A shift in how U.S. residents pay for products that combine life insurance with long-term care (LTC) benefits may have disrupted U.S. individual life-LTC sales figures in 2018.
LIMRA analysts talk about the effect of the payment shift in their latest U.S. individual life-LTC market report, which is based on a survey of life-LTC policy issuers.
(Related: Life-LTC Hybrid Sales Soar: LIMRA)
LIMRA calls its report an “individual life combination product” report, because it combines data for individual life insurance policies that provide true long-term care (LTC) benefits with data for individual life policies that are designed to pay benefits when an insured suffers from a chronic illness.
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About 64% of the policies included in the survey come with provisions that accelerate the payments of benefits when the insured suffers from a chronic illness, rather than a benefit related to a need for long-term care.
LIMRA found that the number of “individual life insurance combination” policies sold in the United States increased 2% in 2018, to 404,000.
The total amount of new premium revenue associated with those combination policy sales fell 2%, to $4.3 billion.
In 2017, LIMRA reported an 18% increase in the amount of new premium revenue associated with new combination policy sales.
Traditionally, most people who bought traditional, stand-alone long-term care insurance paid their premiums on a monthly or annual basis.