The American Association for Long-Term Care Insurance (AALTCI) posted the results of the2010 LTCI Market Study. More than 400 professionals responded to the survey. The results reflect responses by personal producing agents who have sold at least one LTCI policy in the past 12 months.
The report stresses success through specialization; more and more producers are turning to specialization as opposed to casually selling the product. So how do LTCI specialists, who earn the majority of their commission from LTCI sales, differ from ordinary advisors?
- They belong to professional organizations. While only 4 percent of regular advisors belong to the AALTCI, 35 percent of specialized agents belong. Membership in other professional organizations is higher, as well. In fact, while 51 percent of non-specialized agents claim not to belong to any industry organizations, only 29 percent of LTCI agents can make the same claim.
- They own LTCI. Among agents who don’t specialize, only 55 percent have coverage themselves. However, among LTCI specialists, 94 percent own the product.
- Different client objections. While non-specialized agents say their clients’ main objection is that they can’t afford the product, the specialist finds themselves faced more often with clients who believe they don’t need LTCI.
- They partner. Seemingly the biggest difference between LTCI specialists and non-specialists is in their partnering habits: Agents who specialize in LTCI partner with a range of referral sources — accountants (53 percent), financial planners (53 percent), employee benefits specialists (29 percent), and agents who don’t sell LTCI (71 percent). Only 12 percent of specialists say they don’t partner with anyone to generate referrals, compared with 41 percent of regular agents.
As reported in the American Association for Long-Term Care Insurance’s 2010 Sourcebook, this is what people are buying:
- Issue age: 77 percent between the ages of 45 and 64
- Daily benefit amount: 72 percent between $50 and $199; 28 percent at $200 or more
- Benefit period: 76 percent between two and five years; 24 percent at six or more years
- Elimination period: 83 percent from 90-100 days; 7 percent from 20-30 days
- Inflation factor: 40 percent at 5 percent compound; 60 percent at less than 5 percent compound
- Average annual premium: Ages 45-64: $1,760; ages 55-64: $2,120; ages 65-74: $2,875