There seems to be quite a debate being waged between traditional long-term care (LTC_ products and hybrids of life and annuity products. The positive of this is the attention long-term care is receiving.
See also: LTCI: The new crop
I read comments like, “I’ll lose it if I don’t use it”. Yes, there is statistical chance that a client would pass away and not use the product’s benefits with the traditional LTC products. However, I don’t believe there actually is a large statistical chance, especially with long life expectancy and the utilization of home and community care services in a traditional LTC product. Also, these plans now allow the untrained, friends, and family care providers to be paid for these services from the policy by many of the carriers. When all is considered, use of LTC services will probably increase.
Yes, asset-based LTC products offer a” lock in” when purchased and there would be no future rate increases with that product. For some consumers, this is desirable. For many other potential clients, the single-premium deposit or purchase is just not in the retirement plan. Moving a large block of money to have dedicated to LTC coverage certainly is not for everyone. In certain situations, does the client understand that the first money to get used in a hybrid annuity long-term care claim is their own deposit?
See also: Taking care of our fathers’ generation