“LTCI is dead,” a financial planner told me recently.

“Really?” I asked. “Why would you think that?”

“Well, because no one can get approved, it's way too expensive, and I don't want my clients to be faced with rate increases. Now I sell hybrids to all of my clients. That way at least someone is guaranteed a benefit.”

“What do you do about the clients who can't afford to plunk down $100,000 for a policy? Or clients who can't qualify? Or clients who want a partnership policy?”

Silence.

Long-term care insurance isn't dead. What is true is that the industry is down this year—by some accounts as much as 32 percent.

Here's a look at three reasons for the slowdown — and five ways to respond.

The slowdown

  1. Consumers think the industry is in trouble.

Thanks to all the bad press LTCI has received, consumers have the impression the entire industry is unstable and unreliable. As agents we're sure not helping when we also lament the latest changes. Also, companies trying to sell alternate products aren't exactly helping. We've all seen advertising that sort of goes like this: “If you think LTCI is too expensive, then you should be looking at this life insurance policy with a long-term care rider!”

I've sat in on countless webinars where the speakers degrade LTCI in order to promote their own products. If an agent with little or no experience with LTCI hears that enough, he begins to think, “Wow. I wonder if LTCI really is in trouble?” and will pass that sentiment along to his clients.

  • Rate increases seem much worse than they really are.

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