A Report on the Actuarial, Marketing, and Legal Analyses of the CLASS Program. C. Socio-Demographic, Functional, and Cognitive Characteristics of Individuals Declined from Purchasing LTC Insurance

10/14/2011

Table 2 summarizes additional socio-demographic characteristics of individuals who were declined from purchasing LTC insurance compared to individuals who were issued policies. As shown, compared to new buyers, declined individuals tend to be somewhat older, more male, and much less likely to be employed. Regarding employment, the results suggest that in general, being employed -- which is also typically correlated with younger ages -- is negatively associated with underwriting declinations. The implication is that as a potential underwriting screen, the employment requirement does provide some level of protection.

  TABLE 2: Socio-Demographic Characteristics of Individuals Declined from Purchasing LTC Insurance and New Buyers of Insurance  
  Characteristics     Percent Declines     Percent New Issues  
Age2 64 57***
   Less than 50   5% 7%
   50-54 8% 15%
   55-64 40% 45%
   65-69 24% 17%
   70-74 12% 9%
   75 and over 12% 7%
Gender1
   Male 48% 43%***
   Female 52% 57%
Marital Status2
   Married 76% 76%
   Single 24% 24%
Employment Status2
   Employed 51% 71%***
   Not Employed 49% 29%
Source: Analysis of 2010 Underwriting Declination Database.
  1. Results of the Long-Term Care Underwriting Survey for the Individual Market in 2009. LifePlans, Inc. Waltham, MA November, 2010.
  2. Who Buys Insurance in 2005: A Fifteen Year Profile of Buyers and Non-Buyers of Long-Term Care Insurance, AHIP, Washington, D.C. 2006.

Note: *** Significant at the .001 level.

As mentioned, companies tend to focus on the medical, functional and cognitive status of individuals when deciding whether or not to issue a policy. Figure 4 below shows the percentage of individuals who were declined due to a functional or cognitive impairment.


FIGURE 4: Percentage of Applications Declined Due to Functional and Cognitive Issues

Bar Chart: Functional Impairment (2%); Cognitive Impairment (8%).


Clearly, agents are doing a good job in terms of pre-screening; only 2% of applicants present with ADL or IADL limitations. As well, individuals with current dementia are for the most part screened out of the applicant pool by agents. For the most part, the 8% of applicants who are declined due to cognitive impairment, are not yet exhibiting outward signs of dementia, but instead, are at the very earliest stages of cognitive decline.

Table 3 shows the relationship between age and various socio-demographic characteristics of individuals not able to purchase a policy due to health issues. Each age grouping is assigned a letter so that in the table itself, one can identify those variables which are significantly different from similar variables in other age groups. Thus, for example, the percentage of female declines in the under age 60 age group is significantly higher than what is found in the 60-69 and over 70 age groups. The key findings from the data are that:

  • Although relatively small, there is a higher percentage of individuals in the over age 70 group who are declined from insurance due to ADL and IADL limitations.

  • The rate of declines due to cognitive impairment is less than 2% for the under age 60 group, but more than one-in-four (27%) for the over age 70 group.

  • The rate of employment among declines is 74% for the under age 60 group and 26% for the over 70 age group.

TABLE 3: Relationship between Age and Socio-Demographic Characteristics of Underwriting Declines
  Age Category
Less Than Age 60 (A) Age 60-69 (B) Age 70 or Above (C)
  Count     Column  
N %
  Count     Column  
N %
  Count     Column  
N %
Gender Male 5992 40.5% 11658 50.4%A 4070 51.8%A
Female 8794 59.5%BC 11455 49.6%   3786   48.2%
Marital Status Married   8802   76.4%C   13735     78.0%AC   3458 68.6%
Single 2336 20.3% 3385 19.2% 1352   26.8%AB  
Divorced 158 1.4%BC 160 .9% 46 .9%
Widow 141 1.2% 175 1.0% 153 3.0%AB
Partner 83 .7% 148 .8% 26 .5%
ADL Loss No 7733 99.8%C 11411 99.8%C 3666 99.5%
Yes 17 .2% 25 .2% 20 .5%AB
IADL Loss No 7012 99.4%C 10650 99.3%C 3285 98.6%
Yes 43 .6% 70 .7% 46 1.4%AB
Cognitive Status Normal or No   8663   81.6%BC   12263 67.9%C 3050 54.9%
Screen            
Pass 1763 16.6% 4848 26.9%AC 1024 18.4%A
Impaired 188 1.8% 938 5.2%A 1485 26.7%AB
Employment Status   Employed 4583 73.8%BC 4131 44.6%C 798 26.4%
Not Employed 1627 26.2% 5135 55.4%A 2220 73.6%AB
Note: Numbers in specific cells that have letters next to them indicate that there is a statistically significant difference between that result and similar cells under other age categories. Thus, for example, within the age 60 group, 74% of the declines were employed and this is significantly higher than the corresponding percentages for the age 60-69 and over age 70 groups.

