Tuesday, January 20, 2009

Long-Term Care Insurance: What Happens After They Buy

One of the most interesting aspects of my job is compiling the data for the annual Long-Term Care Insurance Sourcebook. This is a compilation of all the most relevant data we can compile ... acquire ... and share with members of the Association.

One of the questions I've been asked is "what happends after someone purchases long-term care insurance? How many people keep their policies? How many drop them? How many die?"

It is important information for several reasons. First, most people who purchase long-term care insurance understand the value of what they have purchased. Compared to other forms of insurance, fewer drop this protection that say life insurance or diability products. Thus, one can assure people who buy, they will likely have and keep this coverage should the need for benefits arise.

The 2009 Sourcebook will provide detailed (cumulative) data on what happens after people buy long-term care insurance protection. Here's what it will note based on data reported by the Indiana Partnership for Long-Term Care. Of some 43,475 policies purchased, some 8,086 have been dropped (35,412 are still in force).

The Indiana Partnership was implemented in 1993. Thus, in the 15 years since sales began, 82% of policies sold remain in-force.

Primary reasons for dropping the policies are:
Voluntary (2,016 or 25%)
Died (990 or 12.3%)
Unknown (2,543 or 31.5%)
Not Taken Up (2,381 or 29.5%)
Converted (78 or 1%)

A little tid bit worthy of including should you ever be asked the same question by a prospect or client.

For more information, visit the Association's Producer Resource Center where we will continually add new audios and information.

If you have suggestions for data you want included, send me an E-mail: Click Here.

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