A study on perceptions of long term care protection conducted by OneAmerica, in collaboration with Hanover Research, found that only 54 percent of financial professionals are currently recommending or offering long term care protection to clients.
The study, which included a survey of more than 400 financial professionals, aimed to better understand their behaviors and views related to long term care planning and selling long term care products.
While just over half of surveyed financial professionals currently include long term care protection in their recommendations to clients, an additional 25 percent have recommended it in the past but are no longer doing so. About one in five—21 percent—said they have never offered such protection to clients.
These results highlight a potential gap in helping clients prepare financially; the Administration for Community Living estimates that almost 70 percent of individuals over the age of 65 will require a form of long term care services at some point in their lives.1
“As an industry, we can—and should—be doing a better job of helping people prepare for the risk of a major expense that, statistically, we know they’re likely to face,” said Jeff Levin, vice president of distribution, Care Solutions, OneAmerica. “Long term care protection can help protect the retirement income that financial professionals and their clients have worked so hard to build.”
The results of the survey of financial professionals follows the LTC Consumer Planning Study, which examined perceptions of consumers about long term care.
The two studies show the top two reasons financial professionals sell long term care insurance are the same reasons clients purchase it—to remove the financial burden of long term care events from clients’ families (73 percent) and to provide financial security (67 percent).
Clients who inquire about long term care protection are most likely to have family members who have experienced a long term care event. Other clients who express interest in long term care are those who are about to retire and those who have recently experienced a health challenge or who have been diagnosed with a health condition.
Asset-based long term care protection viewed more positively
As in the consumer study results, asset-based long term care protection was preferred over traditional LTCI. Eighty-five percent of the financial professionals surveyed had a positive impression of life insurance with a long term care benefit, while 60 percent had a positive impression of traditional LTCI.
While financial professionals said they like selling traditional LTCI because of cost and ease of use, they shared their reasons for recommending asset-based long term care protection were more substantive and more aligned with the needs of their customers.
The top three reasons financial professionals said they recommend asset-based long term care protection were:
- Unused amount passed to heirs
- Clients can combine life insurance with long term care benefits
- Tax advantages of repositioning assets
“Financial professionals who are familiar with asset-based long term care showed they understand how it can benefit their clients,” Levin said. “It’s part of a well-rounded approach to financial planning.”
Learn more about how financial professionals view long term care and download the full financial professional research survey here.
Reference:
1. “How Much Care Will You Need?” 2/18/2020. https://acl.gov/ltc/basic-needs/how-much-care-will-you-need.
The OneAmerica Long Term Care Financial Professional Planning Study was administered in association with Hanover Research and distributed online to financial professionals. This analysis includes more than 400 respondents, following data cleaning and quality control. Respondents were at least 18 years old, employed in the United State as a financial professional and have an awareness of long term care insurance. Hanover Research is not an affiliate of the companies of OneAmerica.
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