Trends to Watch: Long Term Care Insurance

Long-term care insurance has changed over the last ten years and a lot of carriers see it may have an uncertain future. Most carriers are experimenting with different products and some are making an allegiance to one program. They are laboring on how to identify new buyers and concerned with reducing risk. Some carriers are seeking ways to collaborate with government and develop public/private insurance.

Long-term care services refer to the personal and healthcare facilities as well as support provided to people who need it for an extended period of time.

New Premium Structure for Long Term Care Insurance

LTC insurance was established on the idea that rates for life insurance remained constant for several years. However, since there is little return on investment, carriers ask for hikes in rates each year.

LTC policy trends you should expect in the New Year; so weigh in your options and pick a plan that best suits your needs:

• Cheaper policies, lower coverage: Carriers are selling low-cost policies that give you varying prices each day for a year. Instead of selling consumers the 5% mark-up they sell them policies with only 3%. This means more consumers and lower premiums, but also less coverage.
• Selling simpler products online: Simple policies that can be easily compared online cut the costs for consumers and insurers alike. Various carriers looking to target online insurance shoppers are increasingly adopting these.
• No rebound for group stand-alone insurance: Group policies have lost favorability in recent years. Employers do not offer these policies like health insurance plans, and most of the time employees do not want them.
• Combination and hybrid policies: Some companies have already started rolling out hybrids of life and LTC insurance, which have become integral parts of their retirement product lines. Look for more of these products to come out in the next year.
• Combination and hybrid policies: Some companies have already started rolling out hybrids of life and LTC insurance, which have become integral parts of their retirement product lines. Look for more of these products to come out in the next year.
• Public/private partnership: The idea behind this particular partnership is that customers could cover the first few years of long-term care risk with savings, home equity, and short-term private insurance. The people, who would need care for five years or more, would be backed by government insurance.
• Younger consumers are buying LTC: 15 years ago, LTC buyers were mostly people 70+. Today they are in their mid-50s. This stems from the fact that today people realize the benefit of long-term care at an earlier age. More people who have seen family members struggle with health issues, understand the benefit of acquiring LTC early on and hence get a head start.
• Asset-based plans are becoming common: Compared to regular LTC policies, asset-based plans tend to offer greater premiums without big increases, as well as more flexibility in the payment schedules. The best thing about them is the guarantee that the LTC benefits will not be used, then the beneficiary of the insured will receive the benefit in the form of an annuity.

Keep an eye open for these opportunities in the New Year and make wise choices for a more stable future. Long-term care is a critical aspect of every community, providing necessary amenities to millions of Americans. Our nation is aging and individuals will need rehabilitative, short-term and long-term care now more than ever.