Asset Based Long Term Care Insurance Attracting Younger Buyers

More than half of male buyers are under 65

Los Angeles, CA – 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 insurers, 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 American Association for Long-Term Care Insurance is the national trade organization established to educate both consumers and financial professionals about the importance of long-term care planning.
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