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LTC Clients Live Longer, Lapse Less

par Andrew Rickard | July 29 2015 10:56AM

Americans who own long-term care (LTC) insurance tend to live longer than people who own other types of products such as life insurance and individual annuities. They are also less likely to cancel their policies.

photo_web_92A study conducted by industry research group LIMRA and the Society of Actuaries (SOA) looked at recent experience data for long-term care insurance in the United States. It relied on information that the SOA had collected from 22 long-term care carriers, representing approximately 75% of the lives in-force during the period 2000-2011. The study showed that mortality rates for long-term care policyholders were low in comparison to other kinds of insurance. It also revealed that LTC insurance had very low ultimate lapse rates in comparison to other insurance products.

“With 70% of Americans over 65 expected to need long-term care, this research is very important to help companies design their products to reflect consumer needs and actual behaviors around long-term care solutions,” says Marianne Purushotham, corporate vice president and research project director for LIMRA. “Our findings provide a better view of why a policy is terminated by separately studying the key factors driving lapse and mortality experience—such as age, gender, marital status, when the policy was issued and how often the premium must be paid.”

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