Individual long-term care insurance sales fell by a third in the first quarter, as consumers chose to spend their money on more immediate needs.

The 34% decline for the first quarter when compared to the fourth quarter in 2008 marks the second straight quarter where premium showed double-digit declines, according to LIMRA’s Individual Long-Term Care Sales survey.

Sales also sagged 32%, as did the average cost of coverage.

“Early indications suggest that individual LTCI sales have been hit harder by the recession than other insurance products,” said Karen Fisherkeller, LIMRA associate analyst for group and LTC product research, in a statement. “A difficult product to sell under the most favorable circumstances, the majority of the companies experienced declines 10% or greater, as consumers feeling the economic crunch, tighten their belts.”

Sales of new policies dropped 32% in the first quarter. The 48,438 policies sold in the first quarter followed a 24% decline in the last quarter of last year, LIMRA said.

The average cost of coverage has declined in the first quarter.  The average individual buyer in the first three months of the year paid $2,129 during the first year of coverage. That figure, according to LIMRA, marks a 3% reduction from the average first-year premium from the same period last year.

“The LTCI marketplace continues to face additional and sometimes chronic challenges, such things as rate increases, carrier exits, rating downgrades and prevailing consumer resistance to long term care planning in general,” Fisherkeller said.  “Even when the economy starts to turn around, LTCI carriers will need to address these issues before the industry will see real, sustainable growth.”