Popular LTCi Products - Part 1
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"Information is liberating." - Kofi Annan
Welcome to a special edition of LTC Insurance Community News. This is the first in a multi-part series where we will be covering popular types of LTC insurance solutions including:
Dear Actuary,
What types of long-term care insurance products are you finding to be most popular with LTC specialist agents?
– Inquisitive in Iowa
Dear Inquisitive,
I have worked closely over the past 15 years with agents whose primary business is long-term care insurance. Over the years, I have seen the most popular products offered by LTCi specialists evolve from a one-size fits all portfolio many targeted niches. The solution that may be most compelling for the 45-year-old male may not be the best fit for the 70-year-old female.
LTCi specialists today are using a suite of different insurance tools to solve their clients' varied needs.
This year's ILTCI conference , featured the latest product designs from a variety of insurance companies. A walk through the aisles was much like a walk-through Willy Wonka’s Chocolate Factory. It turns out there is more to a chocolate bar than just sugar and chocolate; likewise, there is more to LTCi policy designs than just a limited, cookie-cutter approach. Clients have many LTC planning options.
Broadly speaking, the three main ingredients that go into selecting the best product for a particular client are health underwriting, pricing, and benefits.
The top insurance products can typically excel at offering two of these three ingredients:
Which ingredients are most important to your clients? Let's dive in.
LTCI PRODUCT FLAVORS
Part 1 - Traditional LTCi
Good pricing and benefits, but tighter underwriting.
According to new product sales data, in this segment about half of clients chose traditional LTCi and half chose life hybrids with LTC extension riders.
Carrier specific product details can be found in the Buddy System at https://app.buddyins.com/individual
Traditional or standalone LTCi is treated like health insurance in product filings with products available in all 50 states. Their strength lies in their pay-as-you-go affordability, insurance leverage, funding flexibility, and tax advantages. Like term life insurance, auto, or home-owners insurance, they provide most or all of the policy premium as LTC benefits. The value proposition is the relatively lower cost outlay. The client is happy if they never to have to activate the policy, just like they'd be happy to never have to use their auto or home-owners insurance.
While the number of insurance companies offering new traditional LTCi products has consolidated to a few core carriers, there are still a wide range of offerings and plan designs. Older LTCi policies that were underpriced have required rate increases. Newer policies are more conservatively priced, yet still offer an outstanding value proposition from the best products. LTCi has a higher likelihood of price stability moving forward largely due to more careful health underwriting and plan designs.
领英推荐
? Planning Process: Traditional LTCi compared to the future cost of care.
Story: Marc and Sharada are a married couple approaching 50 years old, but in good health, exploring LTC insurance. They have two young children and a fast-growing technology company, both which leave them with less disposable income. Sharada is concerned that an unexpected health event may require either her or Marc to provide care for one another. Marc is eyeing her birthday as an opportunity to surprise Sharada with an LTCi gift.
?? Value Proposition: Traditional LTCi compared to self-funding for business owners.
LTCi Solution: They chose Traditional LTCi.
Traditional LTCi Breakdown
?? Sweet Spots:
?? Cautionary Areas:
?? Sample Products:
?? Up Next: Part 2: Life Hybrid with LTCi Extension
Join the community of LTC planning advocates at www.buddyins.com/partner
BuddyIns is a community of long-term care insurance specialists. We are dedicated to helping families fund the rising cost of extended care.
"There are only four kinds of people in this world—those who have been caregivers, those who currently are caregivers, those who will be caregivers, and those who need caregivers." --Former First Lady Rosalynn Carter
5 个月Wow - so articulate and what a great picture you painted for such a complex suite of solutions! Kudos. Everyone in the industry is super lucky to have you as a resource.
Analyzing your safe money needs in retirement
6 个月This is a great article and example. Thanks for sharing! I particularly liked that you shared the benefits of the S-Corp making the payments. I’ve talked to a couple business owners and not one has known that LTC premiums can be paid by the business and get a little tax break from it.
Business Development & Leadership Enthusiast | Insurance & Financial Services Specialist | Bilingual Advisor in Houston, TX
6 个月Excited to learn more about LTCi solutions. ??
Lighthouse Medicare+ Lighthouse Insurance Marketing
6 个月I've been looking for a resource to begin developing a LTCi business in addition to my Medicare business and I think I've found it in the Buddy system so thank you.
Exciting insights ahead! Looking forward to part 2! ?? Marc Glickman, FSA, CLTC