Long Term Care Insurance:
Responsive to Consumer Needs
“Since its inception in the eighties, long term care insurance has changed dramatically to meet the needs of the customer. These changes have taken the product from a critic’s target to a personal finance expert’s pick.
“The benefits and peace of mind offered by long term care insurance make it a strong relationship-building product. Given the aging population, growing need, increased awareness, industry consolidation, and product improvements, this market is poised for tremendous growth.
“There has never been a better time to take another look at long term care insurance and decide whether it is something you would like.
Aging Demographics and Growing Need
“People age 65 face at least a 40 percent lifetime risk of entering a nursing home, and about ten percent will stay there five years or longer. Nearly three quarters of those 65 and older will need home health care. It is estimated that a total of 26 million people age 70 and over will need long term care by 2050.
“Today, nursing home care averages $61,000 annually, and home care can cost $37 an hour if provided by an LPN, and the figures will only go up. And yet, less than ten percent of people over 65 have long term care insurance. Many people believe that Medicare and Social Security will help, but neither program was designed to cover long term care expenses. The fact is that many people could spend their life savings trying to pay for long term care if they don’t plan for the potential risk.
“Long term care insurance can provide a quality of life for consumers, allowing them peace of mind while they’re healthy and more choices for care when they need it. It can also be a source of comfort to know that one’s children will not have to carry the full burden of care.
Increased Awareness and Industry Consolidation
“The largest long term care insurance program ever has recently been launched and is being marketed by the federal government to 20 million employees, retirees, and other family members. This long term care insurance campaign, unprecedented in size and scope, will raise awareness of the potential need for long term care and the solution insurance offers.
“By offering long term care insurance as a benefit to its employees, the federal government is encouraging Americans to take personal responsibility and suggests that purchasing long term care insurance is an attractive option.
“Although financial advisors will not be selling the federal plan, they will play a valuable role in helping individuals consider their options.
“As the long term care insurance industry matures, long term care insurance lines have grown, merged, been acquired, or exited the business. As the dust settles, we expect the industry to become dominated by larger carriers. The financial strength of these players should lend stability to pricing, which will be helpful to the business as a whole.