2018 Update: I’m happy to report that the LTC Insurance industry is alive and quite healthy! The reason is, quite simply, our nation’s need for long term care insurance coverage continues to escalate. Unfortunately, our senior population continues to be increasingly unprepared.
In August, I attended the annual conference of the Long Term Care Producers Group (LTCPG). This is one of the highlights of my year, as I get to reconnect with “my tribe” and also hear insights from some extremely knowledgeable professionals in the LTCi industry. These updates help me stay informed on changes and projected trends so that I can best serve you, my clients. These sessions also provide us important information on products:
- What’s most popular among current policyholders
- What’s most needed to best serve the future needs of our aging population
- How the public’s perception of LTCi has shifted over the last year
The LTC Insurance Industry
I began my career in the LTCi industry about 30 years ago. At that time the only “arrow in our quiver” was traditional LTCi. Although we had many more traditional LTCi carriers to choose from back then, the remaining options have withstood the tests of time. They have survived the uncertainty of the financial markets, since long term projections are very dependent on fluctuations in interest rates.
There’s also the ongoing challenge of resistance. Much of the media resists taking the time to gain a complete understanding of how LTCi products work. When the public reads this misinformation, they feel justified in their decision to postpone or even ignore this important financial crossroad that almost certainly lies in their future. Let’s face it, talking about the possibility of future medical care and planning for those needs can be unpleasant. Especially when trying to look down the road, so many years into the future.
New Needs Bring New Solutions
The good news is that we now have a much broader portfolio of new LTC solutions to offer clients who are prepared to plan for their future. Not only do these products better serve the needs of policyholders, but they have resulted in more robust sales, enhancing the long term financial health of the insurance carriers.
The most popular new products are called asset-based LTC plans. You’ll also hear them referred to as “hybrid”, or “combo” LTC plans. They are very popular, as seen by the brisk sales of these plans. These policies are part-LTCi and part life insurance. They provide robust long-term care protection.
Here’s one of many posts I’ve shared in the past on hybrid, asset-based policies. In the post, I share a link to an article in Forbes, providing a deeper dive into these plans. Depending on the client’s needs and resources, this can be an excellent solution. Having this alternative available widens the options for long term planning.
Short-Term Care (STC)
We also have STC (Short-Term Care) policies which did not exist just a few years ago. These are very reasonable plans, generally for people who do not qualify for traditional LTC or asset-based LTC policies.
There are unique, new Annuities available, with unusual qualification standards. Typically, a potential policyholder in good health is the ideal purchaser of LTC coverage. Qualifying for these annuities is based on one’s poor health, not one’s good health. They are for who already need the long term care. The policies can ensure that families will never run out of money while providing the necessary medical care for loved ones.
Life Settlements also provide a great alternative to families seeking access to cash flow. Many seniors already owns a life insurance policy they no longer need. Should their medical needs unexpectedly escalate, they may suddenly have an increased need for LTC. Thanks to the Life Settlements, people can get immediate cash from their life insurance policy, resulting in adequate funds to pay for their long term care needs.
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