4 Life-LTC Combo Product Ideas That Steve Schoonveld Would Like to Correct

1. Combo products lack inflation protection.

About 80% of the MoneyGuard policies sold come with inflation protection, Schoonveld said.

2. The claim-processing offices of insurers in the LTC benefits area are welded to their fax machines.

Lincoln Financial already has an iClaim electronic document filing system, and many competitors in the stand-alone LTCI and combo product markets either have or are building similar electronic filing systems, Schoonveld said.

3. Standardized dementia severity or long-term care needs severity codes would revolutionize claims.

Because LTCI policies and combo products pay benefits when the patient is unable to perform certain activities, rather than because of a medical diagnosis, having diagnosis codes would have little effect on claim processing, Schoonveld said.

4. Adding long-term care provider networks would make long-term care and LTC financing arrangements cheaper.

Schoonveld said that Lincoln Financial already offers policyholders access to discounted provider networks, but that there’s no good way to create strong incentives for LTCI policyholders to use in-network providers, because typical policies may pay off 30 years after the type the policies were written.

The nature of that timeline means that it’s hard to know what long-term care will be like when the insured people go on claim, Schoonveld said.

It’s even more difficult to know whether specific providers or provider networks will still be around, Schoonveld said.

— Read NAIFA Launches Long-Term Care Planning Center, on ThinkAdvisor.

— Connect with ThinkAdvisor Life/Health on LinkedIn and Twitter.