The Evolution of LTCi: Changing to Meet Needs Better
May 25, 2014
It’s obvious that as baby boomers approach their senior years and economic changes take place, long-term care becomes a more pressing financial threat.
Long-term care insurance, a risk management tool designed to serve as a cushion for care expenses that a person may incur, is keeping pace with these changes.
Currently, LTCi carriers are finding ways on how to deliver their services better and how they can provide coverage to different types of needs.
Different Challenges
Ten years ago, there were 100 insurance companies that sold LTCi. Today, it’s down to 20. While some companies left the market due to mergers, most companies that exited the business reported that they had underestimated the cost needed in providing long-term care coverage.
Existing companies are now pushing for rate hikes because of their big claims history, and they have been successful in getting them approved. As a result, the rates of LTCi have increased, making it as an expensive, yet must-have policy.
Although the price increases can be shown as reasonable and based on current cost of care services, the expense of LTCi becomes a major cause of buyer disinterest.
Dealing with Consumer Unease
LTCi providers recognized the major qualms of buyers, and have devised ways to address the different reservations that the market has about LTCi.
Most people are believed to be skeptical about LTCi because of the anxiety about buying a product that may never be used.
Since this is the case, some insurance companies try to offer a win-win situation by offering long-term care riders in life insurance policies. With this feature, policyholders can use their death benefit to pay for their long-term care expenses. If they don’t need long-term care, their death benefit will be passed on to their beneficiaries.
Planning for long-term care is essential, but your exact future needs are unknown. Some experts say that, yes, you can make estimations, but you also need to leave enough room in your plan for anything unforeseen. Long-term care insurers are aware of this and now offer guaranteed purchase options that allow policyholders to expand their coverage down the road.
Better Protection
In the past, long-term care insurance agents sold policies that were designed to cover all care expenses. Though a comprehensive policy is usually a good deal, this may not be the case for those who intend to keep premiums low and those who want to self-insure for a portion of their care.
Today, sellers of this policy offer coverage on different levels, with the new mindset that some care is better than none.
Furthermore, insurance companies recognize that most Americans prefer to stay at home than in a nursing home facility. Today, LTCi policies don’t just cover nursing home care, but a number of care settings and services including home care.
Overall, sellers of long-term care insurance are continually making their product more flexible in order to address all levels of need Visit Your URL. As the middle-age and senior population continually grows, it’s important to provide the market with different coverage options.