2013 Long Term Care Insurance Sales Trends Interpreted

Simplistic reports of data regarding long term care insurance policy sales result in a misunderstanding of market trends says the director of the American Association for Long-Term Care Insurance.

“During the first half of 2013, nearly 100,000 individuals purchased traditional long term care insurance policies and tens of thousands purchased life insurance and annuity products that provide long term care benefits,” declares Jesse Slome, executive director of the national long term care insurance industry trade group.  Slome was responding to questions by executives who market long term care insurance following a report that industry sales had declined 20 percent during the second quarter of 2013.

“Several long term care insurance carriers are reporting sales increases of 20 percent or more, and no one cites that,” Slome shared with the group.  “Others experienced sales growth of between 10 and 20 percent.  Overall sales were down due to several factors that impacted the first half of the year.”  Among those, Slome noted the failure of California’s Department of Insurance to approve newer policy filings had impacted sales.  “When the largest state in the nation has few options available, sales are going to be impacted.”

The national long term care insurance expert pointed to the continuing trend among insurance companies to be more selective in terms of accepting applicants.  “The knowledge gained over the past 20 years helps insurers understand long term health risks and to keep policy costs as low as possible which is what consumers want.  As a result, they will reject more applicants with existing health issues,” Slome explains.  “That reduces the number of overall policies sold.”

“Long term care is a universal issue facing Americans who are now living longer lives than ever but long term care insurance is not the universal solution,” Slome stated to the executives.  “There is a very defined market for this product but that is limited to those who can afford the premiums as well as meet the health qualifications when they apply.”

“Those who advocate a new national long term care insurance program as part of Medicare have yet to make a proposal that has any semblance of reality,” Slome concluded.  “We don’t see the American public or politicians for that matter ready at this point to add a new health care-related mandate or increase taxes, which leave families only three options; turn family members into caregivers, pay for care or have insurance to pay some of the cost of care.”

Long Term Care Insurance Money Back Provisions Available

For consumers concerned that they won’t use the long term care insurance policy they’ve paid for selecting a money back option can be attractive reports the American Association for Long-Term Care Insurance.

“Long term care Insurance is the only form of insurance protection where consumers seem concerned about not having a claim,” declares Jesse Slome, executive director of the national long term care insurance industry trade group.  “I’ve never met anyone who regretted their house not burning down or avoiding a major car accident because it meant they wasted their home or car insurance payments.”

Slome notes that when it comes to long term care insurance costs people seem to have a mindset that they’ve wasted dollars if they never have a claim.  “Of course, ask them if they’d really like to have a stroke or be diagnosed with Alzheimer’s and the answer is never, but even that does not overcome this mental block that continues to exist in many,” Slome points out.

The Association director explained that policies offer an option that will return premium dollars paid.  “The return of premium option does exactly what it says,” Slome acknowledged.  “It returns premiums, typically less any claims costs but the policy provisions can vary from one insurer to the next.”  The Association analysis of costs for good coverage for a 55-year-old couple found that the option added roughly 62 percent to the cost of coverage.

“You can have the don’t lose it if you don’t use it option,” Slome explained with a traditional long term care insurance policy.  He notes that few people end up selecting the option.   “Often there’s one spouse, typically the husband who is adamant that he’ll never need care and that insurance is a waste of money,” Slome says.  “In those situations, the return of premium option is a way to take that objection off the table.”

Long Term Care Insurance Not Covered By Obamacare Provisions

Long term care insurance is not included under provisions passed by Congress as part of the Affordable Care Act also known as Obamacare.

“We are getting an increasing number of calls from consumers wanting to know how to apply for long term care insurance once insurers must accept pre-existing health conditions,” explains Jesse Slome, executive director of the long term care insurance industry trade group.  “Unfortunately I have to tell them long term care insurance is not included under Obamacare and is only available to those who can meet health requirements.”

Consumers are expected to start investigating insurance plans available under Obamacare next month and open enrollment starts October 1st.

“The Department of Health and Human Services abandoned any plans to implement the provision calling for a voluntary long term care insurance program which would have allowed those with existing health insurance to apply,” Slome notes.  “They found the monthly premiums they’d have to charge would have been far too expensive for people to afford so they walked away and allowed Congress to repeal the CLASS Act.”

“There are about a dozen insurance companies currently offering private long term care insurance,” says Slome.  About eight million Americans have some form of protection against the significant risk of needing long term care.  “If you have some existing health conditions, we can advise whether pursuing a long term care insurance policy will even be possible.”
The American Association for Long-Term Care Insurance advocates for the importance of long term care planning and supports insurance professionals who market the complete range of planning products.

Life Insurance With Long Term Care Insurance Benefits Studied

Universal life insurance policies with optional long term care insurance are gaining consumer interest according to new research by the American Association for Long-Term Care Insurance.

“We are definitely seeing heightened interest among consumers with available savings that they can leverage to protect against the high costs associated with needing long term care,” explained Jesse Slome, executive Director of the American Association for Long Term Care Insurance. “These policies are not for everyone and there can be significant differences between policies being offered today.”

According to a study by the Association more than half of buyers of life insurance with long term care benefit option policies were under age 65. “Some companies have imposed age restrictions on these policies and that could be pushing down the age of average buyers,” Slome explained. “It’s also likely that more stockbrokers and financial planners are starting to recommend these products to their younger clientele.”

A growing number of companies now offer life insurance policies that offer long term care benefits according to AALTCI. “You used to have one or two major players but over the past few years several large insurance companies have introduced new products,” Slome noted. “Consumers have the misperception that all policies are identical but we see some important differences that can vary. The difference in future benefits can be quite significant.”

The AALTCI study reports that 56 percent of buyers in 2012 were age 64 or less.