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1 in 5 LTC INSURANCE APPLICANTS ARE DECLINED
March 8, 2005

Reported in LTCi Sales Strategies magazine (Volume 6, Number 4, March 2005). May be used with credit to American Association for Long-Term Care Insurance and Wakely Actuarial Services.

The importance of applying for long-term care insurance at younger ages was demonstrated by a new national study for Sales Strategies magazine readers by Wakely Actuarial Services, a firm providing actuarial and regulatory consulting services.

According to Andrew Herman, FSA, MAAA, Vice President and Consulting Actuary for the Clearwater, FL-based firm, the study looked at data from carriers representing more than 100,000 LTCi applications submitted during 2003 and 2004.   A prior study of 2002 policy applications was reported on in the June 2003 issue of Sales Strategies.

"As one would expect, the percentage of declines changes significantly as individuals age from around seven percent for those under age 50 to as high as 57 percent for applicants over age 80," explains Jesse Slome, Director of the American Association for Long-Term Care Insurance.   "There is a trend toward more declines and tighter underwriting, part of which is being driven by reinsurance."

Individual applicants who are in their 70s (and older) face more testing, face-to-face assessments and rigorous underwriting standards and experts expect the trend of tight underwriting will continue.

PERCENTAGE OF LTCi APPLICANTS DECLINED *

Age

All

    18-49

50-59

60-69

70-79

80+

Applications

100.0%

100.0%

100.0%

100.0%

100.0%

100.0%

Declined

19.6%

7.2%

10.7%

18.8%

42.9%

57.2%

Incomplete

6.9%

6.1%

5.5%

6.5%

10.6%

12.1%

Issued

73.5%

86.7%

83.9%

74.7%

46.5%

30.7%

Not Taken Rate*

10.1%

6.9%

8.9%

11.7%

12.6%

14.2%

Placement Rate

66.1%

80.7%

76.4%

66.0%

40.6%

26.4%

* As a Percentage of Issued Policies


CREDIT:   Study by Wakely Actuarial Services. Those wishing to use data must credit both Wakely and the American Association for Long-Term Care Insurance.





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