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How to find long-term care options in today’s marketplace - Part 2

By: Adam Bezman, Senior Director of Product and Innovation

With market exits from major long-term care carriers, how are consumers getting affordable access to these needed benefits? In this series, we will discuss two life and long-term care policy options. In particular, benefit restoration and a flexible death and long-term care benefit. Both provide a significant amount of value to the policyholder, but not all of these plan options are created equal.

In our first article, we discussed the benefits of choosing the right restoration rider. But what if there is a way to get both a death benefit and a long-term care benefit in the same policy that’s also affordable?

With the collapse of long-term care (LTC) insurance options and numerous carriers leaving the market, consumers are clamoring for options. At the same time, health insurance premiums are continuing to rise, and for some, they increased up to 50 percent this year—leaving consumers with less disposable income to spend on voluntary products like life and LTC insurance.1 Finding a policy with both life and an LTC option, at a good rate, can be a real challenge. 

While the first choice to save money may be to go without LTC coverage, especially for younger individuals, the need for LTC can arrive at any age. In fact, 75 percent of Trustmark’s LTC claims are for individuals under the age of 65.2

With millennial consumers coming of age and beginning to have children, their needs for financial protection are abundant. Affordable, hybrids that offer a combo approach for life insurance and long-term care benefits could be the answer. But, not all are the same. Keep an eye out for policies that offer flexible premiums and benefits which could prove to be very appealing to this younger population. 

Differences in needs from younger years to older years

Products do exist that take advantage of the needs one may have as a younger individual vs. an older individual close to retirement.

For example, what a 37-year-old mom with two kids may need today is very different than what she may need at age 70. To make hybrid life and LTC plans more affordable, some policy benefits can be flexible based on age. In this scenario, a product that provides coverage for both death and LTC is critical while her kids are growing up. Her need for a death benefit is likely to go down once she’s no longer working and the kids have moved out, but her need for LTC coverage will still be present. A product that provides both life and LTC coverage with a death benefit that reduces in retirement can give her what she needs while keeping her premiums in check.

Affordable Life and LTC 

The need for life and LTC coverage will always be there, but finding ways to help consumers account for the financial hardships that follow after those events can be challenging. 

The millennial population has begun to move more into the target market for a product like this. Many are now in their thirties and have begun to start families. And, their need for life benefits will reach well into their sixties. Reducing the death benefit later in life could provide consumers, including this younger population, exactly what they are searching for—affordability. In a high healthcare cost environment, affordable coverage can offer peace of mind to consumers that they have financial help when they need it. 

About the author: 

Adam joined Trustmark in March 2016. He is senior director of product and innovation for Trustmark's universal life insurance products. Adam has 15 years of product development experience in the insurance, health and food industries with prior experience at Life Fitness, a division of Brunswick and Kraft Foods, in addition to his experience at Trustmark. Health care premiums for 2018 set to go up by as much as 50 percent. Oct. 5, 2017.
2Trustmark’s book of business.

Posted on April 03, 2018 in Life Insurance

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