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Long Term Care Insurance Leads Revolve Around Certain Dynamics

Agents in search of long-term care insurance leads should take note of a study which points out some key data as to the audience that is buying LTC coverage.

When it comes to purchasing LTC protection, there are some important differences between people buying group (employer-sponsored) coverage with those acquiring on an individual basis (generally through an insurance agent).

A 2009 study from the American Association for Long-Term Care Insurance notes that group purchasers oftentimes are younger, tend to choose longer coverage and also claim against their policy starting at younger ages.

The Association studied data from 95,000 buyers of employer-sponsored long-term care insurance protection and more than 200,000 individual purchasers. Approximately 8.2 million Americans presently have long-term care insurance protection, while some 400,000 new policies or group certificates are distributed annually.

Association Executive Director Jesse Slome notes, “Individuals continue to purchase protection at younger ages but that is especially true for those buying coverage in the workplace.”

Data, which can assist agents looking for long-term care insurance leads, shows that in 2008, some 24% of buyers acquiring coverage through an employer-sponsored plan fell into the 35-44 age group, another 36% were between ages 45 and 54 and 23% were in the 55-64 age range.

“Buyers in the group marketplace tend to be younger than those purchasing coverage on an individual basis,” Slome commented.

The Association’s study of individual purchasers discovered that 5% were between 35 and 44, 24% were between 45 and 54 and 53% fell in the 55-64 range.

For the first time, the study analyzed initial premiums paid by employees acquiring protection under a group plan.

“One of the biggest misperceptions is that long-term care insurance protection is expensive,” Slome said. The Association’s study showed a major spread between the low and high amounts paid per-employee. “For example, for those between ages 45 and 55, the low premium was $430-per-year while the high premium was $985.” The average for this age band was $690.

The study also researched claims being paid to those covered by an employer-sponsored long-term care insurance coverage.

“Because many employer-sponsored plans offer some form of simplified underwriting or even guaranteed issue, we expected to find more people qualifying for benefits at younger ages,” Slome remarked.

Indeed, the Association’s study discovered that 13 percent of new claims initiated during last year were for individuals under age 60.

“Some 11.5 percent of new group LTC claimants file their claim during the fourth or fifth year of their coverage,” Slome said. The largest open claim under a group plan tops $490,000 and the individual has been on claim for more than nine years.

When looking for long-term care insurance leads, agents will want to know the numbers and how they will impact their potential sales.