By Allison Bell
Traditional long-term care insurance (LTCI) could probably make a huge comeback a few years from now, when large numbers of the older baby boomers start needing long-term care (LTC) and wish they had paid more attention to LTCI agents.
For now, however, the products with buzz are life insurance-LTC hybrids and annuity-LTC hybrids.
The speakers drove that point home a few weeks back, when Hartford Financial Services Group Inc., Hartford (NYSE:HIG) and researchers from the Massachusetts Institute of Technology (MIT) AgeLab presented a press conference on aging at a well-attended press conference in New York.
The speakers talked about seniors who might eventually need help with the activities of daily living, and the cost of long-term care, but not about LTCI
. They talked about life insurance and annuities
Hartford never entered the LTCI market
The company does sell a LifeAccess Accelerated Benefit Rider feature that can be purchased along with a life insurance policy The rider can provide up to $109,500 per year to "policyholders who have been certified by a physician as needing care for a chronic illness, including those who have suffered a stroke or been diagnosed with Alzheimer’s," the company says.
Hartford received a patent on the rider strategy in July, and the company reported at the time that it was selling the Life Access rider with about 25% of the life insurance policies that it was selling.
John Diehl, a senior vice president in Hartford's wealth management division, says Hartford looked at the LTCI market and saw, in the mid-2000s, that the number of carriers in the market was shrinking.
The number of LTCI issuers has now dropped to about 30, from more than 100 a few years ago Diehl said.
Hartford also noticed that bad publicity LTCI carriers were getting as a result of price increases
"We were concerned that the pricing was not worked out well enough," Diehl said.
sells a life policy with an LTC benefits rider, "we know exactly what we're going to pay you; the only question is when we will pay you," Diehl says.
Critics of LTCI coverage contend that LTCI might not offer the same level of benefits or the same kinds of support services that a traditional LTCI program might offer.
Diehl argued that combining LTC benefits with a universal life policy can be helpful for the consumer because "the price is never going to go up."
A life-LTC hybrid also creates more certainty for consumers who may never end up needing LTC. If an individual buys LTCI and dies without ever needing to use the policy to pay for LTC, "I have a benefit that passes to my beneficiaries," Diehl said.
Some LTCI agents and brokers have been selling life and annuity products all along. Diehl said.
Others who have specialized in selling LTCI may prefer to diversify this year.
"I think they could learn to sell a new alternative," Diehl says.
Originally published on LifeHealthPro.com