Life-LTC Combo Product Sales Dropped in 2020: LIMRA

Sales of life combo products that offer chronic care benefits, rather than true LTC benefits, continued to gain in popularity in 2020, and they accounted for about two-thirds of 2020 combo product policy sales, according to LIMRA.

Carriers reported that much of the drop in combo product sales was due to a decrease in use of the extension-of-benefit features that come with some universal life and whole life products.

Austin Tewksbury, a LIMRA analyst, said in a comment on the data, included in the survey results announcement, that those types of sales are relatively complicated, and that COVID-19 pandemic conditions may have made the extension-of-benefit transactions especially difficult to complete.

Low interest rates may be another villain.

Combo product issuers use earnings on bond portfolios to cover some of the benefits costs. Interest rates on bonds have been low in recent years. Seven of nine combo issuers surveyed by Milliman last year said that low rates had forced them to increase combo product prices at least once in the previous 12 months.

***

(Image: iStock)