Why Are the New Hybrid LTC Policies So Popular?

A long-term LTC planner looks at why the market is the way it is.

By Romeo Raabe | March 28, 2018

Hybrid insurance policies for long-term care (LTC) are very popular and becoming more so each year. Lets look at some of the reasons why. Traditional LTC insurance policies had some significant price increases. These were the first time insurance plans were conceived to cover what had always been done by the wives of our children in the 1950’s. They were put together by actuaries who had no data on how they would be used, or who would be the recipients of such care. Thus they were sold too cheaply to people they never should have been sold to.

That, of course is a recipe for trouble and trouble did occur. The insurers found that hardly anyone drops a LTC policy, especially as they aged and knees, hips, and other things got older. When care is needed soon, you look forward to benefiting from the insurance. Thus price increases happened to keep the pool of this business able to pay claims.

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