LTC Sculpture for the People

Already, 2012 is shaping up to be the best year Debra Newman’s Minnesota firm, Newman Long Term Care, has had in a decade. One reason, says industry veteran Newman, is the growing popularity of shared-care LTCI products, which for couples represent a more affordable alternative to purchasing two stand-alone policies. Not only do they get adequate coverage, they get flexibility in how to use policy dollars and benefits.

Companies such as Newman’s and Riekse’s are also finding a broader market for a hybrid life insurance product that provides policyholders with the option of purchasing LTCI coverage. These so-called linked benefit or combination LI plus LTCI products are finding “a lot of traction,” says Newman, particularly among people who have money sitting in a savings account or CD, earning virtually nothing.

By using that money to purchase a single-premium whole life or universal life LI plus LTCI policy, not only do they get both life and long-term care coverage, they also can earn slightly more interest on their money than if they left it in a CD, for example, notes Riekse. What’s more, if they never need the long-term care coverage, their money stays inside the policy, where ultimately it may be transferred to heirs on a tax-favored basis. Such a combination is gaining appeal among wealthier people in their 60s, who have the liquidity to afford the premium (often $100,000 or more), and who, for estate planning reasons, see merit in protecting their assets from a long-term care event.

Beyond individual policies, Newman sees strong growth in the group LTCI market. These days, people are accustomed to purchasing insurance through their employer, so selling LTCI off the workplace platform makes sense, she says. The challenge for LTCI salespeople is getting their foot in employers’ doors. Newman’s suggestion: start by targeting top company officials and their executive benefits packages. “Make it attractive for the leaders [of the company],” she suggests. That often opens doors to entire employee groups.