One of my mentors always used to tell me, "The only constant in life is change."

That certainly holds true when it comes to both the individual and group long-term care insurance marketplaces. Not too long ago, numerous companies were offering voluntary and executive group LTC insurance to small, mid-size and large employers, usually offering guaranteed issue (GI) underwriting. Even groups with as few as three employees received simplified issue (SI) underwritten policies.

Fast-forward to today. There's a new normal when it comes to the marketplace — from the companies offering coverage, to types of programs available, and the underwriting concessions provided to employer groups. Over the past five to eight years, we've seen numerous in-force rate actions and carrier contraction (suspension of sales or exits).

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Why have we experienced these changes in the marketplace? Is this a viable or long-term marketplace? These are questions that we're asked daily by brokers and employers. The answer regarding all of the change is lower than expected lapse rates, a challenging regulatory environment, record-low interest rates and worse-than-expected claims experience. That's the secret sauce for change.

So what have we learned as an industry? We've learned that one constant in all of this change is that the need for long-term care planning is only growing. Despite the demand-supply imbalance (fewer companies offering coverage), interest in corporate or worksite LTC insurance solutions continues to grow.

Survey after survey shows employees are seeing loved ones deal with long-term care events and they're interested in learning more about this retirement planning benefit. We've seen different solutions emerge, including multi-life LTC insurance and group life insurance with LTC benefits. Additionally, we're likely to see market entries or re-entries in 2017-2018.

Why offer this benefit?

 

Coverage helps employees protect their retirement income and lifestyle:

  • It's the "missing piece" of financial wellness or retirement readiness programs

  • More and more employees have personal experience with long-term care

  • There is growing recognition of the need to prepare for health care costs in retirement, and people are turning to their employers for help.

By understanding the issues and the evolving nature of the LTC insurance industry, benefits brokers have the opportunity to present group LTC insurance coverage as a viable and highly desirable option for their clients.

Group LTC insurance program advantages:

 

  • Simplified or guarantee issue coverage may be available

  • Unisex rates

  • Group or multi-life rate structure

  • Plans are offered to family members

  • 100 percent portability

  • Robust education and awareness campaign

  • Flexible billing options (payroll deductions or direct bill)

  • Ease of enrollment (online)

  • Coverage can be offered on a voluntary or employer-funded basis

  • Unique tax treatment (for employer-funded cases or for employees with HSAs)

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