Pandemic Spurred Interest in Hybrid Life-LTC Policies

Americans' interest in combination life insurance and long-term care (LTC) policies soared during the COVID-19 pandemic, according to a newly released survey.

How the Pandemic Drew Attention to Combo Life-LTC Policies 

LIMRA, a global life insurance research and advocacy organization based in Connecticut, found that interest in life insurance products with a long-term care component attached spiked 50% since 2019. 

About 60% of Americans surveyed in January 2021 said they would be at least somewhat likely to consider a combination product if they were shopping for life insurance, LIMRA reported. More than 25% said they would be very likely.

Images in the media of sick and elderly nursing home residents, vulnerable to COVID-19 and cut off from families, as well as the many Americans acting as caregivers for adult relatives during the pandemic, appear to be behind the trend. 

Millennials and Caregivers Most Interested in Combo Products

Count Millennials as the generation most interested in these combo products, with 35% saying it was "extremely likely" they would consider them. Baby Boomers trailed, with only 17% extremely interested. Almost a third of Boomers said it was unlikely they would consider combo life-LTC products in LIMRA's survey.

These older consumers might not realize that Medicare won’t necessarily cover their cost of care, noted Karen Terry, senior research director for LIMRA, in the organization's press release.

Unsurprisingly, consumers who said they faced "high levels of stress" acting as caregivers for a family member were most motivated, according to LIMRA’s survey. More than a third, or 36%, of these caregivers said they were very likely to consider buying a life-LTC combination product, LIMRA found. Interest among those who did not report high stress levels dipped to 21%.

Family members who have served as caregivers during the pandemic "recognize better than anyone the demands of providing care for aging parents or other relatives with declining health," Terry noted. "Their experiences as caregivers make life combination products, which offer financial protection against their own long-term care needs, that much more attractive."

Among the top reasons respondents gave for their interest in a combo product was the fear that long-term care costs would deplete or exceed their savings (35%), coupled with a concern that LTC policies on their own are too expensive (26%).

However, Jesse Slome, executive director of the American Association for Long-Term Care Insurance (AALTCI), cautioned against assuming that people who say they are interested in a product will necessarily buy it. In terms of COVID-related LTC trends, though, Slome said he sees increased consumer interest in policies that cover care at home versus solely in a skilled facility, as many of the combo products do.

Because policy cost is always a major consideration, there is also more interest in short-term care or home care insurance policies among those who cannot qualify for traditional LTC insurance for age or health reasons, Slome said in an email.