Asset-based LTCI attracting younger buyers

A younger demographic is increasingly being attracted to asset-based long-term care insurance, according to research from the American Association for Long-Term Care Insurance.

AALTCI's numbers suggest that premium increased about 20 percent and the number of covered lives jumped 13.5 percent; more than half of male buyers of the coverage were under age 65, as well. Half of female buyers are also under age 65, up from the previous study's figure of 44 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," said AALTCI director Jesse Slome, in a release. He cites the example of Pacific Life and its new UL policy with LTCI benefits as one of the products recently released by a major player.

Slome says two market factors are increasing interest in the products: younger buyers who don't anticipate needing coverage for many years, but like the money-back provisions of the policies, and older buyers who've been priced out of the market for traditional LTCI.

“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,” said Chris Coudret, CLU, ChFC, vice president of OneAmerica. “In most cases, people make a single payment, effectively removing the risk of future premium increases.”

For 2011, the AALTCI's research found that the initial single premium face amount of almost three-quarters of policies purchased was $100,000.

As well, 96 percent of the new hybrid life-plus-LTCI policies did not include an option to bump up benefits to keep pace with inflation, while 96 percent of traditional LTCI policies did. 


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