Yes, you will have a job in
LTC insurance tomorrow, if…
By Linda Koco, MBA, CSA
Senior Editor, Products and Managing Editor, e-Publications
National Underwriter Life & Health
Lakewood, Oh
lkoco@nuco.com
Where this is going
Review the mixed messages
Consider the reality
Explore the possibilities
Working proviso
You can‘t trust dogs to watch your food.
You‘re in the spotlight
Newspaper eyes LTC claim complaint, 3/26/07
LTC brokers react to times article, 3/28/2007
Times article on claims denials shakes up LTC meeting
attendees, 4/2/2007
Regulators defend record on LTC oversight, 4/9/2007
Obama enters LTC fray, 4/6/2007
Why LTC producers don‘t produce, 4/9/2007
LTC Partnership course to begin certifying agents,
4/10/2007
Source: Headlines from National Underwriter Life & Health, 2007
Group think: the nay-sayers
Price, price, price – and re-price
Baby boomer self-indulgence
Tighter underwriting/claims in the way
Low public awareness--unlike auto, health ins.
Public uninformed about care costs—nh, hc, etc.
Govt. entitlement progs (Medicaid) undermine it
Fewer agents—and carriers—sell LTC
Inconsistent, insufficient promotion
Nay-sayers, continued
Negative reports in the general media
Future LTC claims will kill us—persistency hurts
Consumer procrastination, apathy
Complicated
Confusing
It‘s only a niche product
No above-the-line tax deduction
Consumer misconceptions -- ―Medicaid
planning rocks‖ ―will pay my own way‖ ―won‘t
happen to me‖ ―my spouse and kids are saints‖
Group think: the yay-sayers
PPA ‘06 (LTC riders on annuities, life ins.)
DRA ‘05 (Medicaid asset transfer, Partnerships)
Governor‘s letters PR, ‗LTC Awareness Day‘
More favorable press emerging
Company consolidation is over
Mature product lines –TQ-LTCs, simplicity rising
More stable pricing (certified rates)
Affordable for 30-50-year-olds = target market
Yay-sayers, cont‘d
Experience—claims, underwriting, advisors
Education, designation programs galore
It‘s on annual tax organizers and programs
Clear and present need/demand (aging pop.)
Good for most, even the wealthy
Motivation follows ―parent-care nightmare‖
Medical advances  people healthy longer
Medicare won‘t do it—neither will the ―saints‖
The statistical picture
Revenues off 8%-15%, individual/group
New contracts/certificates off 10%-20%
(individual/group)
But total premium = nearly $8B individual
and over $1B group.
Macro issues
(not LTC specific)
Federal charter v. NAIC/States
Rising activity of ‗non-insurance‘ regulators
Tech systems—promises v. reality
Boomer ‗retirement‘—what will it be?
Sales in alternate channels (banks,
wirehouses, brokerage, etc.)
Who is right?
Let‘s find out (groups decide)
What readers are saying
Which factors are most important to agents in
choosing an LTC carrier to represent--price,
service, products? (February 2006)
77% answered all three equally
Rank the importance of the insurer's financial
strength ratings in successful completion of a
LTC insurance sale (Oct 2005)
54% said extremely important and 35% said very important
Tend the soil
Cultivate connections
Note temperature--home care, telemed,
RX-care, benefits, law
Alternate fields, crops
Plan for bad weather
Johnnie Appleseed – ‗long-term‘ for LTC
Impact of HSAs
The Tax Relief and Health Care Act of 2006
(H.R. 6111) --> higher contribution limits,
indexed to inflation
Yes, HSA money can be used to pay for TQLTC premiums (see IRS Pub 502 for the
amounts deductible by age).
Listen to some agents
Source: E-mail survey of 664 health insurance agents, February 8, 2007, by
National Underwriter Life & Health and National Association of Health Underwriters
What else agents want to know
Source: E-mail survey of 664 health insurance agents, February 8, 2007, by National
Underwriter Life & Health and National Association of Health Underwriters
Consumer money thoughts
Source: March 2006 telephone survey of over 800 consumers having $100,000 or more in
household assets excluding home and real estate, conducted for New York Life by Mathew
Greenwald & Associates, Inc., Washington, D.C. Nearly 500 were pre-retirees..
Younger worker aspect?
Disabled American workers +35% since
2000. (Social Security Administration).
Nearly 60% haven't discussed how to
manage income-limiting disability.
Almost half haven't thought about need to
plan for financial impact of such an event.
Source: Research by Council for Disability Awareness, Portland, Maine,
as cited in NU Online News Service, Mar. 7, 2007
Prognostications
Our question: If access to Medicaid is curtailed as per
the proposed Deficit Reduction bill, what would be the
impact on LTC insurance sales in the next 3 years? (LTC eWire reader poll, February 2006)
Our readers said:
And this
Our question was: Would greater availability of hybrid
contracts--such as life insurance with accelerated
benefits for LTC--spark more LTC sales? (LTC e-Wire
reader poll, June 2006)
Our readers said:
And this
Our question: How would increasing the number
of states with LTC Partnership programs impact
LTC insurance sales? (LTC e-Wire reader poll, July 2006)
Our readers said:
Up 20%+
40%
Up 10% to 19%
35%
Nominal increase only
17%
Don't know or not sure
4%
Little or no impact
2%
Prediction
U.S. households owning LTC insurance will rise
to 18% from 16.5% in the next 5 years--even
higher in mass affluent* and boomer/senior
markets.
--Claritas, San Diego media company, based on May 2006 analysis of the
Claritas Insurance CLOUT database
*$500,000 - $1 million in income producing assets
The big ―if‖
Commitment
Top-down
Strategic alliances—for you, agents, cos.
Target your own market
Promotion -- marketing/advertising rocks
Reach and support the agents
Where is the LTC industry
ombudsman?
For information
For clarification
For testimony
For industry image
For call to action
Stay with it
If opportunity doesn‘t
knock, build a door
Or a light bulb, as
Thomas Edison did.
―I never failed once. I
invented the light bulb.
It just happened to be
a 2,000-step process.‖