Bet you don’t know that nearly half (actually 41 percent) of individual long-term care insurance claims actually last one year or less. Source: The National Advisory Center for Short-Term Care Information (www.shorttermcareinsurance.org).
Why is this important? Because facts matter. At the American Association for Long-Term Care Insurance, we get hundreds of calls every month.
It is not uncommon for agents to present traditional long-term care insurance costing $8,000-a-year to a recently retired senior couple. Sticker shock is the number one reason people don’t buy long-term care insurance.
If car dealers advertised car leases costing $1,200-a-month, I’d say we’d soon see a resurgence in carriage horses. But, they know price matters. So, you can lease a luxury car today starting at $299-a-month. Chances are very few people ever pay $299 but that’s not the point.
So, why does it matter that 41 percent of individual long-term care insurance claims end within one year?
Because, that validates my proposition that for many individuals, a short-term care insurance policy would be sufficient (Remember that not all policyholders go on claim).
I have long advocated what I call the “Good – Better – Best” approach to long-term care insurance planning. Today, “Good” is a short-term care insurance option.
If you only deal with clients and prospects where price does NOT matter, please continue as you have been. There are indeed a percentage of long-term care insurance claims that will last five years or longer. I’ve never driven a Lamborghini or a Bentley but I’ve sat in my 2006 Infiniti waiting for lights to change alongside several. So, clearly people do not all choose the same car.
A one size approach to selling long-term care insurance solutions is a recipe for limited success … more so today than ever.