The long-term care insurance (LTCI) market is in disarray as large carriers keep raising premiums and the federal government's proposed alternative, the Class Act, has sputtered.
To fill the void for LTCI solutions, sales of hybrid products that combine life insurance and LTCI are soaring, according to Bloomberg Business Week.
Hybrid insurance products are among the most complex for consumers to evaluate on a cost-benefit basis. In most cases, the LTCI benefits represent only an acceleration of the life insurance policy's death benefit – not an increase in the total dollars paid out.
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Yet, LTCI riders can permanently increase policies' cost and make premiums prohibitively expensive for seniors in their later years, when coverage becomes most valuable. Consumers are seeking hybrids because they fear long-term care costs and don't see good stand-alone LTCI choices.
A financial advisor who acquires expertise in this market, including the ability to help consumers objectively compare all LTCI choices (hybrid and stand-alone), will capture new clients and a steady stream of referrals.
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