LTC Bullet:  Who Will Buy LTCI?

Friday  February 22, 2002


*** We may open a second session of the Center's LTC Graduate Seminar in Chicago to accommodate heavy demand.  Reservations must be made in advance.  If you have not already enrolled, but you would like to attend, and you can be flexible between March 4 or March 5, just hit reply and let us know.  We'll get back to you right away with details.  You'll find a description of the seminar at Thanks for a tremendous outpouring of interest in this event. ***

*** Items to be added Monday to our "LTC Week in Review" feature on the Center's donor-only website zone include:  "Alzheimer's Costs Rise As Disease Progresses," "CT Cuts LTC Funds," "Help for Caregivers (and Producers)," "Nursing Homes Sue Massachusetts," "CBO and the Budget PacMan, Entitlements." ***

Today's LTC Bullet gives our general readership a peek at content usually available only on the Center for Long-Term Care Financing's donor-only zone.  What follows is an example of a feature we call "The LTC Reader."  In The Reader, we give you brief summaries of the "must know" articles we find as we scour the trade and academic literature on long-term care. 

The LTC Reader, The LTC Data Base (featured in last Wednesday's Bullet), and our ongoing LTC Week in Review feature are only available to donor-only-zone Center contributors.  So, don't miss a single item as we post it.  To qualify, contribute $100 or more (annually) to the Center for Long-Term Care Financing (either online or by mail, instructions at; then email and give her your desired user name and password (up to 10 characters each.)  She will activate your gateway to The Zone usually within a day.  Zone In!

The LTC Reader #5:  Who Will Buy LTCI?

We want to bring to your attention an article on long-term care insurance published in a periodical our readership may not routinely review.  Following is a bibliographic citation, a contact number, and some excerpts.  We hope this information will help more LTCI producers assist more Americans to protect themselves from the financial risk of long-term care and to avoid dependency on public welfare. 

Source:  David L. Christopherson and Dennis N. Bristow, "Predictors of Readiness to Buy Long-Term Care Insurance among Seminar Participants," Journal of Financial Service Professionals, Vol. 56, No. 1, January 2002, pps. 57-68.  For subscription or reprint information, call the Journal's business office at 610-526-2525 or email them at

"…most financial service professionals today remain disappointed that their potential markets for LTCI have yet to emerge as rapidly as they had hoped."  (p. 57)

"Social policy researchers maintain that the market growth rate for LTCI has to date been far less than needed to 'support the needs of an aging population in an era of decreased public funding.'"  (p. 57)

"In interviews with 119 financiers, providers, and insurers of LTCI, the Center for Long-Term Care Financing found several factors that may be contributing go the slow growth of the market.  In roughly the order of their frequency cited, those reasons include:  consumer denial, misperceptions about state governments' spend-down requirements under Medicaid, misinformation about Medicare, consumer ignorance in general, the lack of stronger tax incentives to purchase LTC coverage, the bad reputation of earlier policies, consumers' fears about rate stability, an inefficient distribution system, poorly focused marketing plans, the lack of a celebrity national 'spokesperson,' the belief that LTCI is not a good 'investment,' and competition with prescription drug coverage for greater public awareness."  (p. 58)

"The objective of this study is . . . to focus . . . on those who attend LTCI seminars and to determine from among them which demographic and motivational factors predict a readiness to purchase an LTC policy contract."  (p. 58)

"After attending LTC seminars, roughly 20 percent of participants who do not already own a policy indicate that their probabilities of buying a contract in the next year are at least 75 percent.

"Freedom of choice in where one can receive LTCI benefits not only scores higher than any of the other four attitudinal questions surveyed, but it is most frequently mentioned  . . . by seminar participants as their most important concern.

"Among all respondents in this study, the mean age of those most likely to buy a policy (60.1)  is significantly lower than that of less probable purchasers.  A disproportionately high percentage of those most likely to buy falls in the group aged 55-64.

"Fear of dependence on others is more pronounced among women than it is among men.  It is also the strongest predictor of readiness to recommend the purchase of LTCI to others."  (p. 66)

"Surprisingly, whether or not a seminar participant's parent ever needed (or currently needs) LTC is not a significant predictor of readiness to purchase LTCI."  (p. 66)

"Younger ages, a strong fear of dependence on others, and high need for freedom of choice in where one can receive LTC combine in various interactions to form the most powerful predictors of the top quintile of seminar participants with the highest self-reported probability of buying an LTCI policy in the coming year.  With respect to their predictive power, these three independent variables overwhelm the obvious economic variables usually associated with stronger sales prospects (higher income, net worth, and home equity)."  (p. 66)

"…[A] number of observations seem justified . . ..   First, the importance of emphasizing how LTC coverage can insure one's freedom to choose where an individual can claim benefits should not be understated. . . .  Since the stigma of relying on welfare seems to be waning for those under age 65, it is important in seminars to 'sell against' the limitations of Medicaid by stressing the flexibility and freedom of choice offered by private LTCI.

"Second, it appears that the optimal target market of prospects most ready to buy LTC is growing younger than ever.  Retirement-planning seminar presentations promoted to those aged 55-65 may serve as especially efficient forums for educating participants about the benefits of LTCI . . .

"Third, agents might do well to ask participants at the close of each seminar to complete forms indicating not only the usual data (names, phone numbers, and ages) but also how strongly they agree or disagree with the following two statements, answers to which were found in this study to be the strongest predictors of readiness to buy LTCI:

"Scheduling follow-up calls first on those who answer these two questions most strongly in the affirmative should improve agents' sales productivity, especially among prospects aged 55-64."  (p. 67)