The emergence of some lifestage products designed specifically with boomers in mind is making LTCI a more inviting subject for advisors to tackle with clients. Jesse Slome, head of the AALTCI, identifies the following products as particularly advisor and boomer-friendly. Stay tuned, he says, because the field is likely to get much more crowded:
Leading Edge (John Hancock)
After a lukewarm initial reception, Leading Edge now accounts for about one-quarter of the company’s LTCI sales, says Hancock’s Gene Arsenault. Available in every state but California, Leading Edge is among the first LTCI products to provide compound inflation protection linked to the Consumer Price Index (CPI) rather than a flat percentage (such as the traditional 5 percent). Every year on the policy anniversary, a policy owner’s benefit and total pool of money is automatically adjusted according to the CPI. Not only is there no maximum increase, the benefit does not decrease if the CPI goes below zero. Instead it remains fixed at its current level until the CPI rises again.
Custom Care II Enhanced (John Hancock)
Available in 27 states (with five more to be added this fall), Hancock’s flagship LTCI product has undergone a boomer-friendly facelift, with a host of new features, many borrowed from the company’s Leading Edge product. This summer it added features such as caregiver support services, lifestyle benefit changes and the CPI-linked compound inflation option, plus an alternate services benefit to cover emerging care services and independent third-party review, which gives policyholders access to an arbitration process for claims disputes.
LifeSecure (LifeSecure Insurance)
Available in 35 states, the LifeSecure product from this wholly owned subsidiary of Blue Cross Blue Shield of Michigan includes a guaranteed future purchase option to increase the policyholder’s “benefit bank” (the pool of money available to cover LTC expenses; anywhere between $75,000 and $1 million) by 15 percent every three years. There is no additional medical underwriting required and rates are based on attained age at time of purchase. LifeSecure also features a budget-point pricing tool to calculate coverage levels based on target premium.
LTC LifeStage Advantage and Simple Advantage
Each available in more than 30 states, the two MetLife products include a buy-up feature called the Guaranteed Purchase Option (GPO) that allows the insured to purchase up to double the original total benefit amount and monthly benefit amount every three years, up to age 65, with no additional underwriting. Premium for the increase in coverage is at attained age rates. A minimum of 25 percent of initial coverage must be purchased each time the GPO is exercised. If the insured rejects two increase offers in a row, the rider terminates.