Life-LTC Hybrid Sales Soar: LIMRA
July 6, 2018 by Allison Bell
Use of life insurance-based long-term care (LTC) planning arrangements soared in 2017, according to data from LIMRA’s LIMRA Secure Retirement Institute.
New premiums from life-LTC hybrids increased 18% over 2017 levels, to $4.1 billion, institute analysts report.
The number of policies sold increased 5%, to about 260,000.
The average amount of new premium revenue per new policy sold increased about 12%, to about $16,000 per policy, according to calculations based on institute data.
In 2017, about 25% of all new U.S. life insurance premiums paid for life products that offer LTC or chronic illness benefits.
Institute analysts based their figures on results from an insurer survey.
Terminology
Institute analysts include life products that offer either long-term care benefits or chronic illness coverage in their life-LTC hybrid product totals.
All of the products can be used to pay for long-term care, but the analysts themselves describe the numbers as “life combination product” numbers, rather than as life-LTC numbers.
The analysts do not include results for annuity-based LTC hybrids in the life hybrid data.
Premium Details
In the past, many life-LTC issuers offered the products only to consumers who could buy the coverage with a single premium payments. Critics said the single-premium payment requirements put the products out of reach of ordinary consumers.
In 2017, products with “recurring premium” payments, or multiple premium payments, accounted for 89% of the life hybrids sold, up from 61% in 2011.
The average recurring premium for a multi-payment hybrid product was $6,397, up 29% from the average recorded in 2016.
