Mr. Long Term Care
Let Care be our Long Term Commitment
I can safely say that the purchase of my LTC insurance was the wisest and most forward-thinking, financial decision of my life. - Mr. LTC

Do your know someone who required or will soon require long term care?
"After age 65, Americans have more than a 70% chance of needing some form of long-term care."
-American Society on Aging

"An estimated 12.1 million Americans need assistance from others to carry out everyday activities."
- As noted on

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An Interview with Don Charsky

by Mr. LTC

Don Charsky, President:
Recently, this site reported that long term care sales rebounded in the latter part of 1999. That report included a comment from Don Charsky, president of LifePlans. Life Plans conducts research in the field of long-term care which helps to predict and minimize the risk inherent in the long-term care insurance industry.

Mr. LTC: You've talked about the long-term care insurance industry sales' rebounding in the last half of 1999. What did they rebound from?

DC: We here have done industry sales studies for the last 5 years, and in 1996 to 1997 we saw double-digit growth in premiums and in policies sold. In 1998 the policy count sales were flat and premium growth had slipped to single digits. We were curious about what would happen in '99. And in 1999 the industry did a bounce back.

Mr. LTC: Why?

DC: Most people believe that what happened was that the very large writers were successful in growing significantly, with the leadership - the major players - in the market in many instances being able to achieve significant growth which had been lacking in the last few years.

Mr. LTC: What had happened to minimize industry leadership?

DC: Part of the explanation as to why they hadn't been reaching their full potential was that they were preoccupied with the business of doing business, with the mergers and acquisitions that were going on. That tends to disrupt normal business opportunities.

Mr. LTC: Which players would you say had significant impact:

DC: All the companies we survey fall into three main categories: those which experience sales growth over 25% , those which experience 0-25% , and those whose growth is negative. The leaders - those in the top group - tend to be GE Capital Assurance, John Hancock, and Unum.

Mr. LTC: What other factors led to a more productive swing?

DC: We continue to see a marketplace which is more knowledgeable about long-term care, that's always helpful. Before, people had limited knowledge about the risk and about the product. There are more people out there selling, and the sale is being more efficient now, which leads to more interest, which leads to more appointments, and so on up the chain. You know, 25% plus is a huge growth rate for a company. There are more people out there (doing the marketing) and more effective marketing.

Mr. LTC: What's needed now to maintain this momentum and not slide back?

DC: What we need is to make it go faster - the question really is, how can we spur the development.

Mr. LTC: What are some things that could accomplish this?

DC: Well, above the line tax deductibility is being discussed, it's been proposed as legislation in Washington; and there was a proposal for federal employees to have a long-term care option. This makes people more aware. Other direct actions the government can take is as the educator. Education is key to development. The other things have to do with how we think about the market. Most of us in the business think about the target market as being from one specific age to another age. We need to broaden (our perception of) the market and get to younger people and other types of people. We need to come up with other solutions.

Mr. LTC: Do you have anything specific in mind?

DC: There are a lot of ways to take long-term care and bundle it with other products. For instance, unbundling the risk part and focusing on the benefit part - there are a number of ways to make it more attractive and more interesting to younger people.

Mr. LTC: How did you got started in long-term care?

DC: I've been in it for over 15 years. I'm an actuary by training.

Mr. LTC: Have you had any personal experience with a long-term care situation?

DC: Oh, yes. Personal experience is the great educator right now.

Mr. LTC: What can the industry do to guard against further backslidings?

DC: That's a good question, and good to leave for the last: what can we do to safeguard the industry. Regulations have done a lot to insure that the industry operates ethically, safely and fairly. The greatest risk is that we make good on our commitments and our promises. Long-term care is a very personal issue and a huge need, socially. If you look back on the last 15 years, the industry has done a tremendous job in improving the standards of the product and our conduct. I hope we can continue. Many people in the industry after the slow '98 year questioned the industry, and now many are saying that we moving in the right direction.

Mr. LTC: Do you have any comments about what happens when an insurance company sells blocks of business?

DC: Regarding selling blocks of business - in general, when insurers have sold blocks of business, the acquiring companies have been those that are committed to the market and are active players. As a general rule, policy holders tend to go to a better home than the one they may have come from. I don't want to downplay the significance on the people who have the policy. It's very important for insurers to make sure that they make good on the promises (in such situations). In most divestitures and mergers, the surviving entity is generally a good, financially strong entity, so the consumers may have benefited.