Many Now Use Life-LTC Hybrids to Pay for Care: Genworth

About 23% of U.S. residents getting long-term care may be using some form of private insurance to pay for long-term care services. Many are using stand-alone long-term care insurance (LTCI) coverage, almost as many are using products that combine long-term care with life insurance, and some are using both stand-alone LTCI coverage and life-LTC or annuity-LTC hybrids. Genworth Financial reported those findings Monday, in a summary of results from a recent survey that looks at how long-term care needs affect families. The survey sample included 299 people who were using long-term care, 963 family caregivers and 63 relatives who were not caregivers. Genworth released the report as long-term care advisors and LTCI issuers began the 2021 Long-Term Care Awareness Month outreach campaign. Brian Haendiges, president of Genworth U.S. life insurance, said in a comment, included in the report release announcement, that the results show everyone must do more to help families cope. "No one is immune to aging or its impacts, and this year's research further emphasizes the need for us to work together to solve the long-term care crisis before us," Haendiges said.

Stand-Alone Coverage vs. Hybrids

Here's a look at the LTC product type breakdown for survey participants who said private insurance was being used to pay for care:

• Stand-alone LTCI: 14%.
• Life insurance with a long-term care rider: 12%.
• Annuity with an LTC rider: 4%.

The sum of those numbers is more than 23% because many care recipients who are using any form of private insurance to pay for care are using two or more types of private LTC coverage. Genworth has been a major writer of stand-alone LTCI coverage. Genworth began commissioning surveys that explore the impact of caregiving on the caregivers in 2010. The company has been sponsoring similar surveys every three years ever since. Genworth did not provide 2018 survey data on use of life-LTC and life-annuity benefits. Reported use of stand-alone LTCI held steady, with 14% of participants saying stand-alone LTCI coverage was being used to pay for care in both in 2018 and earlier this year. Low interest rates and problems with pricing have hit the LTCI market hard in recent years, but insurers are still selling some new policies. For a look at the five states with new most new stand-alone LTCI insureds in 2020, see the slideshow above.

LTCI and Actual Costs

Recipients of care who took the survey said their LTCI coverage was paying an average of 32% of their out-of-pocket care costs.

Attitudes

Some LTCI claimants and agents have talked about problems with LTCI claim processes, but the survey results suggest that having LTCI coverage has helped many of the caregivers surveyed. About 66% of the family caregivers for care recipients who had LTCI coverage said that the recipients had planned well, and 61% of those caregivers said their own out-of-pocket costs were $500 or lower. Only 34% of the family caregivers for care recipients without LTCI coverage said the recipients had planned well, and only 48% said their out-of-pocket costs were $500 or lower. Pictured: Brian Haendiges (Photo: Genworth)