Pre-retirees opting for life-LTC combo products

By Lauren McNitt


Rather than purchasing traditional long term care insurance, Americans in their 40s and 50s are buying life insurance with long term care benefits.

Younger buyers are attracted to these combination policies because they often come with options such as passing unused benefits on to named beneficiaries, income tax-free. In addition, in most cases a person will make a single payment, removing the risk of future premium increases, according to Chris Coudret, Vice President of OneAmerica, an insurer offering linked-benefits solutions.

The numbers (provided by a new study conducted by the American Association of Long Term Care):
  • 53 percent of buyers of hybrid policies were under age 65 in 2011
  • 42.5 percent of male buyers and 38.5 percent of female buyers were between ages 55 and 64
  • 1 in 10 buyers was between ages 45 and 54
  • Sales for insurers offering linked benefit products increased 14 percent in 2011.
As an advisor, do you agree there are benefits to these hybrid products that traditional long term care policies don’t offer? Are there benefits to LTCI policies that hybrid policies don’t offer?