Younger long-term care insurance (LTCI) prospects might prefer lower premiums to traditional compound inflation protection features.
Marketers at John Hancock, a unit of Manulife Financial Corp. (NYSE:TX), have published data supporting that conclusion in a summary of results from a recent survey the company commissioned.
A consulting firm gathered data on 300 U.S. individuals, ages 45 to 65, who had an annual household income over $70,000 and more than $100,000 in investable assets.
The firm asked the participants about interest in an LTCI policy that included an inflation protection feature linked to growth in the Consumer Price Index (CPI) and a policy that included an inflation-protection feature linked to the performance of a company investment account.
For an insurer, an investment-performance-linked adjustment feature is believed to be cheaper and easier to write than a traditional CPI-linked inflation adjustment feature.
The marketing firm based the prices of the policies on the prices of actual Hancock policies that include the CPI-linked inflation adjustment feature and the cheaper, investment-linked adjustment feature.