Sales could increase from better product education and new brand message
Pre-funded long-term insurance (LTCI) needs a new name if sales are ever going to pick up, according to the latest COVER Think Tank session.
The roundtable debate, discussing the future of LTCI, concluded that in addition to more Government-led education, the product needs to be seen as an Inheritance Tax (IHT) planning tool in order to increase sales. According to experts around the table, a new name could provide the solution.
Chris Ellicott, legal and technical manager at Age Concern Financial Partnerships, said: 'Long term care issues are important to Inheritance Tax planning. I think LTCI has a terrible name ' why not change the message so people think of it as a policy that can repair any damage done to your estate if you need care? I suspect a lot more people would want to sign up.'
Although the immediate needs market is growing, only 39,000 pre-funded LTCI plans have been sold in the UK to date. Speaking at the debate, Graham Fidoe, chairman of IFA Care, agreed the problem could lie in the product's name and said more emphasis on IHT issues was needed to boost the product's appeal.
'There are many people who throughout their life, all they have done, is buy a house. And what they want more than anything else is to pass that house onto their family. Once we've established that, we can ask how we can achieve it and what the risks are of it not happening. Then it opens the door to talk about issues such as LTCI.
'I would like to see insurers get behind a generic campaign to say: 'With this policy in place, you can do anything you want with the rest of your money. You can fly on Concorde, you can gift money to your children, you can do anything,' he said.
Caroline McQuade, financial practitioner at Inter-Alliance, said if advisers approach LTCI as an IHT issue rather than a care cost issue, sales could improve. 'If you talk to clients initially about needing care, they don't think it will happen to them. But if you approach LTCI as a solution that can ensure the client's assets don't disappear, then it can prove more effective,' she said.
