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WINDSOR, Conn., Dec. 3, 2018 – According to LIMRA research, the life-combination market has grown to more than a $4 billion market over the past 10 years. A new study, conducted jointly by LIMRA and Ernst & Young LLP (EY), identified five factors that impact the viability of the life-combination market.

Long term care (LTC) is a growing concern in the U.S. According to Health and Human Services, half of people turning 65 today will require some form of LTC support during their lives. With the average annual cost for nursing home care at close to $100,000 per year, few people have the resources to pay for this care and even fewer have insurance to mitigate these costs.

“Our study explored insurance companies’ efforts to develop new products to meet this growing need, and the challenges they face going to market,” said Linda Chow, EY senior actuarial consultant.

The report, Combination Products: A One-Stop Solution? examines five factors that challenge life insurers’ ability to develop and market products appealing to advisors and consumers while still being profitable.

  1. Consumer Perception: In general, consumers have had a negative impression of stand-alone LTC insurance products, due to rate increases and companies leaving the market. This mindset may influence their perception of combination products.
  2. Product Viability: Will carriers be able to overcome prior advisor and consumer biases around stand-alone LTC products to consider a combination product as part of the financial plan?
  3. Regulatory and Compliance Challenges: To ensure the product is suitable for their clients, advisors will need specific training to understand the unique characteristics of the policies. In addition, carriers should work with regulators in order to establish meaningful education standards that benefit advisors as well as consumers.
  4. Operational Friction: Carriers will need to update their systems and train their claims personnel to understand the complexities of adjudicating the living benefit portion of a combination product, which differs greatly from the claims process for the death benefit.
  5. Risk Management: Combination products are relatively new and the experience data on these products is limited. This presents challenges when designing and pricing products, underwriting policies and capital management.

“Today more than 30 companies offer life-combination products, more than double the number a decade ago,” noted Scott Kallenbach, research director, LIMRA Strategic Research. “Our research shows consumers – especially younger consumers – like the idea of purchasing a product that can serve two purposes: mitigate the costs of long term care services or offer a death benefit. Based on the current sales trajectory of these products, we forecast this market to continue to enjoy robust growth.”

This report was supported by a quantitative survey conducted by LIMRA and EY in January 2018.  There were 45 participating companies, including 29 currently active in the combination product market, four that plan to enter the market within six months and 12 that are not currently in the market and have no plans to enter it. During the first quarter of 2018, 20 one-on-one interviews were conducted with companies that are active in the market or planning to enter it within six months of the interview.


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About EY 

EY is a global leader in assurance, tax, transaction and advisory services. The insights and quality services we deliver help build trust and confidence in the capital markets and in economies the world over. EY refers to the global organization, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients. For more information about our organization, please visit

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