Some 400,000 individuals purchased long-term care insurance protection in 2008 according to a just-released report. The overwhelming majority (84%) of individual buyers in 2008 were younger than age 65 and three-fourths (76%) selected a more affordable approach to this protection by opting for coverage for a specific number of years.
The annual study conducted by the American Association for Long-Term Care Insurance, the industry's professional trade organization, analyzed data on 215,000 buyers of individual long-term care insurance protection. According to the organization's research, some 8.2 million Americans now have long-term care insurance protection purchased on an individual basis (typically through an insurance professional) or through a plan offered by their employer.
"Individuals continue to purchase protection at younger ages," explains Jesse Slome, the Association's Executive Director. In 2008, some 53% of individual buyers were between ages 55 and 64; compared to 50% the prior year. Another 24% were between ages 45 and 54 (2008). "The age of buyers keeps dropping as consumers -- especially baby boomers -- understand the cost-saving benefits of locking in good health discounts and ways to make protection more affordable," Slome explains. In 2000, the average age of an individual buying long-term care insurance was 67.
The number of individuals purchasing long-term care insurance protection for a specified number of years also increased according to the Association study. Just over three-fourths (76%) of buyers in 2008 opted for coverage for a claim lasting five years or less; a slight increase over the prior year (71%). "The most expensive long-term care insurance policy is one with an unlimited benefit period (one with no cap on the number of years benefits will be received)," Slome explains. "Consumers are right-sizing their protection taking into account available savings and retirement income. This cost-sharing approach can reduce the cost of protection by 30 percent or more."
Perhaps in recognition of cost-consciousness, consumers were fairly evenly spread in terms of the level of selected daily benefit. Just under one-third (31.5%) opted for a daily benefit between $100 and $149. "In current dollars, that amounts to between $36,500 and $54,385 in a yearly benefit," Slome notes. "But most policies offer an option so benefits keep pace with rising costs and 15 years from now, the value of the (higher) benefit would be $75,800 a year."
The complete findings of the study are published in the 2009 LTCi Sourcebook available from the American Association for Long-Term Care Insurance. For additional information, call the Association's offices at (818) 597-3227 or visit the organization's website: http://www.aaltci.org/.
Summarized Study Data
Age of Buyers (2008)
Under 45 7%
45 to 54 24%
55 to 64 53%
65 and Over 16%
Daily Benefit (2008)
Less than $100 6.5%
$100 to $149 31.5%
$150 to $199 35.0%
$200 and Over 27.0%
Benefit Period (2008)
2 Years 7%
3 Years 30%
5 Years 24%
Unlimited 13%
Premium Paid (2008)
Age Low High Average
35 - 44 $637 $2,830 $1,650
45 - 54 $1008 $6,440 $1,900
55 - 64 $844 $7,400 $2,150
65+ $1,883 N/A $3,350
Additional information can be found in the Association's Consumer Information Center.
Thứ Tư, 25 tháng 2, 2009
Thứ Tư, 4 tháng 2, 2009
Marketing Long-Term Care Insurance To Affinity Groups
Members of the American Association for Long-Term Care Insurance often submit questions via the organization's members only website. We solicit answers from leading industry experts and post them. I thought it would be valuable to post this one on our blog as well. As sales of long-term care insurance to associations and affinity groups grow, I believe you'll find this of value.
The American Association for Long-Term Care Insurance reached out to a leading national expert in the field, Joseph Pulitano of Advanced Resource Marketing, in Allston, MA.
The Question: I am agent of record for a large affinity group, and am debating whether to continue to use a mailback pro forma or to partner with an LTC specialty Managing General Agency (MGA). My question is, how many times more apps could I expect to receive by using the face to face process, vs the mailback process?
Joe Pulitano's reply: I don't have enough information on your group to give you a quantitative answer but I can certainly give some conceptual ones. In all of the associations and employer groups we market to we see participation rates much higher when the prospect is approached face to face with an agent.
The reasoning - Members/Employees have purchased life insurance and/or DI in the past and have perhaps purchased more than one policy. They tend to understand those products; the role they play in a person's overall financial plan and most people can adequately purchase them over the phone/mail/internet.
The people who have not purchased LTCi will hopefully only need to buy it once. For that to happen a well trained, competent agent who understands how to work affinity leads can guide a prospect through the role LTCi plays in a person's overall financial plan and help them purchase the right product at the right price.
Perhaps the best example of this is AARP. They have been offering LTCi to their membership for over 20 years strictly through over the phone and through the mail. Last year AARP contracted with a nationwide company of career agents to meet members at their homes and sell the product face to face. The results in most areas of the country have been phenomenal.
