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Life Insurance with Long-Term Care: A Product to Watch
Feb. 14, 2013
With an expected increase in the number of employers offering voluntary benefits and the development of healthcare reform on the horizon, 2013 will certainly be an interesting year for the voluntary benefits market. A recent article from BenefitsPro highlights seven voluntary products to watch in 2013. For the article, our very own Dan Johnson, Trustmark Voluntary Benefits Solutions’ Vice President of sales, marketing & product, provided insight as to why life insurance with long-term care benefits would be a product to watch.
Fewer Long-Term Care Options
Many providers have stopped providing long-term health care insurance as a stand-alone product due to a variety of factors including increasing healthcare costs and a lack of participation in the programs from diverse age groups. As Johnson comments in the article, “Their hope was when they originally priced the products, groups that implemented the product would spread out participation among more age groups within the active employee population. This did not occur as often as they assumed and it affected their spread of risk, rates and profitability. The continued escalation of healthcare costs, along with long-term healthcare facility cost escalation made these products unprofitable.”
Looking to the Future
While there are still carriers that provide long-term care insurance as a stand-alone product, concerns remain. Johnson explains, “The big question from brokers and employers who have been burned by this long-term care exit is, whether the products still being sold in the market are priced properly or will they be affected down the road with more exits to the market due to the products profitability.”
This is how hybrid models were born, by combining life insurance with long-term care benefits, to provide a dependable solution for employees. With the hybrid model, carriers are able to diffuse the risk across a much broader demographic. Dan notes, “With our universal life with living benefits product, we’ve been able to spread the risk across many insureds and age groups. We have 20-year-old employees buying this bundled product along with 65 year olds.”
Combining life insurance with long-term care benefits provides a solution where everyone wins and is a major reason why this hybrid product will be one to watch in 2013.
Other Products to Watch
Read the full article from BenefitsPro to get more details on the following products to watch in 2013.
- Critical Illness/Cancer
- Accident
- Hospital Indemnity and other gap plans
- Life and disability
- Dental and vision
- Legal benefits
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