LTC Product Sales Rise 12%: LIMRA

Long-Term Care Awareness Month 2017

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Stand-alone long-term care insurance (LTCI) may continue to be in the doghouse, but overall sales increased 12% in 2016, according to data from LIMRA.

LIMRA analysts report in a new commentary that premium revenue from new sales of three major categories of long-term care (LTC) planning products increased to $4.3 billion last year, from $3.8 billion in 2015.

New sales of individual stand-alone LTCI fell 13%, to $228 million, but sales of individual annuities that offer LTC benefits increased 2.1%, to $480 million.

(Related: The Long-Term Care Insurance Evolution Continues)

Sales of individual life-LTC hybrid products increased 16%, to $3.6 billion.

The LIMRA analysts presented a data series that starts in 2012.

Between 2012 and 2016, stand-alone LTCI's share of the overall LTC planning products market that LIMRA tracks fell to 5.3%, from 17%.

Advocates for stand-alone LTCI argue that it provides purchasers with much better, more efficient protection against catastrophic LTC risk.

Issuers of life-LTC and annuity-LTC hybrids say that selling those products is easier, because many purchasers like the idea of getting some benefits from the products even if they never need long-term care.

Insurers are hoping that combining LTC benefits with other types of base products will help moderate some of the risks associated with offering stand-alone LTCI.

LIMRA analysts note in the commentary that about 52% of Americans ages 65 and older will eventually need some type of long-term care.

"While we don't expect to see a rise in individual LTCI sales soon, combination products are a great way to fill the gap the decline in individual long-term care insurance sales has left while still meeting at least a portion of consumers' long-term care needs," the analysts write.

—Read 3 New Findings About Long-Term Care Planning Prospects' Emotions  on ThinkAdvisor.

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