We would love to hear from you. Click on the ‘Contact Us’ link to the right and choose your favorite way to reach-out!

wscdsdc

media/speaking contact

Jamie Johnson

business contact

Victoria Peterson

Contact Us

855.ask.wink

Close [x]
pattern

Industry News

Categories

  • Industry Articles (21,155)
  • Industry Conferences (2)
  • Industry Job Openings (35)
  • Moore on the Market (414)
  • Negative Media (144)
  • Positive Media (73)
  • Sheryl's Articles (800)
  • Wink's Articles (353)
  • Wink's Inside Story (274)
  • Wink's Press Releases (123)
  • Blog Archives

  • March 2024
  • February 2024
  • January 2024
  • December 2023
  • November 2023
  • October 2023
  • September 2023
  • August 2023
  • July 2023
  • June 2023
  • May 2023
  • April 2023
  • March 2023
  • February 2023
  • January 2023
  • December 2022
  • November 2022
  • October 2022
  • September 2022
  • August 2022
  • July 2022
  • June 2022
  • May 2022
  • April 2022
  • March 2022
  • February 2022
  • January 2022
  • December 2021
  • November 2021
  • October 2021
  • September 2021
  • August 2021
  • July 2021
  • June 2021
  • May 2021
  • April 2021
  • March 2021
  • February 2021
  • January 2021
  • December 2020
  • November 2020
  • October 2020
  • September 2020
  • August 2020
  • July 2020
  • June 2020
  • May 2020
  • April 2020
  • March 2020
  • February 2020
  • January 2020
  • December 2019
  • November 2019
  • October 2019
  • September 2019
  • August 2019
  • July 2019
  • June 2019
  • May 2019
  • April 2019
  • March 2019
  • February 2019
  • January 2019
  • December 2018
  • November 2018
  • October 2018
  • September 2018
  • August 2018
  • July 2018
  • June 2018
  • May 2018
  • April 2018
  • March 2018
  • February 2018
  • January 2018
  • December 2017
  • November 2017
  • October 2017
  • September 2017
  • August 2017
  • July 2017
  • June 2017
  • May 2017
  • April 2017
  • March 2017
  • February 2017
  • January 2017
  • December 2016
  • November 2016
  • October 2016
  • September 2016
  • August 2016
  • July 2016
  • June 2016
  • May 2016
  • April 2016
  • March 2016
  • February 2016
  • January 2016
  • December 2015
  • November 2015
  • October 2015
  • September 2015
  • August 2015
  • July 2015
  • June 2015
  • May 2015
  • April 2015
  • March 2015
  • February 2015
  • January 2015
  • December 2014
  • November 2014
  • October 2014
  • September 2014
  • August 2014
  • July 2014
  • June 2014
  • May 2014
  • April 2014
  • March 2014
  • February 2014
  • January 2014
  • December 2013
  • November 2013
  • October 2013
  • September 2013
  • August 2013
  • July 2013
  • June 2013
  • May 2013
  • April 2013
  • March 2013
  • February 2013
  • January 2013
  • December 2012
  • November 2012
  • October 2012
  • September 2012
  • August 2012
  • July 2012
  • June 2012
  • May 2012
  • April 2012
  • March 2012
  • February 2012
  • January 2012
  • December 2011
  • November 2011
  • October 2011
  • September 2011
  • August 2011
  • July 2011
  • June 2011
  • May 2011
  • April 2011
  • March 2011
  • February 2011
  • January 2011
  • December 2010
  • November 2010
  • October 2010
  • September 2010
  • August 2010
  • July 2010
  • June 2010
  • May 2010
  • April 2010
  • March 2010
  • February 2010
  • January 2010
  • December 2009
  • November 2009
  • October 2009
  • August 2009
  • June 2009
  • May 2009
  • April 2009
  • March 2009
  • November 2008
  • September 2008
  • May 2008
  • February 2008
  • August 2006
  • Annuities/LTC Combos More Than Double Sales

    April 27, 2015 by Linda Koco, linda.koco@innfeedback.com

    Annuities with long-term care (LTC) insurance benefit features sold nearly $320 million in total first year premium in 2013, according to new research conducted by Milliman and published by the Society of Actuaries (SOA). That is based on six such plans offered by five carriers.

    The $320 million total might seem like a drop in the bucket to those accustomed to seeing industry-wide annuity production in the billions of dollars. But this is for an annuity line that is still quite new.

    The 2013 figure is up from $44 million in 2012 (when just five plans were tracked), and from nearly $25 million (for the same five plans) in 2011, according to the research findings. When the researchers looked at the same five plans over all three years, the 2013 figure is still up noticeably — to $120 million — compared to the prior years studied.

