A U.S. arm of Hannover Re thinks backing life insurance-based long-term care (LTC) products can be a good business.
The Hannover Re arm, Hannover Life Reassurance Company of America (Hannover Re US), has agreed to reinsure Asset Care products written by a unit of OneAmerica, Hannover Re and OneAmerica announced today.
The State Life Insurance Company, a unit of OneAmerica, uses the Asset Care products to provide LTC benefits through an arrangement that combines whole life insurance, built-in death benefit acceleration features, and an LTC benefits extension option.
The Asset Care product can provide for lifetime coverage for LTC services, with guaranteed premiums, according to OneAmerica.
The Hannover Re US reinsurance agreement will apply to Asset Care business written starting Jan. 1, 2018.
Hannover Re US and State Life will “share all actuarial risks inherent in the OneAmerica product suite of Asset Care products,” the companies say.
Dennis Martin, president of individual life and financial services at OneAmerica, said in a statement about the arrangement that the company has seen tremendous growth in Asset Care product sales.
“As more people become aware of the significant benefits and guarantees offered by these products, we believe this growth will continue,” Martin said. “We’re committed to offering financial advisors and their clients industry-leading asset-based LTC products, using both whole life insurance and annuities, for many years to come.”
Other insurer also offer annuity-based and life insurance-based LTC combination products. The products are sometimes called LTC hybrid products, or asset-based LTC products.
OneAmerica began offering its Asset Care products in 1989.
Peter Schaefer, president of Hannover Re US, said in a statement of his own that Hannover Re US likes the fact that OneAmerica has many years of experience in the asset-based LTC market.
— For more about how the long-term care planning market works, see our Long-Term Care Planning archive, on ThinkAdvisor.