Ohio National, a big variable annuity provider, exits the annuity business

[scagnt83]

The problem with "new forms of insuring against LTC" is not that the new forms have less risk. The problem is the "new forms" (which are really nothing but new packaged versions of overpriced cash value life insurance) is the cost of the new forms.

If hybrids cost the same as traditional LTCi, there would be no market for traditional LTCi and hybrids would be selling like crazy.

Hybrids typically costs 2x to 4x what a traditional LTCi policy costs. AARP got it right:

What makes you think hybrids arent selling like crazy?

It all depends on your definition of cost. Most consumers do not consider it a cost when they have liquid access to their premiums plus interest.

 

[Mr_Ed]

It all depends on your definition of cost.

Only an insurance agent would say something so convoluted.

 

[Life Hawk]

Only an insurance agent would say something so convoluted.

That sounds more like an accountant...

And a good accountant would answer like this... "What do you want it to cost?"

 

[Mr_Ed]

It all depends on your definition of cost.

"It depends upon what the meaning of the word 'is' is."--Bill Clinton

 

[Mr_Ed]

Most consumers do not consider it a cost when they have liquid access to their premiums plus interest.

interest? really? how much interest do these hybrids pay?

 

[Allen Trent]

If hybrids cost the same as traditional LTCi, there would be no market for traditional LTCi and hybrids would be selling like crazy.

This is a couple years old, but LIMRA reports prove hybrids are by far the majority of the premiums insuring the "LTC/CIA" risks whether we like it or not. I believe in stand alone LTC, but consumers & agents must not because of the rampant increases in premiums, carriers leaving the market & the high % of declined cases and low % of people that want to buy after getting quotes. For some reason, it seems clients like the concept of hybrids compared to stand alone.

Edited to show 2016 LIMRA report. If I read it correctly, 74% of all LTC/CI policies/premiums being issued are hybrids compared to only 26% stand alone LTC.

 

[scagnt83]

That is a great info-graphic. Thanks for sharing.

 

[scagnt83]

interest? really? how much interest do these hybrids pay?

Obviously that depends on the product. Lots of variations out there at this point. All of them have different pros/cons/benefits/etc.

As Ive said before, the industry trend is and will be to insure people at younger ages with multi-benefit products.

 

[Allen Trent]

That is a great info-graphic. Thanks for sharing.

no problem. Better graphic attached showing hybrids are 2/3 of total policies sold per year & 93% of all premium paid per year. This came from the following NAIC report: https://www.naic.org/documents/cmte_e_mlwg_related_state_of_ltc_industry.pdf

 

[Mr_Ed]

As Ive said before, the industry trend is and will be to insure people at younger ages with multi-benefit products.

It's a trend that favors insurance companies, not consumers.