Purpose of Presentation• Track and compare product purchase trends
between 1990 and 2010.• Compare attitudes and characteristics of
current and past buyers and non-buyers as well as a sample of individuals from the general population age 50+.
• Obtain view of consumer attitudes regarding the role of the public and private sectors in LTC financing.
• Provide information about how to approach market barriers.
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Participating CompaniesNine companies, representing the vast majority of total individual sales and diverse market segments in 2010-2011, contributed to the study
Bankers Life and Casualty Genworth Financial John Hancock Long-Term Care Partners MedAmerica Metropolitan Life Mutual of Omaha Northwestern Mutual Prudential
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Sample Size
• Buyers (paid a premium and were beyond free look)• 1,493 returned surveys
• Non-Buyers (met agent and chose not to buy or returned in free look period)• 408 returned surveys
• General Elders (random sample age 50+)• 500 completed interviews
• Individual Policies Analyzed• 8099 policies
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What are Key Trends in Socio-Demographic Characteristics of Buyers in
the Individual Market?
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Socio-Demographic Characteristics of Buyers
Characteristic 2010 2005 2000 1995 1990Average Age %> 70
598%
6116%
6540%
6949%
6842%
% Married 69% 73% 70% 62% 68%
Median Income% > $50,000
$87,50077%
$62,50071%
$42,50042%
$30,00020%
$27,00021%
Median Assets% > $75,000
$325,00082%
$275,00083%
$225,00077%
$87,50049%
N.A.53%
% College Educated 71% 61% 47% 36% 33%
% Employed household
69% 71% 35% 23% N.A.
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Socio-Demographic Differences Between Buyers, Non-Buyers and General Population
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College Graduates
Income Greater than $50,000
Assets Greater than $100,000
Someone in Household Employed
Marital Status0%
25%
50%
75%
100%
68%74% 77%
67% 69%
46% 47% 46%52% 57%
44%
52%
40%
55% 61%
Buyers Non-Buyers General Population
Average Age: Buyers 59 years; Non-Buyers 67 years; General Population 64 years
Perceptions About Who Would Pay for Long-Term Care
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Medicaid or Medicare
Other Health Insurance
Self or Family Reverse Mortgage
Other Don't Know0%
25%
50%
75%
16%10%
59%
1% 1%
13%
28%
9%
37%
1% 3%
22%20%14%
37%
1%6%
22%
Buyers Non-Buyers General Population
Believe That Risk for Needing Care is Greater than 50%
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Nursing Home Care Home Care0%
25%
50%
75%62%
70%
58%66%
29%
54%
Buyers Non-Buyers General Population
What Are People Buying and How Have Trends Changed Over Time?
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Summary of Characteristics of Policies
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Policy Characteristics Average2010 2005 2000 1995 1990
Policy Type Nursing Home Only Nursing Home & Home Care Home Care Only
2%92%6%
3%90%7%
14%77%9%
33%61% 6%
63%37%---
Daily Benefit Amount for NH Care
$154 $142 $109 $85 $72
Daily Benefit Amount for Home Care
$153 $135 $106 $78 $36
Integrated Policy Elimination Period
89 days 81 days 47 days 46 days ---
Nursing Home Benefit Duration 4.8 years 5.4 years 5.5 years 5.1 years 5.6 years
Percent Choosing Inflation Protection
74% 76% 41% 33% 40%
Age 55-64 Age 65 to 69 Age 70 to 74 Age 75+$0
$500 $1,000 $1,500 $2,000 $2,500 $3,000 $3,500 $4,000 $4,500
$2,255
$2,759
$3,294
$3,949
Long-Term Care Insurance Premiums in 2010
Average Premiums in 2010: $2268
Why Do People Choose to Buy or Not Buy LTC Insurance?
