Use it or loose it . We consistently hear that consumers don’t buy because they’re afraid of not using enough or any of the benefits to make purchasing it worthwhile. Insurers have found ways for policies to provide more benefits and make customers feel comfortable that they are getting a good value.
1. Offering riders that return some portion of the premiums should a policy lapse and without any benefits being paid out. However, such riders have not been well received due to the perceived high cost.
2. Allowing a couple to share a pool of benefits. While carriers have linked couples’ policies in different ways, allowing either person to tap benefits, statistics show the probability that one of the two needing care is significantly greater than one person alone needing care.
3. Expanding the shared benefit idea, which also increases the potential usage of benefits, by broadening the definition of “couple”. It now extends the benefits beyond traditional married couples to: policyholders who have lived with a family member of the same generation (sibling or cousin) for at least five years, or have lived with a same-sex or different-sex partner for at least five years.
4. Allowing different family members to take care of each other by sharing their pool of coverage with other members of the family helps ensure a family gets the right care. This is particularly true for boomers more concerned about their parents getting appropriate care than themselves. A family pool also fosters discussion on the subject since all members are covered; as well, the family pool allows parents to leave unused coverage to their children covered under the policy.
5. Developing hybrid products that combine life insurance and long term care insurance or an annuity and long term care. Very often, these benefits serve multiple needs at different life stages. While these products are not technically long term care policies, they are an example of how the industry is responding to consumer concerns. We’ve also witnessed a huge diversity of preferences resulting from personal experiences, beliefs, and family situations. Most products today offer the ultimate in flexibility by providing a range of options that enable consumers to create plans that meet specific needs. As an example, some customers are less concerned about being covered for the first year or so because they can self-insure for that period of time. They are more concerned about living too long and needing long term care for a protracted period of time. To address this need, policies are available that offer a 365 day elimination period combined with a lifetime benefit policy.
” While the industry has improved policies to address the concerns of consumers, there is work to be done in the future.
” Cover the less healthy population .
Uninsurable individuals are often frustrated to find they can not buy a policy. While expanding risk classes has now increased the possibility of coverage, those whom carriers can’t insure might be interested in a different type of product.
“Insurers have begun to serve this population with service packages. Some of these service packages provide care management, provider discounts, and information and referral services. Without affecting the pricing of a carrier’s insured pool, the carrier can still provide value.