March 28, 2017
“We’ve learned that one constant in all of this industry change is that the need for long-term care planning is only growing.”
One of my mentors always used to tell me, “The only constant in life is change.”
That certainly holds true when it comes to both the individual and group long-term care insurance marketplaces. Not too long ago, numerous companies were offering voluntary and executive group LTC insurance to small, mid-size and large employers, usually offering guaranteed issue (GI) underwriting. Even groups with as few as three employees received simplified issue (SI) underwritten policies.
Fast-forward to today. There’s a new normal when it comes to the marketplace — from the companies offering coverage, to types of programs available, and the underwriting concessions provided to employer groups. Over the past five to eight years, we’ve seen numerous in-force rate actions and carrier contraction (suspension of sales or exits).
Why have we experienced these changes in the marketplace? Is this a viable or long-term marketplace? These are questions that we’re asked daily by brokers and employers. The answer regarding all of the change is lower than expected lapse rates, a challenging regulatory environment, record-low interest rates and worse-than-expected claims experience. That’s the secret sauce for change.
So what have we learned as an industry? We’ve learned that one constant in all of this change is that the need for long-term care planning is only growing. Despite the demand-supply imbalance (fewer companies offering coverage), interest in corporate or worksite LTC insurance solutions continues to grow.
Survey after survey shows employees are seeing loved ones deal with long-term care events and they’re interested in learning more about this retirement planning benefit. We’ve seen different solutions emerge, including multi-life LTC insurance and group life insurance with LTC benefits. Additionally, we’re likely to see market entries or re-entries in 2017-2018.
LTC insurance isn’t dead, it’s just different
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