In the 25 years since I founded my brokerage, I have seen long-term care and expense planning take turns, dives and resurface. Carriers have introduced new products, left the market, changed underwriting guidelines, increased rates to new applicants, introduced gender-based pricing, increased premiums to inforce policyholders, implemented claims concierge services, transitioned to e-apps and more.

A Lot Has Changed

In the early 2000s, there were about 140 insurance carriers offering long-term care insurance (LTCI). Now there are a couple of dozen. Most thought aging baby boomers would buy LTCI and create a consistently profitable opportunity. They couldn’t wait to get into the game. And then they realized that the sales were not as robust as planned and the claims were beyond projections. Then many couldn’t wait to exit the market and looked for buyers of their LTCI portfolios.

In the early days, about 90 percent of policies sold were standalone. These are the products that I describe to clients as the auto insurance model. You figure out how much coverage you need, what is a comfortable deductible, if you want an inflation rider or a plan that spouses can share. You pay premiums and do not expect to get any of your premium dollars back if you never need care.

Over time, with rate increases to inforce policyholders, hybrid policies became the shiny new object for a number of reasons. One compelling reason is that premiums are guaranteed never to increase. Hybrids now comprise close to 90% of the market.

What Has Happened To Underwriting

In early days, the focus was on functional skills. Oh my, I chuckle when I look at some of the old applications. Obvious that underwriting morbidity – who will get sick, with what, will it require medical care or non-medical care, how long will it last – was an unknown. Today, the focus is on cognitive skills as dementia is the number one cause for claims. And given medical technology and improved treatment protocols, many medical conditions that were not insurable now may be.

What Hasn’t Changed

Yes, lots of changes. But what has not changed is the need for a plan for long-term care. And designing a plan doesn’t cost a thing. It’s about three questions:

1. If I needed care, where would I want to receive care?
2. If I needed care, who would I want to provide care?
3. If I needed care, how would I pay for care?

I work with hundreds of financial advisors and insurance producers throughout the country who, like me, are concerned about long-term care and its financial, emotional, physical and psychological impact on clients and their families.

Like many of my clients, I am widowed and do not have family close by to rely on for long-term care. Nor would I want to burden them with my care. I do have a plan in place. If you have a plan, be sure that you share it with family and friends who need to know your plan. And if you don’t yet have a plan, contact us today to design one and share it with those who need to know.