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Long-Term Care Insurance Trends in 2019

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Long-term care insurance

Three weeks ago, the leading American company selling long-term care insurance suspended sales of its lead product. Last week, the company restarted sales — but only by direct online contact. In other words, brokers and insurance salespeople are now cut out of the loop for the largest seller. What does that mean for the marketplace, and for consumers?

Genworth’s moves

On March 11, 2019, Genworth Financial suspended all sales of traditional, individual policies of long-term care insurance (or LTCI). A move like this is significant in the industry, since Genworth has the largest number of policyholders of any insurance company. In the past year, Genworth had raised its premiums by 53%, and had set aside an additional $327 million to cover unanticipated costs paid out on its policies.

The change last week was more subtle, and perhaps more interesting. After suspending sales of its product altogether, Genworth announced that it would resume sales — but only by online sales direct to consumers. No more brokers or insurance agents receiving commissions.

What does this mean about the industry? The entire field is contracting, with only about 17 insurance companies offering traditional policies at all. But the biggest change is probably a move away from traditional, individual long-term care insurance policies, and toward hybridized policies. Those policies are part life insurance, or part annuity.

The rise of “hybrid” LTCI policies

The new player in long-term care insurance is a hybrid policy, part LTCI and part life insurance. Basically, the consumer purchases a large life insurance policy — either with a single premium or a series of large payments. The policy will pay out to heirs at death, just like traditional life insurance. In the meantime, the policy owner can use its value to pay for long-term care if needed.

There are similar hybrid policies available in the annuity industry. Though they are less popular than the life insurance hybrids, they have also increased in sales in recent years.

These hybrid policies have been very popular in recent years. Even as traditional LTCI policy sales declined, hybrid policy sales surged. A 2017 Forbes article, for instance, reported that hybrid policies were about twice as popular as traditional LTCI in that year.

What kind of long-term care insurance is better?

Everyone’s situation differs, of course. It is impossible to generalize about the relative value of policies. But there is help available for anyone trying to navigate the market.

The AARP, for example, has identified some of the considerations and trade-offs. Of course, AARP is itself in the LTCI business, so its advice might sometimes be suspect. Still, it correctly identifies some of the costs of hybrid life insurance policies, and cautions that consumers should proceed cautiously.

Who should seriously consider hybrid long-term care insurance/life insurance? Perhaps a consumer who already owns a large life insurance policy. This might particularly be true if the original purpose for the policy is no longer relevant (like paying estate taxes, or caring for then-minor children).

One question to consider: if the hybrid policy requires a large initial investment, could you provide the same benefit by simply earmarking existing assets for long-term care coverage if needed? Would you anticipate comparable investment returns for that investment and a life insurance policy?

Meanwhile, the market continues to shrink

Regardless of growth in the hybrid LTCI marketplace, total sales of policies continues to decline. Is there a future for LTCI at all? No one is certain. But one thing is known: the existing insurance products have been seriously underpriced. Industry losses continue to mount.

We have written about LTCI before, and explained some of the market forces at work. We remain favorably inclined toward LTCI for our clients, but with cautions. A wise consumer will consider whether LTCI is important, and when to buy it.

What are the important considerations? There are a number of items to look at, including your aversion to risk, the possible dependency of family members, and others. But these two almost always stand out:

1. Can you self-insure? That is, do you have sufficient assets that long-term care costs will be relatively easy to meet with your assets and regular income? Long-term care costs might run $10,000 per month in Arizona, in the most expensive cases. Can you pay that for a period of years without using up your assets? If so, maybe long-term care insurance isn’t for you. If not, you would be well-advised to look into it further.

2. How old are you? Under age 60? You are likely a good candidate for LTCI. Over 70? Not as much. At some age (typically 65) the monthly premium costs for LTCI shoot up by as much as 8-10%. Besides, declining health may make robust LTCI policies simply unavailable.

What about you?

What does all this mean for you? If you have an existing long-term care insurance policy, good for you. If not, you might want to look into the available policies.

Oh, and one more thing — if you’re reading this and thinking “I need to talk to my mother and father about LTCI,” think again. You need to talk to your own insurance agent/broker (or go online on your own) to look into a policy for yourself.

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Robert B. Fleming


Robert Fleming is a Fellow of both the American College of Trust and Estate Counsel and the National Academy of Elder Law Attorneys. He has been certified as a Specialist in Estate and Trust Law by the State Bar of Arizona‘s Board of Legal Specialization, and he is also a Certified Elder Law Attorney by the National Elder Law Foundation. Robert has a long history of involvement in local, state and national organizations. He is most proud of his instrumental involvement in the Special Needs Alliance, the premier national organization for lawyers dealing with special needs trusts and planning.

Robert has two adult children, two young grandchildren and a wife of over fifty years. He is devoted to all of them. He is also very fond of Rosalind Franklin (his office companion corgi), and his homebound cat Muninn. He just likes people, their pets and their stories.

Elizabeth N.R. Friman


Elizabeth Noble Rollings Friman is a principal and licensed fiduciary at Fleming & Curti, PLC. Elizabeth enjoys estate planning and helping families navigate trust and probate administrations. She is passionate about the fiduciary work that she performs as a trustee, personal representative, guardian, and conservator. Elizabeth works with CPAs, financial professionals, case managers, and medical providers to tailor solutions to complex family challenges. Elizabeth is often called upon to serve as a neutral party so that families can avoid protracted legal conflict. Elizabeth relies on the expertise of her team at Fleming & Curti, and as the Firm approaches its third decade, she is proud of the culture of care and consideration that the Firm embodies. Finding workable solutions to sensitive and complex family challenges is something that Elizabeth and the Fleming & Curti team do well.

Amy F. Matheson


Amy Farrell Matheson has worked as an attorney at Fleming & Curti since 2006. A member of the Southern Arizona Estate Planning Council, she is primarily responsible for estate planning and probate matters.

Amy graduated from Wellesley College with a double major in political science and English. She is an honors graduate of Suffolk University Law School and has been admitted to practice in Arizona, Massachusetts, New York, and the District of Columbia.

Prior to joining Fleming & Curti, Amy worked for American Public Television in Boston, and with the international trade group at White & Case, LLP, in Washington, D.C.

Amy’s husband, Tom, is an astronomer at NOIRLab and the Head of Time Domain Services, whose main project is ANTARES. Sadly, this does not involve actual time travel. Amy’s twin daughters are high school students; Finn, her Irish Red and White Setter, remains a puppy at heart.

Famous people's wills

Matthew M. Mansour


Matthew is a law clerk who recently earned his law degree from the University of Arizona James E. Rogers College of Law. His undergraduate degree is in psychology from the University of California, Santa Barbara. Matthew has had a passion for advocacy in the Tucson community since his time as a law student representative in the Workers’ Rights Clinic. He also has worked in both the Pima County Attorney’s Office and the Pima County Public Defender’s Office. He enjoys playing basketball, caring for his cat, and listening to audiobooks narrated by the authors.