We can all certainly agree that the LTC market has seen its growing pains and has a much different look today versus the past, but I don’t believe the sky is falling.
Even with all the market changes, the constant in the equation is people are living longer, care is more likely, the cost is continuing to increase, and there are limited options to pay for that care.
For that reason, there has never been a more opportune time to offer LTC coverage. There are more solutions than ever before for advisors to offer to clients, and consumers can feel more confident in the pricing of traditional products.
Traditional LTC carriers are developing new products to reach deeper into the middle market, there are more Hybrid Life and Annuity products in just the last five years, and almost every life carrier offers an LTC or Chronic Illness accelerated rider.
Traditional premiums are certainly more expensive, but with that comes more stable premiums which eases one of consumers’ biggest concerns… are premiums going to increase 50% or more? With today’s pricing assumption, that’s less likely to occur. We can point to numerous articles and studies by the Society of Actuaries to substantiate this statement.
Will the client need to assume more risk to help manage the premiums? Yes, but like any insurance, it is a risk-management proposition. What other insurance does the everyday consumer have that covers 100% of the risk and has an inexpensive premium associated with it?
Our goal is to do a better job educating agents about identifying client opportunities and teaching consumers the importance of planning for this type of risk, and we’ll continue to do that.
— Mike Baker, LTC Manager