From an observer’s perspective, the gloomy headlines about long-term care insurance (LTCI) — particularly from news stories focused on issuers’ efforts to get approvals for rate increases for those holding in-force LTCI policies — suggest a reason for concern.
But ask the agents who offer protection against long-term care risk, and they would likely say that they have a positive market outlook.
In a recent survey of LTCI agents conducted by the American Association for Long-Term Care Insurance (AALTCI), 47.6% of participants reported that they expect their own sales of new, traditional LTCI policies to rise this year; in contrast, just 20.8% forecast a decrease in their sales of such products.
Shift the spotlight to hybrid products, which combine LTCI benefits with life insurance policies or annuities, and the outlook is even better. Around 66% of participating agents said they expect increased sales for LTC hybrid products, with just 7.2% expecting a fall in sales of those products.
“Overall, there was great optimism for the future of the industry and their own personal sales,” said Jesse Slome, director of AALTCI.
Asking participants about their outlook further into the future, 43.1% of the respondents said that they expect sales of both traditional and linked-benefit policies to be higher in 2024 than they are today, while just 6.6% expected lower sales for both. A 7.5% minority, meanwhile, expressed expectations that traditional long-term care insurance products would no longer be sold, and all sales would focus on linked-benefit long-term care offerings.
Based on figures from LIMRA, the market for life combination LTC protection now consists of US$4 billion on annual premiums and more than 260,000 policies sold in the US. That accounts for 80% of the overall market for individual LTC solutions.
The increased demand for linked-benefit solutions has come as life-insurance policyholders seek the ability to unlock part of their benefit or cash value to cover unforeseen long-term care expenses.