descriptions of seven long-term care product prototypes to the survey participants.
The team asked participants which prototypes appealed to them and which one they liked best.
The most popular long-term care insurance option was the one most like the ordinary long-term care insurance policies available today: a policy with a 20% co-payment, to help hold the premiums down.
About 26% of the upper-income participants and 28% of the middle-income participants said they liked that prototype the best.
Survey participants also liked the idea of the government creating a universal support program for people who need care for more than two years.
The least popular options were short-term care insurance and family caregiver support services coverage.
A short-term care insurance policy pays for nursing home care or home care for up to a year.
A services-only policy would pay only for the equipment, transportation services, respite services and other services that a family caregiver might need to provide care for a loved one.
Fewer than 10% of the participants in either the upper-income or middle-income groups said they preferred the short-term care insurance or services-only prototypes.
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