LTCI update: multi-life products are strong

Phyllis Shelton, owner of LTC Consultants in Hendersonville, Tenn., says that in 2008 51 percent of LTCI sales took place at work sites and multi-life sales grew 47 percent between 2007 and 2008. One important reason for that growth: simplified underwriting.

“I did my own survey about a year ago with several carriers and found that at age 65, about 30 percent of the applications are declined; at age 75 it’s more like 50 percent,” she says. “When you move into the work site and there is simplified underwriting, some companies have four, five or six questions, versus full underwriting, and some companies even offer that to working spouses.”

Adaption of hybrids
Another trend Shelton has observed is the development of combination or hybrid products, such as annuities that are coupled with LTCI. She anticipates significant activity in this area but notes wide variation among the products. Consequently, she is moderating a conference in late May that will focus on hybrids. “My observations are that there are no two (products) exactly alike” she says. ” As far as the actual cost of the long term care insurance premium piece, it’s lower than a traditional plan, because you have to understand people are really using their own money at first and then they have the potential to buy extra time.”