For many years we have had a few types of insurance. There's term life, universal life, whole life and indexed universal life, among others. They generally did the same thing, which was paying if you died and maybe building some cash value. Other than that, the differences were in rates and performance.
And then 2008 came around and the industry had a bit of a shake up. Companies offering life insurance as well as long term care began to change benefits of the latter. And as the years went by, the bond rates stayed very low, affecting dividends and profits. These carriers had to make changes.
Stand alone long term care (LTC) policies were stripped of certain benefits like lifetime payouts. Some companies got out of the LTC business altogether. Some maintain their business on the books but not writing new business, while others just sold their books to other companies.
Demand for the product, along with a slow but increasing awareness, was still there. Around this time, a few hybrid products began to get marketed. I was working at a very large life insurer at the time and we were told to poo poo any hybrid products if a prospect asked. For example, we were to compare a life/LTC product to those TV/VCR's that never quite worked as good as a separate system.
But it did address the number one objection to buying long term care coverage. And I'll cover that in part 2, so be sure to subscribe.
Chris Castanes is the president of Surf Financial Brokers, as well as a professional speaker helping sales people be more productive and efficient.