Data-Driven Pre-Claim Programs Bend the LTCI Claims Cost Curve, New Report Shows

Our partner Nolan Tully recently co-authored a research report, “Data-Driven Pre-Claim Programs Bend The LTCI Claims Cost Curve,” with Assured Allies. In the report the authors discuss an evidence-based program to reduce aging-related disability and help long-term care insurance (LTCI) policyholders remain independent longer.

In the report, Nolan along with Assured Allies’ Afik Gal (co-founder & president) and Andy Freedman (vice president, client experience), detail further:

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2024 Intercompany Long-Term Care Insurance Conference

Faegre Drinker is delighted to sponsor and speak at the 2024 Intercompany Long-Term Care Insurance (ILTCI) Conference, coming up March 17-20 in San Diego. This annual event draws hundreds of attendees from insurance, financial, and other business sectors, and serves as a platform fostering collaboration among insurance regulatory authorities, educational institutes, actuaries, and others with interest in long-term and extended care insurance. We look forward to seeing you in San Diego!

During the conference, Faegre Drinker will be well represented by members of our LTCi team who will be speaking on the following topics:

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See You Soon! ILTCI 2023 Annual Conference

In just over a week, members of Faegre Drinker’s LTCi team will attend the 2023 Intercompany Long Term Care Insurance Conference in Denver. We are proud to once again support ILTCI as a diamond-level sponsor of the conference and our team will be presenting on a number of panels throughout the Conference. We look forward to connecting with our colleagues and friends throughout the industry. Make sure to check out our team members on the following panels!

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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.

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Long-Term Care Insurance Policy Sales Declined in 2020

The number of people who purchased traditional long-term care insurance policies last year dropped significantly compared to previous years, based on new figures released by the American Association for Long-Term Care Insurance (AALTCI).

AALTCI reports that at its peak in 2000-2001, sales of traditional LTCi policies soared to more than 700,000. Numbers have fallen over the last two decades and hit their lowest point in 2020 with just 49,000 policies sold. AALTCI says while the need for LTCi hasn’t changed, “more people are opting for a linked-benefit product such as a life insurance policy that can also pay long-term care benefits.”

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Examining the State of the Long-Term Care Insurance Hybrid Market

Join us June 30 for a discussion about the current state of the LTCi hybrid market and its future. Cheri McCourt, assistant general counsel at Northwestern Mutual, will join partners Sandy Jones and Nolan Tully to share their insights on LTCi hybrid issues including:

  • A market shift towards brisk sales of hybrid products and away from stand-alone LTCi
  • Key features of LTCi hybrid products and related legal/regulatory considerations
  • The future of the LTCi hybrid market, including:
  • Can products be designed to reach the middle market?
  • Can this product fill the LTC funding gap or even reduce population-wide reliance on Medicaid for LTC?
  • Are there products or features that could enhance the usefulness of hybrid products by, for instance, introducing wellness incentives for policyholders?
  • Litigation risks to riders/hybrids connected with sales and product confusion

To learn more and to register click here.

Interest in Hybrid Life-LTC Products Increases Due in Part to COVID-19 Pandemic

The pandemic shifted the way a lot of Americans view long-term care and insurance according to a new LIMRA survey.* LIMRA says more than a quarter (26%) of the people it surveyed say they are “extremely or very likely” to consider a combination/hybrid life product when shopping for insurance (a life policy with an LTCi component). In 2019, that number was just 17%. More than a third (36%) said they were “somewhat likely” to consider it.

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Long-Term Care Insurance Market Updates

We write on a few articles from the past week that we found interesting.

A recent article from Susan K. Neely, President and CEO of the American Council of Life Insurers, “Helping Older Americans Stay in Their Homes,” looks at challenges facing the long-term care insurance market as COVID-19 concerns continue and more and more people consider long-term care their greatest financial concern behind retirement savings. She also discusses how lawmakers are looking for ways to help more people get long-term care insurance.

Read the full ACLI IMPACT article.


In addition, we want to bring your attention to a new Best’s Market Segment Report, “U.S. Long-Term Care Product Performance Pressures Continue.” According to the report, from credit reporting agency AM Best, loss ratios in the LTCi market continue to climb and “poor performance from inadequate pricing is a significant issue for LTC insurers, owing to low interest rates, lapse rates, improving mortality, rising morbidity and policyholder utilization assumptions.”

The Report also looks more closely at certain factors driving rate increases nationwide, the evolution of combo products to meet growing coverage demand and efforts of the National Association of Insurance Commissioners to stabilize the LTCi market. Although, “AM Best views this as a very difficult task given the state-by-state insurance regulatory structures in place, and expects continued use of closed blocks to separate the legacy liabilities from the new ones in order to increase transparency to outside users of financial statements. AM Best also expects LTC insurers to trend toward simplified policy design and fewer assumptions embedded in their policies. Along with carriers slowing down on offering lifetime benefits coverage and inflation-adjusted features, insurers may also soon begin to disregard lapse rates as an underlying assumption for product pricing.”

Read Best’s Market Segment Report. (Subscription Required).


Finally, in “How low interest rates are changing LTC Insurance products,” Tom Rieske, Jr., Managing Director of LTCi Partners, discusses historical trends in LTCi sales (i.e., the trend toward sales of hybrid life and LTC insurance products) and recent reactions to the persisting low-interest rate environment (e.g., development of a hybrid IUL policy with LTC coverage).

Read the full LTCi Partners article.

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