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A new survey finds that many baby boomers erroneously believe they have adequate insurance coverage for long-term care (LTC) expenses. But some LTC insurers also say this influential demographic group is becoming more receptive to their marketing overtures, which include touting easy-to-understand cash-model products and discussing Long Term Care products at the work site, where one LTC carrier says annual sales growth is in the double digits.

Insurers and brokers contacted by HPW acknowledge that selling Long Term Care products to baby boomers — or anyone else — can be challenging, given its connotations with "nursing home insurance" and the fact that few people want to talk about not being able to take care of themselves.

Indeed, just 25% of baby boomers nearing the age of 60 said they are "very familiar" with Long Term Care insurance, while 41% said they had not had any discussion of LTC in the past 12 months, according to a new survey by America's Health Insurance Plans. Furthermore, only about 5.2 million Americans actually have Long Term Care insurance, according to the National Association of Insurance Commissioners. In 2006, total U.S. LTC premiums were $7.7 billion for individuals and $1.2 billion for groups, according to LIMRA International, a financial services and marketing information company.

Still, some Long Term Care insurers are seeing success in the boomer market as they simplify marketing messages and as more boomers become aware of longevity issues.

One historic problem in marketing LTC products has been confusion surrounding the complexity of these offerings, Christopher Perna, president of MedAmerica Insurance Corp. says. "Consumers are reluctant to put $1,000 to $2,000 a year on the table to pay insurance premiums for products that they fundamentally don't understand what they're getting."

Employers Offer Growing Market for LTC

One source of that growth likely is among employers. "It's probably the biggest opportunity for growth facing the industry right now," says Perna. "Employers can choose to fund a portion of the benefit or offer it on a strictly voluntary basis, where the employee pays the full premium."

Genworth Financial Inc. also has seen more interest in LTC insurance by both large and small groups, says Beth Ludden, senior vice president of product development at Genworth.

"It's generally part of their voluntary benefit package," Ludden says — "although we are seeing a large number of employers being interested in purchasing a small benefit package for their employees and allowing them to buy up from that. Any time that an employer is concerned about their employees, if we can get good promotion from the employer, then we can get good penetration in an employer group."

Educational Seminars Also Are Fruitful

Another successful marketing approach involves the old-fashioned seminar, another executive says.

The most effective seminars involve small groups of about 15 to 30 people, and focus on LTC education rather than specific products, says Robert Vandy, director of business development at National Long-Term Care Brokers, a brokerage general agency that represents a dozen LTC carriers and specializes in consulting and sales. Seminars often are held in places where seniors congregate, such as senior centers. "But we also see seminars where they are focused on the baby-boomer generation," Vandy says.

"We're finding the boomers are now taking care of or paying for mom and dad's care," he says. "So the light bulb is going on and they're realizing, from a selfish standpoint sometimes, 'There goes my inheritance out the window.' Or from a not-so-selfish standpoint, 'We're worried about mom and dad, and I can't quit my job to take care of mom and dad. So what do we do?'"

In fact, interest in Long Term Care insurance has been increasing as more people become aware of longevity issues, says Ludden. For a long time, there was the positive message that a person is going to live a long life. "Well, everything has good and bad news," she adds. "Some of the issues are coming to light.…With longevity comes the prospect of disability and the need for long-term care services, which goes into the issue of who would provide that service and how would it work."

As baby boomers move along the age continuum, and are confronted with parental care-giving issues, MedAmerica's marketing strategy will likely change, says Perna. Boomers will start to shop for these products, and look for them on the Internet. "At that point, there will be the opportunity to do some direct-to-consumer selling," Perna explains.

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