Yes, there are those prospects who do not want to sit with an agent and want to conduct business over the phone, internet, or through the mail, and as an MGA marketing to affinities we do accommodate those individuals with an on line education process and purchasing system.
When considering an LTCi MGA to handle your affinity there are several items you need to review:
1. What experience does the MGA have in affinity marketing?
2. Does the MGA have a regional of national base of agents who are experienced in working affinity leads?
3. What investment is the MGA willing to make to market to your affinity? Little or no investment means little or no leads.
4. Does the MGA have the ability to structure commissions to flow directly from the carrier to the affinity and the agent of record?
5. Does the MGA have an on line educational program Members can go to and get more information?
When an MGA is considering taking on this affinity project from you they may want to know:
1. What is the affinity between the association and the members?
2. Are other insurance products sold to affinity members?
3. What are the demographics of the affinity? There are some large affinities that will not be successful.
4. What is the retention rate of affinity members?
5. How long has LTCi been offered and what have the success rates been?
Affinity marketing of LTCi when marketed, sold, and administered correctly is a goldmine of opportunity.
Thanks Joe.
The Ask The Experts service is a benefit of membership in the American Association for Long-Term Care Insurance. To become a member, click here or type: www.aaltci.org/join into the address bar of your web browser.
The American Association for Long-Term Care Insurance reached out to a leading national expert in the field, Joseph Pulitano of Advanced Resource Marketing, in Allston, MA.
The Question: I am agent of record for a large affinity group, and am debating whether to continue to use a mailback pro forma or to partner with an LTC specialty Managing General Agency (MGA). My question is, how many times more apps could I expect to receive by using the face to face process, vs the mailback process?
Joe Pulitano's reply: I don't have enough information on your group to give you a quantitative answer but I can certainly give some conceptual ones. In all of the associations and employer groups we market to we see participation rates much higher when the prospect is approached face to face with an agent.
The reasoning - Members/Employees have purchased life insurance and/or DI in the past and have perhaps purchased more than one policy. They tend to understand those products; the role they play in a person's overall financial plan and most people can adequately purchase them over the phone/mail/internet.
The people who have not purchased LTCi will hopefully only need to buy it once. For that to happen a well trained, competent agent who understands how to work affinity leads can guide a prospect through the role LTCi plays in a person's overall financial plan and help them purchase the right product at the right price.
Perhaps the best example of this is AARP. They have been offering LTCi to their membership for over 20 years strictly through over the phone and through the mail. Last year AARP contracted with a nationwide company of career agents to meet members at their homes and sell the product face to face. The results in most areas of the country have been phenomenal.
Yes, there are those prospects who do not want to sit with an agent and want to conduct business over the phone, internet, or through the mail, and as an MGA marketing to affinities we do accommodate those individuals with an on line education process and purchasing system.
When considering an LTCi MGA to handle your affinity there are several items you need to review:
1. What experience does the MGA have in affinity marketing?
2. Does the MGA have a regional of national base of agents who are experienced in working affinity leads?
3. What investment is the MGA willing to make to market to your affinity? Little or no investment means little or no leads.
4. Does the MGA have the ability to structure commissions to flow directly from the carrier to the affinity and the agent of record?
5. Does the MGA have an on line educational program Members can go to and get more information?
When an MGA is considering taking on this affinity project from you they may want to know:
1. What is the affinity between the association and the members?
2. Are other insurance products sold to affinity members?
3. What are the demographics of the affinity? There are some large affinities that will not be successful.
4. What is the retention rate of affinity members?
5. How long has LTCi been offered and what have the success rates been?
Affinity marketing of LTCi when marketed, sold, and administered correctly is a goldmine of opportunity.
Thanks Joe.
The Ask The Experts service is a benefit of membership in the American Association for Long-Term Care Insurance. To become a member, click here or type: www.aaltci.org/join into the address bar of your web browser.
Thứ Năm, 29 tháng 1, 2009
Long-Term Care Insurance Producers Summit Planned
The American Association for Long-Term Care Insurance, the national professional organization, announced plans for the eighth National Long-Term Care Insurance Producers Summit.
The national conference which will focus on the marketing and selling of long-term care insurance as well as life insurance and annuity products that now offer long-term care benefits will be held November 15 and 16, 2009 at the Westin Crowne Center Hotel in Kansas City, MO.
The Summit is the premier long-term care insurance industry meeting for insurance and financial professionals who market long-term care solutions to individuals and the employer marketplace.
