A. Standalone LTC policies are going out of fashion, as shown by the annual sales amounts below, for two key reasons:
1) Rising LTC premiums. Insurers have the right to raise premium in the future which makes it unpredictable.
2) Possibility of not needing the care. Not everyone will need long term care in one's life. If you don't need it, your premiums are wasted.
However, it doesn't mean long term care coverage is decreasing, consumers are actually turning to the Hybrid solution to cover themselves. A hybrid policy could be Life Insurance - LTC combo or Annuity - LTC combo.
Standalone LTC Life Insurance-LTC Combo Annuity-LTC Combo
2011 $550M $2,200M $285M
2012 $580M $2,400M $210M
2013 $406M $2,600M $260M
2014 $316M $2,400M $410M
2015 $216M $3,100M $470M
2016 $228M $3,600M $480M
Source: LIMRA
In next blogpost, we will answer the question - what are the benefits of the hybrid LTC solutions?