Shifting Trends in Life-LTC Combination Products Due to COVID-19

At the recent 2021 Supplemental Health, DI & LTC Conference, hosted by LIMRA, LOMA, and the Society of Actuaries in early August, panelists discussed the current market trends of long-term care (LTC) products, particularly Life-LTC combination products. The market for these combination products has typically seen a steady 12% growth rate from 2009 to 2020, explained Mohammad T. Reza, CFA of New York Life. However, the pandemic had unprecedented effects in many regards and the Life-LTC market was no exclusion. The total number of life-LTC combination products sold decreased 7% in 2020.

According to LIMRA’s 2020 U.S. Individual Life Combination Products Annual Review, total new premiums for individual combination products decreased by 23% in 2020. A recurring theory for the decline is that the priorities of potential insureds shifted dramatically as a result of COVID-19, which impacted single-premium combination products the strongest at a decline of 41%. With Americans facing more immediate concerns for liquidity and cash during the pandemic, the demand for these life-combination products dampened, derailing the consistent upward trend the market had previously seen.

In reference to LIMRA consumer research, Austin Tewksbury, associate analyst for LIMRA Insurance Research, additionally noted factors in the complexity of the products as presenting a unique challenge to sales during the pandemic. However, looking ahead there is reemerging interest in purchasing life combination products and 2021 is already promising an upward trend. It will be interesting to see if the new Delta Variant of the COVID-19 virus derails the current upward mobility.

At a subsequent session of the 2021 Supplemental Health, DI & LTC Conference, panelists Peggy Fortson, President of Long Term Choices, Inc., and Gene Plauche, Regional Director of First Protective, described the LTC market to be “wide open” and life-LTC combination products in particular to be attractive for being generally more affordable. This is consistent with a May 2021 LIMRA study that found more than 6 in 10 Americans would consider a life combination product. Additionally, 26% were “extremely likely to consider life combination products.”

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About the Author: Kamaria Guity

Kamaria A. Guity clients seeking solutions related to insurance matters. She was a 2019 summer associate at Faegre Drinker and during that time she assisted with Chapter 11 resolution and non-compete/non-disclosure agreements. She also contributed to research efforts for our insurance team’s Handbook on ERISA Litigation. Read Kamaria's full bio on the Faegre Drinker website.

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