The Association is extending a special Pre-Early Registration offer--a $130 discount off the general registration fee of $325. In addition, for those who register before February 18th, the Association will provide two $25 credits toward room charges at the Westin in Kansas City. For details on this limited-time offer, contact Jesse Slome, Executive Director of the organization. Click here of call (818) 597-3227.
The national conference which will focus on the marketing and selling of long-term care insurance as well as life insurance and annuity products that now offer long-term care benefits will be held November 15 and 16, 2009 at the Westin Crowne Center Hotel in Kansas City, MO.
The Summit is the premier long-term care insurance industry meeting for insurance and financial professionals who market long-term care solutions to individuals and the employer marketplace.
The Association is extending a special Pre-Early Registration offer--a $130 discount off the general registration fee of $325. In addition, for those who register before February 18th, the Association will provide two $25 credits toward room charges at the Westin in Kansas City. For details on this limited-time offer, contact Jesse Slome, Executive Director of the organization. Click here of call (818) 597-3227.
Thứ Ba, 20 tháng 1, 2009
Long-Term Care Insurance: What Happens After They Buy
One of the most interesting aspects of my job is compiling the data for the annual Long-Term Care Insurance Sourcebook. This is a compilation of all the most relevant data we can compile ... acquire ... and share with members of the Association.
One of the questions I've been asked is "what happends after someone purchases long-term care insurance? How many people keep their policies? How many drop them? How many die?"
It is important information for several reasons. First, most people who purchase long-term care insurance understand the value of what they have purchased. Compared to other forms of insurance, fewer drop this protection that say life insurance or diability products. Thus, one can assure people who buy, they will likely have and keep this coverage should the need for benefits arise.
The 2009 Sourcebook will provide detailed (cumulative) data on what happens after people buy long-term care insurance protection. Here's what it will note based on data reported by the Indiana Partnership for Long-Term Care. Of some 43,475 policies purchased, some 8,086 have been dropped (35,412 are still in force).
The Indiana Partnership was implemented in 1993. Thus, in the 15 years since sales began, 82% of policies sold remain in-force.
Primary reasons for dropping the policies are:
Voluntary (2,016 or 25%)
Died (990 or 12.3%)
Unknown (2,543 or 31.5%)
Not Taken Up (2,381 or 29.5%)
Converted (78 or 1%)
A little tid bit worthy of including should you ever be asked the same question by a prospect or client.
For more information, visit the Association's Producer Resource Center where we will continually add new audios and information.
If you have suggestions for data you want included, send me an E-mail: Click Here.
One of the questions I've been asked is "what happends after someone purchases long-term care insurance? How many people keep their policies? How many drop them? How many die?"
It is important information for several reasons. First, most people who purchase long-term care insurance understand the value of what they have purchased. Compared to other forms of insurance, fewer drop this protection that say life insurance or diability products. Thus, one can assure people who buy, they will likely have and keep this coverage should the need for benefits arise.
The 2009 Sourcebook will provide detailed (cumulative) data on what happens after people buy long-term care insurance protection. Here's what it will note based on data reported by the Indiana Partnership for Long-Term Care. Of some 43,475 policies purchased, some 8,086 have been dropped (35,412 are still in force).
The Indiana Partnership was implemented in 1993. Thus, in the 15 years since sales began, 82% of policies sold remain in-force.
Primary reasons for dropping the policies are:
Voluntary (2,016 or 25%)
Died (990 or 12.3%)
Unknown (2,543 or 31.5%)
Not Taken Up (2,381 or 29.5%)
Converted (78 or 1%)
A little tid bit worthy of including should you ever be asked the same question by a prospect or client.
For more information, visit the Association's Producer Resource Center where we will continually add new audios and information.
If you have suggestions for data you want included, send me an E-mail: Click Here.
Thứ Tư, 7 tháng 1, 2009
Long Term Care Insurance Cost: What People Really Pay
How much did Americans pay for long-term care insurance in 2008? What the average age of buyers? At what ages did long-term care insurance policyholders begin their claims?
Each year the American Association for Long-Term Care Insurance publishes an annual industry Sourcebook that is packed with the best facts and figures we can obtain. Some comes from independent research conducted by the Association, others from studies. Here are some findings that will be included.
Let me begin with a stated opinion. I dislike industry averages. Reporters like them and they use them regularly. But, without context, averages are meaningless. If I told you you couldn't control the temperature of the water in your shower, but that the average would be a balmy 80 degrees ... how would you feel if one minute it was 100 and the next it was 60. You get the picture.
