The head of a long-term care products distributor says the Covid-19 pneumonia outbreak and the resulting turmoil could have mixed effects on long-term care insurance planning products and product issuers.
Tom Riekse Jr., the managing director of LTCI Partners, talks about the effects of the situation in a new blog post on his company’s website.
The LTC advisors themselves can meet with clients over the telephone or through video conferencing software, and they can already submit the applications using electronic application systems, Riekse writes.
For the product issuers, he says, Covid-19 pneumonia could lead to decrease in benefits costs.
But, if alarm over Covid-19 leads to dramatically lower interest rates, that could make it more difficult for insurers to earn the rates of returns that were assumed in the product pricing, Riekse says.
Issuers of stand-alone long-term care insurance policies have the ability to pass some of the impact of inaccurate product performance assumptions on to the policyholders, in the form of premium increases, Riekse says.
Issuers of most life insurance policies that provide LTC benefits offer guaranteed premiums.