18
ID Trends
2019
5 big trends from page 16
Changes — growth in
3 Distribution
Group and B2C offerings?
For years LTC Insurance was primary brought to market by
two distinct channels. The first channel was made up of LTC
specialists who had deep product knowledge. These specialists
were either carrier career agents or offered a full suite of
products. Complementing the LTC specialist was the “occasional”
producer, typically a financial advisor, who often worked through
a specialist LTC BGA.
Look for growth in the employer market. Employers can
offer traditional LTC plans to employees through special
worksite products from carriers like Transamerica and Mutual
of Omaha. Employees are trusting of the recommendations of
their employers and benefit from advantages like streamlined
underwriting and unisex pricing. In addition to traditional plans,
life/ltc plans with guaranteed issue acceptance and plans are
appealing to a younger marketplace.
Look for another area of growth — direct to consumer sales
of LTC Insurance by carriers and start-ups. To see what could be
happening in the direct to consumer LTC business it is instructive
to look at new life insurance startups which allow for a quick
buying experience with automated underwriting.
Environment — will “best
4 Regulatory
interest” rules come to LTC Insurance
due to state regulation?
Even if you are not an investment professional, many advisors
are familiar with the long-running debate between suitability
and fiduciary standards in financial products advice. Don’t
expect the federal government to impose new rules, but as
many as 14 states are looking at imposing a “fiduciary duty”
standard on insurance agents. Not surprisingly many of these
14 states are large coastal population centers. Despite your
opinion on the matter, the prudent approach may be to carefully
document the planning approach with a client. This could
include describing the types of LTC products considered for
coverage, including both traditional and linked products from
multiple carriers.
Employees are trusting of the
recommendations of their
employers and benefit from
advantages like streamlined
underwriting and unisex pricing.
dealing with in-force
5 Carriers
block management.
Current LTC products are properly priced, but many carriers
are struggling with the health of in-force premium blocks. The
reasons have been well documented including an extended
low interest rates and lower policy lapse rates than expected.
Because of these concerns, carriers who are either maintaining
blocks or buyers who are looking to purchase blocks are seeking
ways to improve their financial performance.
Some things that can help the performance of blocks aren’t
necessarily great news for policyholders (or the reputation of
the LTC Insurance business). Examples include higher policy
lapses, tighter claim handling, and more in-force rate increases.
Lower the need for care in the future
There are ways to lower the chance of LTC policyholders from
needing care in the future. These efforts of reducing the cost
of in-force blocks by managing the risks of aging have been
around for a while, but recent advances in artificial intelligence
and monitoring tools (home sensor, etc) will make a significant
impact in what is called PHM (population health management).
These means understanding the issues facing policyholders
before they are claim eligible. An example of how this can work
is providing proven resources to help aging people with issues
such as loneliness (which is a health hazard), fall prevention and
other helps. Innovative companies such as Assured Allies are
helping carriers with these initiatives.
It’s human nature to focus on the negative aspects of
LTC planning and LTC Insurance — but there is plenty to be
optimistic about in the future.