The very same is true when it comes to long-term care insurance. For years, articles and experts talk about the average amount people pay for long-term care insurance. But, half of those who buy pay less than the average (they didn't get inferior protection) ... and half paid more (they didn't get ripped off). Okay, for those addicted to statistics, the average paid for individual long-term care insurance in 2008 will likely be about $1,900. Hope you are happy.
But for those who really want a more relevant perspective, new data that is reported in the Association's 2009 LTC Insurance Sourcebook, sheds more meaningful light. The data breaks down the range of premiums paid into age bands, showing the high and the low amount paid, as well as the mean.
Here are the findings for select age bands (2008 annual premiums paid by buyers in New York State):
Between ages 45-49 the low was $1,008 and the high was $6,445
Between ages 50-54 the low was $989 and the high was $6,407
Between ages 55-59 the low was $844 and the high was $6,939
between ages 60-64 the low was $1,125 and the high was $7,413
Between ages 65-69 the low was $1,883 and the high was $9,496
All information published in the Sourcebook or on this blog may be utilized with credit to the American Association for Long-Term Care Insurance.
Each year the American Association for Long-Term Care Insurance publishes an annual industry Sourcebook that is packed with the best facts and figures we can obtain. Some comes from independent research conducted by the Association, others from studies. Here are some findings that will be included.
Let me begin with a stated opinion. I dislike industry averages. Reporters like them and they use them regularly. But, without context, averages are meaningless. If I told you you couldn't control the temperature of the water in your shower, but that the average would be a balmy 80 degrees ... how would you feel if one minute it was 100 and the next it was 60. You get the picture.
The very same is true when it comes to long-term care insurance. For years, articles and experts talk about the average amount people pay for long-term care insurance. But, half of those who buy pay less than the average (they didn't get inferior protection) ... and half paid more (they didn't get ripped off). Okay, for those addicted to statistics, the average paid for individual long-term care insurance in 2008 will likely be about $1,900. Hope you are happy.
But for those who really want a more relevant perspective, new data that is reported in the Association's 2009 LTC Insurance Sourcebook, sheds more meaningful light. The data breaks down the range of premiums paid into age bands, showing the high and the low amount paid, as well as the mean.
Here are the findings for select age bands (2008 annual premiums paid by buyers in New York State):
Between ages 45-49 the low was $1,008 and the high was $6,445
Between ages 50-54 the low was $989 and the high was $6,407
Between ages 55-59 the low was $844 and the high was $6,939
between ages 60-64 the low was $1,125 and the high was $7,413
Between ages 65-69 the low was $1,883 and the high was $9,496
All information published in the Sourcebook or on this blog may be utilized with credit to the American Association for Long-Term Care Insurance.
Thứ Ba, 6 tháng 1, 2009
Court Approves Order to Protect Penn Treaty Policyholders
January 6, 2009: Pennsylvania Insurance Commissioner Joel Ario announced today that the Commonwealth Court approved his petition for an Order of Rehabilitation for Penn Treaty Network America Insurance Co. and its subsidiary, American Network Insurance Co.
The order places the company under the statutory control of the Pennsylvania Insurance Department. It also grants the commissioner direct authority to preserve the company's assets and oversee its current financial situation and operations, while continuing to pay policyholder claims.
"It is the Insurance Department's responsibility to take action when a company is in financially hazardous condition," Ario said. "Placing Penn Treaty into rehabilitation will make certain that long-term care policyholder claims are paid, helping to ensure continuity of care for a community in need. "We gave Penn Treaty time to find a buyer and infuse new capital. To date, the company has been unable to raise enough capital, so we must protect the company's assets and put policyholder protections into place. I want to assure policyholders that their policies remain in effect during this rehabilitation and that their premiums should continue to be paid in order for coverage to remain in place."
This rehabilitation is the first receivership action the department has taken in more than four years. Penn Treaty, headquartered in Allentown, provides long-term care insurance to more than 126,000 policyholders. Together, Penn Treaty Network America Insurance Co. and its subsidiary, American Network Insurance Co., write long-term care insurance in all 50 states and the District of Columbia.
The Insurance Department will perform an independent, comprehensive evaluation of the company's finances. Based upon this review and analysis, the department then will determine the viability of a rehabilitation plan. Any plan will give payment priority to policyholder claims.
Policyholders and other interested parties will receive further information about the rehabilitation in the future. In the interim, policyholders with questions on claims or non-claim matters may use the following toll-free number: 800-362-0700, ext. 3190.
Media interested in discussing consumer protections for those purchasing long-term care insurance, can contact Jesse Slome, Executive Director of the American Association for Long-Term Care Insurance. Call 818-597-3227 or E-mail: Jesse Slome
The order places the company under the statutory control of the Pennsylvania Insurance Department. It also grants the commissioner direct authority to preserve the company's assets and oversee its current financial situation and operations, while continuing to pay policyholder claims.
