The sale of
asset-based long-term care insurance protection continued to grow significantly
according to research by the American
Association for Long-Term Care Insurance the national trade
organization. According to data
gathered from leading long term care insurance providers, premium increased nearly 20 percent and the
number of covered lives increased 13.5 percent.
"We
expect the sale of asset based or linked LTC products will continue to grow as
they offer some highly attractive benefits to a category of buyers looking to
protect their retirement savings," states Jesse Slome, AALTCI's
director. "The growth of sales will
only continue as more large players enter the marketplace.” Pacific Life recently introduced a universal
life insurance policy that provides long-term care benefits.
According to
the Association's annual study of new policy sales, more than half (53%) of
male buyers were under age 65. In the
prior year’s study, only 48 percent were under age 65. The percentage of women buyers under age 65
also increased to 50 percent, up from 44 percent in the prior year.
"We are
seeing two market conditions fueling growth,” Slome explains. “Younger buys facing a long time horizon
before needing care favor the money-back provision of these policies and older
buyers are being priced out of the market for traditional long-term care
insurance making this a more attractive option.” “At a time when long-term care is
increasingly top of mind, these life insurance-based solutions avoid the ‘use
it or lose it’ risk associated with traditional long term care insurance,” says
Chris Coudret, CLU, ChFC, Vice President, OneAmerica
one of the nation’s leading insurers offering linked benefit solutions. “In most cases, people make a single payment,
effectively removing the risk of future premium increases.”
For 2011, the
Association study found that the initial single premium face amount of policies
purchased was $100,000 or greater for nearly three-quarters (73%) of new
policies. In addition, the vast majority
(96%) of new Life+LTC policies issued did not include a benefit increase option
that bumped up available benefits to keep pace with inflationary growth of
costs. By comparison, the Association's
study of traditional individual long-term care insurance policy sales, found
that in 2011 some 96 percent included a growth option.
The complete
findings will be published in the Association's 2012 Long-Term Care Insurance
Sourcebook. Founded in 1998, the AALTCI
is the national trade organization established to educate both consumers and
financial professionals about the importance of long-term care planning.
