The latest examination of long-term care insurance applicants can help agents communicate the importance of timely planning.
One of the reasons individuals do not pursue long-term care insurance planning information is the general sense that coverage can be obtained at any age. It makes logical sense in their minds to wait until a need is relatively imminent. As many consumers will tell you, why pay for something I may never need or won’t need for many years?
Agents marketing traditional and linked benefit long-term care solutions have lacked relevant and timely information that can help support efforts to create a desired sense of urgency.
Sharing two new pieces of data can help agents when talking to prospects. The latest long-term care insurance statistics reported by the American Association for Long-Term Care Insurance reveals ages when individuals obtain coverage and the percentage of applicants declined by insurers.
According to the data the vast majority of new traditional long-term care insurance policies are issued to individuals between ages 55 and 64. For 2020, over half (54%) of all new applicants were between 55 and 64. The latest 2021 data reported in the 2022 Milliman LTCI Survey found that 33-percent of new policies were issued to individuals in this age band.
Last year’s decline is an abnormality, attributed to the significant number of younger applicants seeking to avoid the new State of Washington tax. For most prior years, the percentage of buyers in the sweet spot for LTC insurance purchasing (55 to 64) has remained relatively steady at 50 percent.
An important number to share is the number of new policies issued to those who waited until after age 70 to apply.
For 2021, the national percentage of all new policies amounted to a meager 3 percent. This has been consistent with prior years. In simple terms, waiting past age 70 makes it highly unlikely that traditional LTC insurance will be an option available.
While the age when people buy coverage is important , the second piece of data shared by the American Association for Long-Term Care Insurance may have greater relevance to marketing efforts. Between ages 70 and 74, nearly half (47.2%) of those who applied for long-term care insurance were declined by the insurer. Over a third (38.2%) of those between ages 65 and 69 were declined.
Combining the two pieces of statistical information provide agents with a powerful one-two marketing punch. It clearly conveys to consumers that waiting is not a prudent strategy if they hope to consider insurance as an option for dealing with the possible risk of one day needing care.
The time to consider options is when you are within the age bands when your health is likely to meet required underwriting standards. Coincidentally, it is also the time when premiums are likely to be more affordable.
While hybrid long-term care policies are now more commonly sold, data for these policies is not gathered. And, for the most part, consumers thinking about long-term care insurance planning still begin by looking at data relative to traditional health-based products.