View full report

Preview
Download

"index.pdf" (pdf, 350.5Kb)

Note: Documents in PDF format require the Adobe Acrobat Reader®. If you experience problems with PDF documents, please download the latest version of the Reader®

View full report

Preview
Download

"appA.pdf" (pdf, 150.08Kb)

Note: Documents in PDF format require the Adobe Acrobat Reader®. If you experience problems with PDF documents, please download the latest version of the Reader®

View full report

Preview
Download

"appB.pdf" (pdf, 548.14Kb)

Note: Documents in PDF format require the Adobe Acrobat Reader®. If you experience problems with PDF documents, please download the latest version of the Reader®

View full report

Preview
Download

"appC.pdf" (pdf, 150.56Kb)

Note: Documents in PDF format require the Adobe Acrobat Reader®. If you experience problems with PDF documents, please download the latest version of the Reader®

View full report

Preview
Download

"appD.pdf" (pdf, 318.45Kb)

Note: Documents in PDF format require the Adobe Acrobat Reader®. If you experience problems with PDF documents, please download the latest version of the Reader®

View full report

Preview
Download

"appE.pdf" (pdf, 319.19Kb)

Note: Documents in PDF format require the Adobe Acrobat Reader®. If you experience problems with PDF documents, please download the latest version of the Reader®

View full report

Preview
Download

"appF.pdf" (pdf, 155.03Kb)

Note: Documents in PDF format require the Adobe Acrobat Reader®. If you experience problems with PDF documents, please download the latest version of the Reader®

View full report

Preview
Download

"appG.pdf" (pdf, 181.05Kb)

Note: Documents in PDF format require the Adobe Acrobat Reader®. If you experience problems with PDF documents, please download the latest version of the Reader®

View full report

Preview
Download

"appGa.pdf" (pdf, 151.02Kb)

Note: Documents in PDF format require the Adobe Acrobat Reader®. If you experience problems with PDF documents, please download the latest version of the Reader®

View full report

Preview
Download

"appGb.pdf" (pdf, 123.12Kb)

Note: Documents in PDF format require the Adobe Acrobat Reader®. If you experience problems with PDF documents, please download the latest version of the Reader®

View full report

Preview
Download

"appH.pdf" (pdf, 256.35Kb)

Note: Documents in PDF format require the Adobe Acrobat Reader®. If you experience problems with PDF documents, please download the latest version of the Reader®

View full report

Preview
Download

"appI.pdf" (pdf, 358.34Kb)

Note: Documents in PDF format require the Adobe Acrobat Reader®. If you experience problems with PDF documents, please download the latest version of the Reader®

View full report

Preview
Download

"appJ.pdf" (pdf, 1.21Mb)

Note: Documents in PDF format require the Adobe Acrobat Reader®. If you experience problems with PDF documents, please download the latest version of the Reader®

View full report

Preview
Download

"appJa.pdf" (pdf, 396.06Kb)

Note: Documents in PDF format require the Adobe Acrobat Reader®. If you experience problems with PDF documents, please download the latest version of the Reader®

View full report

Preview
Download

"appJb.pdf" (pdf, 313.17Kb)

Note: Documents in PDF format require the Adobe Acrobat Reader®. If you experience problems with PDF documents, please download the latest version of the Reader®

