Product innovation isn't all it's going to take for the long term care insurance (LTCI) to grow.

A new study from Conning Research & Consulting shows the LTCI industry has a long way to go to break out of the small niche of current clients and serve the broader market.

"Despite considerable product innovation over the past few years, the long-term care insurance industry's solutions still do not resonate with the broader market," said Stephan Christiansen, director of research at Conning."

The LTCI industry has tried incremental product and pricing innovation, along with consumer education, to broaden its appeal. But those efforts alone won't make LTCI products appealing enough to a wider range of consumers so that they become buyers.

Thus, Christiansen said, it may be time for the industry to rethink the entire product offering in an effort to break new ground and change the value proposition.  

According to Terence Martin, a Conning analyst, LTCI is sold primarily by specialist agents to a niche market of "affluent and risk-averse seniors." Industry penetration is just 9 percent.

"Over the past few years, long-term care sales growth has declined in both individual and group markets despite the best efforts of insurers," Martin said.

The Conning Research study, "Long Term Care Insurance: Searching for the Value Proposition," quantifies the market need and potential market scope, and identifies the current product features and pricing challenges. The study also presents potential industry responses to flagging growth.