Only 54% of financial advisors currently recommend or offer long-term care policies to their clients, says a study from OneAmerica, an insurance and financial services provider.
The study, which surveyed over 400 financial professionals, aimed to gain insights into their behaviors and attitudes regarding LTC planning and the sale of LTC products. The results showed nearly half of the surveyed financial planners (46%) don’t recommend or offer long-term care protection to clients. About 35% of the advisors surveyed sell insurance only and 65% do holistic planning.
Most older people will need long-term care. The U.S. Department of Health’s Administration for Community Living estimates that almost 70% of individuals over age 65 will require some form of LTC services in their lifetime.
However, buying LTC policies can be very expensive. The survey noted that cost was the primary reason advisors don’t offer LTC insurance to clients. About 56% of respondents overall said price was a barrier. Lack of client interest and uncertainty about the need for LTC insurance were other reasons. Approximately two-thirds of respondents said they would be more likely to recommend it if the cost was lower.
The top reasons financial professionals sell LTC insurance
The study also revealed that the top two reasons financial professionals sell long-term care insurance align with clients’ motivations for purchasing it — to alleviate the financial burden of LTC events on their families (73%) and to provide financial security (67%).
Clients who actively inquire about LTC protection often have family members who have already experienced an LTC event. Additionally, those nearing retirement or who have recently faced health challenges or received health diagnoses express interest in LTC coverage.
Furthermore, the study demonstrated a preference among financial professionals for asset-based LTC protection over traditional LTC insurance. Eighty-five percent of the surveyed advisors had a positive impression of life insurance with LTC benefits, while 60% held a positive view of traditional long-term care insurance.
Financial professionals cited several reasons for recommending asset-based LTC protection, including the ability to pass on any unused amounts to heirs, the opportunity to combine life insurance with LTC benefits, and the tax advantages associated with asset repositioning.
The OneAmerica Long-Term Care Financial Professional Planning Study was conducted in collaboration with Hanover Research. The study involved an online survey of over 400 financial professionals in the United States who possess knowledge of long-term care insurance. Hanover Research is an independent research organization and is not affiliated with OneAmerica.
OneAmerica offers retirement plans, individual life insurance, annuities, asset-based long-term care solutions, and employee benefit plan products.