People will find LB products very attractive now, for the following reasons:
- Many LB policies are guaranteed. At this time of increased risk and conservatism, guarantees look great to both analytic and emotional buyers.
- The death benefit immediately replenishes some of the policyholder's estate that has withered in the recent stock market.
- LB products also protect against long term care needs. There has been increased costs of long term care business. The long term care industry will be a magnet for such higher expenses, which means that the cost of long term care services will increase. In turn, those higher costs mean that people will be more inclined to insure.
- LB policies are a better way to self-insure as the policy's beneficiaries risk their death benefit (generally over the first two years of needing long term care) but then inexpensive catastrophe coverage kicks in. The value of such a “stop-loss” type coverage is more appreciated in an era when asset value and income are less secure.
- Maximum long term care benefits can compound at three percent or according to a medical cost index depending on product. An index could be particularly attractive for those who fear inflation.
- Some LB products permit (out-of-work, perhaps) family members to be paid for providing care, which can be a nice alternative for generations who are concerned about one another or simply wish to be together.
- An inability to afford separate LTCI and life insurance protection may also accelerate interest in linked-benefit products.
- LB policies can do well in any economic environment. In a deflationary economy such as the 1930s, the increasing benefit is further leveraged by reduced cost of care. In an inflationary economy, a medical cost index helps. In a gyrating muddle economy, steady performance is appreciated.
- For people looking for guaranteed rates, this could be another safe haven for them.
- The tax advantages for employer-paid coverage may have increased value in the future if the USA grapples with spiraling debt by increasing tax rates.