Sociodemographic
Profile
Both
buyers and non-buyers who looked at the product tend to be wealthier
and more often college educated than their counterparts. Most are married.
The non-buyers, who had gathered information on LTCI while considering
purchasing a policy but decided not to, tend to be older and less wealthy
compared to buyers of LTCI. Buyers tend to be employed more frequently
than non-buyers. Sixty percent of the buyers are found most often in
the age range from 55 to 69, with an average income of $42,500 or more,
and having average liquid assets of $100,000 or more. Fifty five percent
of these buyers are female and seventy percent are married.
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Opinions
on long-term Care Insurance
Attitudinal
factors appear to be differentiable when comparing buyers to non-buyers.
Most buyers tend to be 'planners' and will usually agree that 'It is
important to plan now for the possibility of needing long term care
services in the future.' Quite frequently non-buyers will have the belief
that the government will help pay for most of their long term care costs
in the future, which is not much incentive to purchase an individual
policy on their own. Given that the non-buyers have previously met with
an agent or received information on LTCI, suggests that there might
need to be more education on the subject of government and long-term care insurancefor
the clients with the latter belief.
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Attitudes
with Risk and Payment of LTC Services
As expected,
buyers tend to believe they will be at a higher risk for needing nursing
home or home health care services in the future than do non-buyers.
Reasons for this difference of thinking could be experience with a friend
or family member in need of long term care, personal or family health
history, or a lack of education on long term care. When asked how they
would fund LTC costs without the aid of an LTC policy, typically buyers
listed income, assets, and family, while non-buyers listed income, assets,
family, government, and current insurance plans. The response of the
non-buyers suggests that if in need they believe they will be covered
for long term care services through the government and their current
insurance, even after speaking with an agent or researching LTC by other
means. However, comparing surveys from 1990 and 1995, fewer buyers expect
help from a government program for covering their long term care costs.
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Policy
Design
In 1990 nursing home policies dominated the long
term care insurance market. Since then, the market has consistently
seen more demand for comprehensive coverage. Currently, only one in
seven long-term care insurance policies sold is nursing home only. Frequently, these nursing
home only policies are purchased by older, single female clients with
fewer assets, lower incomes, and they are less frequently employed.
There has also been in an increase in inflation benefits being bought
with LTCI policies, which is in part a result of the average age of
buyers decreasing from 69 to 67 since 1995.
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Reasons
Behind the Purchase Decision
The number one reason found in surveys of buyers for purchasing their
LTCI policy was to protect their assets. Other reasons given were to
ensure affordability of services, ensure choice in terms of service
type and independence, and to protect their family's standard of living.
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Process
of Buying LTCI
Most buyers use
agents, spouses, children, relatives, and financial planners to help
with the research of long-term care insurance. Two out of three buyers said that their spouses
and agents had the most influence on their decision to purchase a LTCI
policy. When asked what was important in deciding which insurer to use,
more often than not the agent's recommendation and insurers reputation
were mentioned most. It was also found that an overwhelming majority
of both buyers and non-buyers felt that the agent that they had worked
with was knowledgeable, clear at explaining the benefits and options,
and that they listened well and recommended a policy best suited to
the purchaser's needs.
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Reasons
Behind Not Buying
Cost was by far the number one reason behind declining to buy a
policy. Other reasons were that the market is still expanding, suspicions
about insurance companies were expressed, lack of understanding of the
risk of needing long term care was found, and confusion with what the
government will or will not pay. In fact, 44 percent of non-buyers said
that they did not believe that the insurers would pay benefits as stated
in the policy. Lack of knowledge of the product was another reason.
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Source:
All statistical data and information was taken from the HIAA's Who
Buys Long-Term Care Insurance in 2000?