"It is the Insurance Department's responsibility to take action when a company is in financially hazardous condition," Ario said. "Placing Penn Treaty into rehabilitation will make certain that long-term care policyholder claims are paid, helping to ensure continuity of care for a community in need. "We gave Penn Treaty time to find a buyer and infuse new capital. To date, the company has been unable to raise enough capital, so we must protect the company's assets and put policyholder protections into place. I want to assure policyholders that their policies remain in effect during this rehabilitation and that their premiums should continue to be paid in order for coverage to remain in place."
This rehabilitation is the first receivership action the department has taken in more than four years. Penn Treaty, headquartered in Allentown, provides long-term care insurance to more than 126,000 policyholders. Together, Penn Treaty Network America Insurance Co. and its subsidiary, American Network Insurance Co., write long-term care insurance in all 50 states and the District of Columbia.
The Insurance Department will perform an independent, comprehensive evaluation of the company's finances. Based upon this review and analysis, the department then will determine the viability of a rehabilitation plan. Any plan will give payment priority to policyholder claims.
Policyholders and other interested parties will receive further information about the rehabilitation in the future. In the interim, policyholders with questions on claims or non-claim matters may use the following toll-free number: 800-362-0700, ext. 3190.
Media interested in discussing consumer protections for those purchasing long-term care insurance, can contact Jesse Slome, Executive Director of the American Association for Long-Term Care Insurance. Call 818-597-3227 or E-mail: Jesse Slome
Thứ Hai, 5 tháng 1, 2009
Long-Term Care Insurance Partnership Protection - What Most People Overlook
To prepare the 2009 Long-Term Care Insurance Sourcebook, which will be sent to all Association members in March, I take the time to review countless studies and reports.
One of the more interesting was published recently by the California Partnership for Long-Term Care. One of the requirements imposed on the initial four Partnership states (California, New York, Indiana and Connecticut) was the preparation of very detailed reports on buyers as well as utilization of policies. Thus, these provide some of the best snapshots of real situations ... what consumers choose and how they use benefits when needed.
I was involved with the launch of the California Partnership and I think many people either overlook or are not familiar with why the Partnership concept came about ... and why it is such a powerful solution for consumers. Bottom line: it is designed to help expand the market to "middle income" consumers who could afford shorter-duration policies with the added protection of being able to qualify for Medicaid while protecting a larger sum of assets from the spend-down requirement.
So, some of the interesting findings from the California report. Some 142,650 applications were initially submitted of which 118,390 resulted in issued policies (some 98,528 are currently active). To date, 2,082 policyholders have qualified to receive benefit payments ... and the total asset protection earned by policyholders who received benefits was $75,367,500 (which means the average payout was $36,199).
Some 187 policyholders exhuasted their benefits (722 died while in benefit) and of these 44 accessed Medicaid (Medi-Cal in California).
There is excellent data that looks at the duration of policy benefits by the people who exhausted their policy and then accessed Medi-Cal. We'll publish that and discuss it more.
But the bottomline message for those marketing Partnership protection, this is excellent coverage for those seeking more affordable plans of protection.
One of the more interesting was published recently by the California Partnership for Long-Term Care. One of the requirements imposed on the initial four Partnership states (California, New York, Indiana and Connecticut) was the preparation of very detailed reports on buyers as well as utilization of policies. Thus, these provide some of the best snapshots of real situations ... what consumers choose and how they use benefits when needed.
I was involved with the launch of the California Partnership and I think many people either overlook or are not familiar with why the Partnership concept came about ... and why it is such a powerful solution for consumers. Bottom line: it is designed to help expand the market to "middle income" consumers who could afford shorter-duration policies with the added protection of being able to qualify for Medicaid while protecting a larger sum of assets from the spend-down requirement.
So, some of the interesting findings from the California report. Some 142,650 applications were initially submitted of which 118,390 resulted in issued policies (some 98,528 are currently active). To date, 2,082 policyholders have qualified to receive benefit payments ... and the total asset protection earned by policyholders who received benefits was $75,367,500 (which means the average payout was $36,199).
Some 187 policyholders exhuasted their benefits (722 died while in benefit) and of these 44 accessed Medicaid (Medi-Cal in California).
There is excellent data that looks at the duration of policy benefits by the people who exhausted their policy and then accessed Medi-Cal. We'll publish that and discuss it more.
But the bottomline message for those marketing Partnership protection, this is excellent coverage for those seeking more affordable plans of protection.
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