Linked benefit life policies have been niche products for a number of years now. Historically, the dominant structure has been single pay in nature. Recently, due to some regulatory changes, the accelerated death benefit design is becoming more and more a part of "regular" permanent life policies, i.e. annual pay designs.
While this has the potential to put a crimp in LTCI sales, I like this phenomenon. Is it a absolute substitute for long term care insurance? Probably not. But there are a significant amount of consumers who've defined - rightly or wrongly - that they're just not going to buy LTCI. But I'd think a linked benefit design would be a product they'd at least consider.
Think about this: if the Great God of Insurance swept in with an edict that all life policies that exist would now have an added endorsement allowing for the death benefit to be accessed to help fund a long term care stay, would it help? I think it might put a dent in the long term care funding crisis.
I suppose this is one of those issues that can be looked at in many different ways, but regardles, the genie is out of the accelerated death benefit bottle. It will be interesting to see the long term (pun intended) affect on planning.
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