The coronavirus stock market crash is likely to impact the sale of long-term care insurance products predicts the director of the American Association for Long-Term Care Insurance.
“People change behavior when the Dow Jones Industrial Average drops from its record high of nearly 30,000 to at times below 19,000,” shares Jesse Slome, director of the long-term care insurance organization. Slome was speaking to leading insurance professionals who market both traditional and linked-benefit long-term care insurance policies.
“Anticipating and adapting to the changes in behavior can benefit your business both over the next few months and quite possibly for some time to come,” Slome noted to the insurance professionals. “I foresee both a good opportunity as well as a likely overall reduction in the number of people seeking this important protection.”
Slome shared that one of the opportunities he sees involves connecting with more individuals sequestered in their own home. “You have millions of Americans in their 50s and 60s who are sitting home with little to do beyond watching television,” Slome explained. “This isn’t the time to sell but it definitely is the time to educate which will lead to future interest and sales.”
The long-term care insurance executive suggested creating a series of educational emails that address the importance of planning and covers facts about long-term care few are aware of. “Recognize that everyone today is worried about their financial future, so sharing examples of how you were able to help someone plan for long-term care spending $100 or $125 a month is far more likely to be read by someone,” he suggests. “Explaining how most long-term care insurance pays for care at home is a message to cover.”
“I suggest specifically targeting both men and women who are single, never married or divorced,” Slome recommended. “The coronavirus has made these individuals even more aware of what happens when you are living on your own. Relate the current experience to what could happen at older ages should they require some long-term care services in their own home. Educate first, then offer a long-term care insurance quote.”
One negative impact to the overall LTC industry Slome expects is likely to occur is the reduction in new linked-benefit policy sales this year. “Many of these policies have been sold in recent years by stockbrokers and financial planners who found it easy to move their client’s money from one asset to a linked-benefit product,” Slome admits. “I don’t anticipate many stockbrokers will be calling their clients in the face of 30 percent portfolio losses.”
As a result, Slome shared he doesn’t forecast as many consumers seeking comparisons of hybrid policies from the long-term care insurance specialists on the call. “I think you’ll find greater interest in an affordable traditional long-term care insurance policy solution,” he added. “And with even lower interest rates than anyone ever would have expected, I wonder how the linked-benefit insurers will deal with their premium rate guarantees in the months ahead.”
To learn more about long-term care planning visit the Association’s website or to connect with a specialist who can explain both traditional and hybrid products contact the Association via their website or call 818-597-3227.
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