This Society of Actuaries article by Jeff Anderson and Mike Bergerson explores the advantages and disadvantages of long-term care policy buyouts from various stakeholder perspectives. It also discusses actuarial implications for a carrier thinking about offering a buyout plan.
The long-term care (LTC) insurance industry has been getting a lot of attention lately. At least one state-level government, Washington, has developed and adopted a social program that targets the need for LTC insurance. Several other states have taken developmental steps to address LTC needs through similar programs or by other means.
The need for LTC services has been fairly well documented since the inception of the private LTC insurance industry in the 1980s. Many Americans rely solely on the coverage from existing social programs (i.e., Medicare and Medicaid) and/or self-funding to cover LTC services. Based on estimates from 2014, only 11% of adults ages 65 and over living in non-facility care settings were covered by private LTC insurance. Additionally, the number of insurance companies offering traditional LTC coverage has decreased since the product was first introduced. The need for LTC is not going away, especially as the population continues to age.
In this article, Milliman’s Stephanie Moench and Shawn Stender discuss the future of the LTC insurance industry.
The influence of “contagion” among spouses has been widely
studied and observed for everything from emotions and depression to dementia,
obesity, and mortality. Does spousal contagion affect long-term care (LTC)
Spouses often serve the role of informal caregiver, which
can result in both physical and psychological “wear down” effects that
eventually lead to LTC claims for the spouse providing the care. Alternatively,
when one spouse dies, the other may no longer be able to care for himself or
herself and may require formal LTC services.
Milliman consultants Al Schmitz, Ali Yeager, and Jeremy Hamilton studied LTC insurance claim data of married couples, where both spouses have LTC coverage, to examine the influence on claim incidence (or frequency of claim occurrence) for one spouse when the other spouse commences a claim or dies. The higher level of claim incidence in the presence of a contagion factor is significant. The consultants provide high-level results of spousal claim analysis and discuss potential implications to the LTC insurance market in their article “Is your spouse contagious?”
Combination products provide valuable, and often substantial, health insurance coverage in the framework of a life insurance or annuity policy. Insurance companies offer many varieties of benefits in the market. This article by Milliman consultant Robert Eaton addresses a range of combination life insurance and health products.
This article was published in Society of Actuaries Product Matters Newsletter.
Milliman has conducted its sixth triennial long-term care
(LTC) insurance valuation survey. This year’s survey focused on individual LTC
and did not include group business. Many of the survey questions remain
consistent with the previous surveys, which allows for comparisons of the
changes in response over time.
The objectives of this survey are to review and document the
assumptions and methodologies related to the determination and testing of
active life and disabled life reserves as well as the asset strategies and
investments backing the reserves.
The information presented includes brief commentary on the
application of various methods and approaches of several technical LTC
valuation issues. The results of the survey are intended to provide interested
parties with general benchmarks regarding insurers’ current valuation
To read the full report by Milliman’s Al Schmitz and Tim Kempen, click here.
Long-term care (LTC) may not be the first thing individuals or couples think about as they approach retirement, but the costs for those who needs it can disrupt and derail retirement security. A good plan for long-term care requires many decisions over an extended period of time, and well before retirement. In this article, Milliman consultant Robert Eaton discusses the major considerations and options for financing LTC needs in retirement.