View full report

Preview
Download

"appJc.pdf" (pdf, 252.71Kb)

Note: Documents in PDF format require the Adobe Acrobat Reader®. If you experience problems with PDF documents, please download the latest version of the Reader®

View full report

Preview
Download

"appJd.pdf" (pdf, 261.97Kb)

Note: Documents in PDF format require the Adobe Acrobat Reader®. If you experience problems with PDF documents, please download the latest version of the Reader®

View full report

Preview
Download

"appK.pdf" (pdf, 186.22Kb)

Note: Documents in PDF format require the Adobe Acrobat Reader®. If you experience problems with PDF documents, please download the latest version of the Reader®

View full report

Preview
Download

"appL.pdf" (pdf, 788.88Kb)

Note: Documents in PDF format require the Adobe Acrobat Reader®. If you experience problems with PDF documents, please download the latest version of the Reader®

View full report

Preview
Download

"appM.pdf" (pdf, 249.45Kb)

Note: Documents in PDF format require the Adobe Acrobat Reader®. If you experience problems with PDF documents, please download the latest version of the Reader®

View full report

Preview
Download

"appN.pdf" (pdf, 7.72Mb)

Note: Documents in PDF format require the Adobe Acrobat Reader®. If you experience problems with PDF documents, please download the latest version of the Reader®

View full report

Preview
Download

"appNa.pdf" (pdf, 208.04Kb)

Note: Documents in PDF format require the Adobe Acrobat Reader®. If you experience problems with PDF documents, please download the latest version of the Reader®

View full report

Preview
Download

"appNb.pdf" (pdf, 6.96Mb)

Note: Documents in PDF format require the Adobe Acrobat Reader®. If you experience problems with PDF documents, please download the latest version of the Reader®

View full report

Preview
Download

"appNc.pdf" (pdf, 622.02Kb)

Note: Documents in PDF format require the Adobe Acrobat Reader®. If you experience problems with PDF documents, please download the latest version of the Reader®

View full report

Preview
Download

"appNd.pdf" (pdf, 211.36Kb)

Note: Documents in PDF format require the Adobe Acrobat Reader®. If you experience problems with PDF documents, please download the latest version of the Reader®

View full report

Preview
Download

"appO.pdf" (pdf, 2.01Mb)

Note: Documents in PDF format require the Adobe Acrobat Reader®. If you experience problems with PDF documents, please download the latest version of the Reader®

View full report

Preview
Download

"appP.pdf" (pdf, 9.15Mb)

Note: Documents in PDF format require the Adobe Acrobat Reader®. If you experience problems with PDF documents, please download the latest version of the Reader®

View full report

Preview
Download

"appPa.pdf" (pdf, 233.71Kb)

Note: Documents in PDF format require the Adobe Acrobat Reader®. If you experience problems with PDF documents, please download the latest version of the Reader®

View full report

Preview
Download

"appPb.pdf" (pdf, 253Kb)

Note: Documents in PDF format require the Adobe Acrobat Reader®. If you experience problems with PDF documents, please download the latest version of the Reader®

View full report

Preview
Download

"appPc.pdf" (pdf, 546.97Kb)

Note: Documents in PDF format require the Adobe Acrobat Reader®. If you experience problems with PDF documents, please download the latest version of the Reader®

View full report

Preview
Download

"appPd.pdf" (pdf, 505.4Kb)

Note: Documents in PDF format require the Adobe Acrobat Reader®. If you experience problems with PDF documents, please download the latest version of the Reader®

View full report

Preview
Download

"appPe.pdf" (pdf, 462.21Kb)

Note: Documents in PDF format require the Adobe Acrobat Reader®. If you experience problems with PDF documents, please download the latest version of the Reader®

View full report

Preview
Download

"appQ.pdf" (pdf, 285.57Kb)

Note: Documents in PDF format require the Adobe Acrobat Reader®. If you experience problems with PDF documents, please download the latest version of the Reader®

View full report

Preview
Download

"appR.pdf" (pdf, 797.76Kb)

Note: Documents in PDF format require the Adobe Acrobat Reader®. If you experience problems with PDF documents, please download the latest version of the Reader®