Filed Under:Health Insurance, Ltci

"Refine" Long-Term Care Insurance, Actuary Says

One barrier to LTCI sales is consumers' belief that they won't need need LTC, an actuary says. (AP Photo/Phil Coale)
One barrier to LTCI sales is consumers' belief that they won't need need LTC, an actuary says. (AP Photo/Phil Coale)

Steve Schoonveld, a veteran long-term care insurance (LTCI) actuary, has come up with 7 ideas for making the product easier to sell and easier to buy.

Schoonveld shared the ideas recently during a presentation in Burlington, Vt., at the summer meeting of the National Conference of Insurance Legislators (NCOIL), Troy, N.Y.

Schoonveld is a member of the Federal Long-Term Care Task Force at the American Academy of Actuaries (AAA), Washington. He was the co-chairperson of the Joint American Academy of Actuaries and Society of Actuaries CLASS Act Task Force -- a body that kept track of the ill-fated voluntary LTC benefits program that was supposed to be created by the Patient Protection and Affordable Care Act of 2010 (PPACA).

The AAA has posted a copy of a written version of Schoonveld's NCOIL LTCI presentation on its website.

Schoonveld said during the presentation that challenges to increasing sales of private LTCI include conflicts between what consumers say and what they do.

Consumers say they like the idea of buying LTCI and of lifetime income streams, but more say they will buy it than actually buy it, and they often choose lump sums over income streams when they get a chance, Schoonveld said, according to the written version of the presentation.

Consumers also tend to think more about the short-term than the long-term, and they tend to doubt the possibility that they themselves could end up needing long-term care (LTC) services, Schoonveld said.

Schoonveld, who has advised LTCI carriers, said he thinks LTCI policymakers, regulators and carriers could increase use of private LTCI by joining together to take the following steps:

  1. Allow for shorter benefit periods and longer elimination periods.
  2. Remove or lower the mandatory offer of inflation protection.
  3. Allow for longer waiting periods in which no benefits are
  4. payable.
  5. Allow for flexible premiums.
  6. Allow for purchase of coverage with pre-tax dollars and in
  7. cafeteria plans.
  8. Expand the sales force.
  9. Encourage combo products with additional base plans.
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