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Most Important Reason for Individual LTC Insurance Purchase
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Avoid Dependence
Protect Assets/
Leave Es-tate
Guarantee Af-fordability
Protect Liv-ing Stan-
dards
One of Other Reasons
0%
10%
20%
30%
40%
18%
33%
13%18% 17%
23%
36%
18%
14%10%
2010 2005
Reasons Why Buyers Bought Policies Now
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Worried health would prevent getting insurance later
Cost of insurance would increase in future
Thought it was good idea to have now
I could afford it now
Know someone who recently needed LTC
Comfortable with product and have enough information to make decision
0% 20% 40% 60%
7%
54%
15%
8%
5%
7%
If govt paid for
care when bene-
fits ceased
Tax de-
ductibility
If I though
t the risk of use was
greater
If I could get dis-
counts on
service costs
If rates re-
mained stable
Other
0% 10% 20% 30% 40%
29%
26%
15%
8%
14%
8%
28%
22%
19%
10%
9%
12%
27%
21%
15%
12%
12%
13%
2000 2005 2010
Most Important Factors Leading Current Non-Buyers to Consider Buying a Policy
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Don't Believe Insurers
Hard to Choose Policy
Too Costly Waiting for Better Policy
0%
25%
50%
75%
18%13%
61%
20%17% 14%
53%
19%15%
18%
54%
29%20%
28%
57%
31%36%
54%58%
41%
2010 2005 2000 1995 1990
Most Cited Very Important Reason for Individual Not Buying Insurance
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Plan to buy before retirement
Plan to buy around retirement
Plan to buy after retirement
Do not plan to buy at all
Undecided about whether to buy
0% 25% 50% 75%
7%
2%
4%
31%
56%
Non-Buyers Plans for Purchasing LTC Insurance
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What Goes Into the Consideration of Specific Policy Purchase?
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Factors Important to Specific Purchase Decision
Company's repu-tation
Agent rec-ommenda-
tion
Company's financial rat-
ing
Policy cost Policy Benefits0%
25%
50%
75%
63%59%
46%
37%31%
63% 62%
46% 44%
23%
41%48%
33%
32%
23%
2010 2005 2000
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Attitudes About Role of Government and Private Financing
of Long-Term Care
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Attitudes About Government and Roles in LTC Financing Among the General Population Age 50+
Characteristic 2010 2005 2000
It is the Federal government’s responsibility to pay for LTC needs of ALL people 25% 34% 42%
Whatever health reform comes about in the next few years, it is more likely that individuals will have to rely n themselves to plan and pay for LTC
85% 79% 77%
Private insurance companies provide good LTC products that are a good value for the money 46% 32% 34%
It is the federal government’s responsibility to encourage people to buy LTC insurance by allowing premiums to be fully tax deductible whether or not one itemizes
73% 73% N.A.
It is the federal government’s responsibility to encourage people to buy LTC insurance by allowing employed individuals to use pretax dollars to pay for insurance
63% N.A. N.A.
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Single Most Important Action Government Should Take in Area of LTC Financing
0%
10%
20%
30%
40%
50%
41%
14%
30%
9%6%
26% 26%22%
10%
16%
32%
24%
18%
12% 13%
2010 2005 2000
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Awareness Among Individuals Age 50+ of Long-Term Care Insurance
Aware of Insurance Covering LTC
Been Approached to Buy LTC Policy
Considered Buying an LTC Policy
0%
25%
50%
75%
57%
43% 41%
66%
43%38%
63%
46% 45%38%
28%21%
2010 2005 2000 1995
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Knowledge about Partnership Policies Among the General Population Age 50+
Partnership Question 2010
Does your state participate in a LTC Partnership Program?
Yes No Don’t know
7%18%75%
If your state did participate in a Partnership Program, how likely would you be to buy a private LTC insurance policy?
Likely Not Likely Don’t know
45%51%4%
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Conclusions• LTC buyer is getting younger.• Policies continue to provide comprehensive
coverage.• The reasons and factors why people bought
or did not buy policies remain fairly stable over the past five years, with a somewhat greater emphasis on protecting living standards.
• General attitudes toward LTC insurance are improving and most people believe that the federal role should be to encourage purchase of the insurance.
• Government action designed to lower the net cost of insurance /services is what is most desired by the public.
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Questions
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