Honey’s State of the LTCi Industry

I’ve just returned from the Society of Actuaries 16th annual Intercompany Long-Term Care Insurance Conference a few days ago.

I believe most attendees left the conference feeling more enthused about the future of long-term care insurance (LTCi) than we have in a while.

New carriers are entering the market. I got to preview National Guardian Life’s new LTCi policy, due for release this Spring. I am told its rates will be competitive and it will have some “sweet spots.” It’s an exciting plan and has some innovative, very attractive “spins” on traditional features.

Additional new products are entering the market, too!

My sentiment, and I believe that of the majority of attendees, is that the worst is over. Interest rate assumptions can’t be lower. Lapse rates, mortality and morbidity (how many policyholders will die or need LTC) have already been adjusted for “worst case,” hyper-conservative scenarios.

Long-term studies based on extensive experience & appropriate adjustments have convinced actuaries that the current generation of LTCi products are and will be very rate-stable.

The new, asset-based (also called “hybrid” or “combo”) LTC products are now mature, excellent products.

We now have a broader portfolio of rate-stable LTC solutions, reasonably priced, than ever before.

The press, this past year, has done excellent reporting on why Medicare and Medicaid cannot and will not pay for our LTC. Media has reported well on the high odds of needing LTC and the heartbreak patients and families often suffer due to unplanned LTC needs.

Demographically, there remains a huge, underserved market of Boomers and others who are unprepared and vulnerable to the “spending shock” of having an unplanned LTC need.

Some things have not changed in the 25+ years I’ve been working with LTCi. The public is still steeped in profound denial about their need for LTC. People would rather pay for fun things like travel and other toys than face the facts about needing LTC. There are still misinformed journalists who describe LTCi coverage erroneously, and inaccurately harp on wanton LTC rate hikes.