Latest NY Life Product a Nod to Growing Combo Life-LTCi Market

Seeking to capitalize on rising demand for combination life insurance/long-term care products, New York Life is introducing a universal life policy giving owners access to nearly five times the premium for LTC expenses.

A 60-year-old buyer paying a single premium of $100,000 for an Asset Flex policy has access to as much as $461,695 for covered LTC services and/or $153,899 in life insurance protection, NY Life said.

Life insurance-LTC combo products pay for LTC expenses by accelerating the payment of the death benefit.

“Most long-term care policies being sold today are hybrid products like this one and that trend will definitely continue going forward,” said Jesse Slome, executive director for the American Association for Long-Term Care Insurance (aaltci.org).

Insurers are linking LTC and other benefits to their life and annuity product portfolios, and agents and consumers can expect even more variety in the benefit options in the future, Slome said.

As the name Asset Flex implies, the new product injects more flexibility into spending on LTC services, a feature that consumers and advisors have been seeking.

“Not only does this product offer valuable LTC coverage, it also provides important life insurance protection that guarantees the policy owner will receive meaningful benefits for the assets they repositioned,” said Mohammad T. Reza, corporate vice president of New York Life, in a news release.

Combination Product Sales Rise

By linking LTC benefits with a life insurance policy, the long-term care insurers are hoping to boost sales as demand for stand-alone LTCi policies dwindle and insurers stop selling stand-alone LTC contracts, as John Hancock did last year.

Individual stand-alone LTCi policies sold in 2014 dropped to 129,000 from a high of 754,000 in 2002, according to a May 2016 report published by the Center for Insurance Policy and Research.

In 2013, insurers sold 305,068 individual life and annuity products with accelerated LTC benefits. That is more than four times the number (72,736) of these policies sold in 2009, the CIPR said.

Offering more combination products is one way to stimulate growth in the LTCi market, the report concluded.

Agents’ Work Cut Out for Them

But with more flexibility comes more work to figure out how much value a hybrid policy can deliver to the policyholder.

Consumers want to figure out how to compare one combination life-LTC policy with another because they can vary greatly, Slome said.

Agents and producers will need to specialize and help consumers understand different permutations to life insurance with linked benefits, Slome said.

Asset Flex is neither the most generous nor the least generous of the combination policies available in the market, Slome explained.

New York Life distributes products via thousands of captive agents and the company can afford to take a conservative approach to benefits linked to Asset Flex, he said.

InsuranceNewsNet Senior Writer Cyril Tuohy has covered the financial services industry for more than 15 years. Cyril may be reached at cyril.tuohy@innfeedback.com.

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Cyril Tuohy is a writer based in Pennsylvania. He has covered the financial services industry for more than 15 years. He can be reached at cyril.tuohy@innfeedback.com.