The Evolution of LTCI

For LTCi, Carriers Are Upping the Quality Quotient

With an eye toward the challenges in retirement,
creating stronger, more sustainable solutions

by Brian Vestergaard

Mr.Vestergaard is Vice President of Product and Marketing for LifeSecure Insurance Company, in Brighton, Mich. Connect with him by e-mail:

Part 4 in a 4-part series.

In its relatively short history, long-term care insurance (LTCI) has experienced tremendous changes both to its overall market and its product variations.

There have been dramatic market fluctuations, especially in recent years, and today’s products are drastically different in terms of pricing and design. Despite these changes, the need for LTCI has never been greater.

That’s why more carriers are focused on offering quality LTC solutions that can meet the needs of more families and create a more stable future for this important coverage. Carriers committed to offering LTCI are showing why it remains an important piece of the retirement planning puzzle and valuable part of your book of business.

LTCI’s Early Days

When LTCI’s market surge began in the 1980s, insurers had a challenging task on their hands. Not only were they pricing a new product with long-term risks that required them to predict variables on future claims 30 to 40 years down the road, they were doing so in an aggressive environment.

LTCI was a hot commodity in its early days and scores of carriers jumped into an incredibly competitive market. The result was a handful of products that featured competitive premiums, rich and unlimited lifetime benefits, along with aggressive agent compensation strategies.

Unfortunately for these pioneer carriers, their pricing assumptions were incorrect. Factor in climbing LTC costs, lower-than-expected lapse rates, increasing policyholder longevity, and historically low interest rates, and insurers quickly realized they had underestimated their risk.

You’ve likely heard of the results, as the industry has experienced a few tumultuous years recently – from policy adjustments and rate increases to multiple carriers exiting the market entirely. Today, carriers have reined in features like unlimited benefits and limited pay options and are focused on creating stronger, more sustainable products for the benefit of agents and consumers alike.

Pricing Changes

One of the primary ways LTCI has evolved to create a stronger product is in its pricing. For example, before entering the market in 2006, LifeSecure studied decades of industry experience, pricing and economic factors, which we used to develop our product and business model.

This allowed us to create high-quality products with contemporary pricing assumptions, targeting greater stability and strong risk protection. As a result, we’ve been able to overcome common pain points that many carriers and agents experienced in the industry’s early years.

Another common evolution in LTCI is gender pricing, which reflects the reality that women tend to live longer than men and are more likely to use their LTCI benefits. In addition to creating a more accurately priced product, gender pricing helps carriers manage customer expectations by ensuring their LTCI benefits will be there when they’re needed to provide care.

Simplicity & Affordability

Stemming from its early days, LTCI earned a reputation as a complicated product that was unaffordable for many families.

Today carriers are working to combat this misconception by designing straightforward, simple LTC solutions with fewer decision points, such as choosing total benefit and monthly benefit amounts. This makes it easy for advisors to help clients find the right amount of protection that also meets their own budgets.

Naturally, more affordable premiums are more appealing to clients. Designing today’s products to fit a range of personal budgets and benefit levels to fit personal needs are helping clients understand that LTCI doesn’t have to be an all-or-nothing decision.

Not only were they pricing a new product with long-term risks... they were doing so in an aggressive environment

Having some level of protection from the financial demands of long-term care is better than having none. It’s also creating a great opportunity for advisors to reach middle-income families and younger buyers. Whereas LTCI was originally thought to be a product for older clients, more than half of today’s applicants are between the ages of 55 and 64, according to the American Association for Long-Term Care Insurance (AALTCI).

Flexibility for Policyholders

Today’s LTCI is also combating the myth that LTCI only provides nursing home care. Nothing could be further from the truth.

Many of today’s LTCI products are dynamic and able to meet the changing needs and goals of policyholders. Providing flexibility to the policyholder is key in allowing them to receive the care they need in the setting that they prefer. LTCI can provide benefits for home care for those who prefer to age in place, as well as for care in an adult day care, hospice center, assisted living facility or nursing home. In fact, most newly opened LTCi claims are for home care, according to AALTCI.

Some LTCI products offer benefits that can also be used for informal home care, caregiver training, home modifications, or other products and services, as well as to reimburse certain out-of-pocket expenses. Many carriers also offer care coordination services and other tools to help policyholders and their families find local care providers, arrange care, file a claim, or simply access additional educational resources.

In addition to the flexibility of stand-alone LTCI, some in the industry have started offering alternative products, such as hybrid LTC, to meet the changing needs of consumers. These products combine LTC coverage with either life insurance or annuities in an effort to guarantee a benefit to a policyholder or their family.


Another area where LTCI is evolving to meet the needs of today’s clients and advisors is through expanding technological capabilities. It’s clear that the industry recognizes how leveraging technology can help both agents and consumers, as more carriers are offering tools such as:

  • E-applications and e-signatures to facilitate paperless selling
  • Personalized online quoting and quote-to-application connections
  • Application tracking and other tools to help advisors manage their book of business
  • Live-chat functions to allow advisors to get their questions answered in real-time

Today’s technological tools are helping advisors better serve their clients, overcome geographical hurdles and time constraints to reach more clients, and do business more efficiently and effectively.

No matter the challenges we face, whether they’re big or small, the LTCI industry will need to continually evolve to create a more stable future for LTCI. This includes looking at unique and innovative approaches to LTC solutions and remaining flexible and easy to do business with for both agents and consumers – an approach we believe has certainly helped drive our success and continued growth in a volatile environment.

Introducing enhanced products that offer greater flexibility to the market, along with stronger risk protection, will allow LTCI carriers to better meet our customers’ needs and be a major part of the overall asset management and financial planning solution.


Read Part 3: Bryan Langdon LTCi has evolved… have you?
Read Part 2: Phyllis Shelton 
Is LTCi in Triage?
Read Part 1: Henrik Larsen The Road Not Taken… Until Now


LifeSecure is dedicated to its mission of delivering an exceptional insurance experience. The company offers long term care and other supplemental health insurance products. LifeSecure is licensed in 46 states and the District of Columbia.