    Several product developers have been predicting a ramp-up of this kind would occur once consumers learned that annuities with LTC benefits were available.

    Backdrop

    Also called annuity/LTC combo policies, annuity/LTC linked-benefit policies, hybrid annuities and asset-based LTC policies, the products began to spark marketing interest after a provision in the Pension Protection Act (PPA) took effect in 2010.

    That provision allows use of annuity cash value appreciation for qualified LTC expenses without subjecting the gains to federal income tax.

    The products got another boost in early 2013, when President Barack Obama signed the American Taxpayer Relief Act into law. Among other things, that law repealed the unpopular CLASS Act which would have provided certain LTC benefits to taxpayers. The repeal removed a potential barrier to sales of private sector solutions for LTC funding, such as annuity/LTCs.

    As a result of those developments, and also of the aging of baby boomers, expectations have been rising that combo annuity products would soon find their place in the senior market sun — alongside similar life/LTC combination polices and also alongside the more expensive but more comprehensive standalone LTC policies.

    The annuity products have a considerable way to go before being considered mainstream, but the new Milliman/SOA report shows they are definitely in growth mode.

    Carl A. Friedrich, a consulting actuary and principal at Milliman, highlighted some of the annuity findings during a panel discussion at the annual Life Insurance Conference in Arlington, Va. The session covered living benefit features now being offered in not only annuities but also in life insurance. Co-panelist Susan Saip, also a consulting actuary at Milliman, addressed the life insurance trends in this area as revealed by 34 participating carriers.

    The SOA has since posted the living benefit research for both product lines in two papers at the SOA website.

    Annuity/LTC trends

    The annuity part of the study will likely attract a lot of attention from the field as well as from home offices, since industry practitioners have been wondering what the products are like and how they are faring.

    The annuity data covers six annuity/LTC linked-benefit plans issued by five carriers. The products include annuities that accelerate the account value without a surrender charge if the policyholder has a chronic illness and the extension of LTC benefits “over and above” the accelerated account value as an independent benefit.

    Not all companies responded to all questions, the researchers said, so trend numbers vary by product topic raised. The products themselves vary too. However, the survey showed that they do share some common traits. Following are a few examples:

    Sales by issue age tend to be at ages 50 and up, for three of the plans.
    Two plans offer the LTC benefits via optional rider, while three offer an accelerated benefit rider (ABR) and extension of benefits rider (EBR) automatically.
    Two plans are offered on book value fixed annuities only, one is on a variable annuity only, and another is on a market value adjusted fixed annuity only. A fifth plan is offered on both a book value fixed annuity and a market value adjusted fixed annuity.
    Five plans include coverage for home health care, assisted living facilities, nursing homes, adult day care and hospice services.
    Two plans express the maximum lifetime benefit as a percent of account value (200 percent in one case, or 300 percent in the other). Two others set the maximum lifetime LTC benefit as a multiple (two or three times) of initial deposit.
    Three plans pay out benefits based on the expense reimbursement approach (actual expenses incurred for covered services up to a daily or monthly cap). Two others use the indemnity approach, reimbursing a specified amount per day or month for billable covered services received.
    Four plans are attached to single-premium products and one is attached to a flexible-premium product.
    Three offer single-life LTC options only, while two plans offer both single- and joint-life LTC options.
    Target markets vary. For example, one plan targets insureds ages 55 to 75 with investable assets of at least $300,000 while another targets ages 55 and up with assets greater than $100,000.
    Overall living benefits market

    The overall market for living benefit products, on the life and annuity sides of the insurance business combined, is rapidly approaching $4 billion, Milliman’s Friedrich told the LIMRA breakout session.

    That’s based on 2013 data, showing $1.2 billion in first-year premium for accelerated death benefits for chronic illness on life policies, more than $2.4 billion in first year premium for LTC riders on life policies, and “$320 million and climbing” for the annuity/LTC policies, he said.

    The study did not include annuities that “merely waive surrender charges when a health event occurs,” according to the researchers. In addition, it did not include guaranteed lifetime withdrawal benefits (GLWBs), guaranteed minimum income benefits (GMIBs) and other living benefits not triggered by a covered health event.

    As for regulations applicable to these living benefit features, a majority of states have adopted the National Association of Insurance Commissioners Long Term Care Insurance Model Act (640) and Model Regulation (641), the study said. The models include provisions that allow LTC benefits funded through life and annuity policies.

    Originally Posted at InsuranceNewsNet on April 27, 2015 by Linda Koco, linda.koco@innfeedback.com.

    Categories: Industry Articles
    currency