New John Hancock research indicates that lower price options increase purchase interest in long-term care (LTC) insurance among 45-65 year olds, especially at younger ages.

Overall, among individuals at all ages, the survey found that interest in buying a lower cost policy versus a traditional policy grew from 14 to 30 percent. For the group aged 45-51, the interest tripled from 11 percent to 36 percent.

The pricing study, conducted for John Hancock by The Forbes Consulting Group looked at the purchase interest in LTC insurance of 300 individuals, aged 45-65, who had a household income greater than $70,000 and investable assets of more than $100,000.

Except for the benefit increase option and corresponding price, the policies compared were the same, offering a three-year benefit totaling $164,000, and a 90-day elimination period. They were not identified as John Hancock policies, but the "traditional" policy reflected John Hancock's CPI inflation option which grows on a compounded basis according to increases in the Consumer Price Index and the "lower cost option," reflected a new option offered by John Hancock which grows gradually over time based on the performance of the general account that funds the policy.

For each example, respondents were given John Hancock's actual annual premium costs based on their current age. They were then shown illustrations of how potential benefit increases could differ between the two policies and how the respective increases related to the anticipated increase in the cost of care.

"This study confirmed our belief that interest in LTC insurance would rise, particularly among younger buyers, when less expensive alternatives are offered and explained. Perhaps this has been intuitively understood, but now there is data to prove that lowering the cost of LTC insurance is critical to making this coverage more accessible to a broader population," said Laura Vail Wooster, VP of Marketing, John Hancock Long-Term Care Insurance.

More than seven out of 10 (71 percent) agreed that they are personally responsible for preparing for any LTC services they may need. When asked more generally which philosophy for purchasing LTC insurance was the best fit:

• 64 percent said basic coverage at an intermediate price – I would pay some portion of LTC costs out of pocket

• 22 percent responded full coverage at the highest cost – I wouldn't have to pay any LTC out of pocket

• 14 percent said catastrophic coverage at the lowest cost – I would pay a significant amount of the initial cost of LTC out of pocket and would be covered for some amount after that New John Hancock research indicates that lower price options increase purchase interest in long-term care (LTC) insurance among 45-65 year olds, especially at younger ages.

Earlier this week, also released survey findings on consumer perceptions of long-term care. According to the survey most Americans significantly overestimate the cost of long-term care insurance, predicting the average annual premium for a healthy 55-year-old couple to cost $7,000 per year or more. According to the American Association for Long-Term Care Insurance, the actual cost is $2,700 per year.

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