By Cyril Tuohy
Specialty insurer LifeSecure Insurance has announced an update to its long-term care insurance (LTCi) policy that includes a shared care benefit rider for couples.
In addition to the shared care rider, the company announced this new product, named LTC II with Shareability Option, adds an international coverage benefit, online tools including electronic applications and signatures and two multi-life, long-term care programs for group coverage.
“In enhancing our original LTCi coverage, we’ve designed a simple and flexible next-generation product that will deliver confidence to agents and peace of mind to families of all budgets for years to come,” said Kevin Stutler, interim president and chief executive officer of LifeSecure.
LTC II is available in 40 states with approval pending in others, the company also said in a statement.
After a period of contraction in the long-term care market where many nationwide LTCi underwriters retrenched in search of more profitable lines, or pulled back in areas of LTCi such as group coverage or standalone polices, the remaining companies have an opportunity to fill a need.
Many insurers offering LTCi, like LifeSecure, are doing so by making their LTCi more flexible and altering the coverage to give it more appeal. Other carriers are bundling their LTCi coverage by adding long-term care riders to their life insurance policies.
For example, AIG last week announced the launch of Asset Protector, a product that combines a death benefit, long-term care coverage and longevity insurance.
LTCi, however, remains expensive for many consumers and the coverage – particularly standalone LTCi – remains a tough sell for many carriers. Unlike life insurance, which offers a death benefit because every person eventually dies, not everyone needs long-term care.
Some people die relatively young, while others never need the coverage.
Long-term care experts see the need for LTCi rising as an aging U.S. population looks for ways to cover the cost of nursing homes, assisted living and in-home care.
The more private insurers can cover the costs of long-term care, the less the nation will have to rely on taxpayer-funded programs like Medicare and Medicaid, according to long-term care experts. Private LTCi, however, will never be cheap enough to ever take the place of large public programs.
In 2011, total spending on long-term services and supports (LTSS) was $317.1 billion, according to the Centers for Medicare & Medicaid Services. Private insurance paid $19.3 billion, or only 6.1 percent of that total.
By contrast, Medicaid paid $133.5 billion or 42.1 percent of total LTSS spending in 2011.
Cyril Tuohy is a writer based in Pennsylvania. He has covered the financial services industry for more than 15 years. Cyril may be reached at [email protected].
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