What You Need to Know
- The number of life-LTC combo policies sold fell 7% in 2020, to 421,000.
- The average premium per new combo product sale dropped 23%.
- The decrease in sales could be due to partly to pandemic-related sales challenges and partly to premium increases.
The COVID-19 pandemic may have hurt some U.S. consumers’ efforts to plan for future long-term care (LTC) needs.
Consumers bought only 421,000 individual life insurance policies that can provide LTC benefits, or similar types of benefits, in 2020, according to new LIMRA issuer survey data.
The number of life-LTC combination products sold was down 7% from the 2019 total.
Total combo product sales premium volume fell 23%, to $3.7 billion, and the average amount of premium revenue per new combo product sold fell 17%, to about $8,800 per policy.
Consumers can use two types of life combo products to pay for LTC services.
One is a policy with a provision that pays benefits to people who have a clear-cut need for LTC services, meaning that they suffer from severe dementia or need help with two or more activities of daily living.
Another type of combo policy pays benefits to an insured who suffers from a serious chronic illness.