LTC Bullet: Caregiver Insurance

Friday, November 20, 2020


LTC Comment: Today’s “Guest Bullet” by Bruce Stahl of RGA Reinsurance Company develops the idea of “Caregiver Insurance” after the ***news.***

*** LTC IMPACT WEEK EXCELLS: Last week, on November 10, 11, 12, NAIFA’s Limited & Extended Care Planning Center Zoomed nine hours of briefings aimed at LTCI producers. Kudos to LECP Executive Director Carroll Golden for sponsoring this creative educational program and to Steve Cain of LTCI Partners for his omnipresent participation. Highlights included Matt Hamann of Transamerica speaking on “Why LTC Now?”; Denise Gott of ACSIA Partners on “LTC Worksite Enrollments in a Virtual World”; Marc Glickman of BuddyIns presentation on the “Technology Panel”; Shelley Giordano of Mutual of Omaha Mortgage on “No, Long Term Care Insurance Does Not Mean No Plan at All for Long Term Care Needs”; and Barry Fisher and Ron Hagelman, Jr., Principals of Ice Floe Consulting, LLC reporting on results of their survey with Oliver Wyman’s Vince Bodnar, “Who is Selling What? To Whom, How & Why?” This innovative program provided a great foundation on which to build. Room for improvement includes increasing the turnout which I never noticed reaching 200 attendees and considering the larger market in which LTC insurance is sold, including the public policy context, LTC providers, and the elephant in the room, Medicaid’s crowd out of LTC risk and planning. ***

*** SUBSCRIBE to LTC Bullets, LTC E-Alerts, and LTC Clippings. Join the Center for Long-Term Care Reform here. Due to the pandemic, long-term care is in the news more than ever before. Calls for more funding to alleviate the strain on seniors’ housing and caregivers are everywhere in the media. But no one has any idea where to find the money to improve long-term care. Except the Center for Long-Term Care Reform. We advocate targeting scarce public resources to those most in need and using the savings to incentivize private financing alternatives such as home equity conversion and long-term care insurance. Check out our analysis and recommendations in Medicaid and Long-Term Care (2020) and How to Fix Long-Term Care Financing (2017). Then join the Center and encourage your employers to join as corporate members. Our “Membership Levels and Benefits” schedule explains all the options. Contact Steve Moses at 425-891-3640 or with questions or comments. ***


LTC Comment: Bruce Stahl and Winona Berdine, both vice presidents at RGA Reinsurance Company, published “A Middle-Market Senior Care Solution” in the August 2020 issue of the Society of Actuaries Long-Term Care News. Their idea is a product to mitigate LTCI’s “affordability gap.”

They propose a “living benefits solution” that “reaches the middle market, provides security to generations of family members, satisfies real customer financial needs and provides them with peace of mind, minimizes risk in the morbidity tail, reduces asset and interest rate risk, and reduces concerns about pandemic risk in facilities.” (LTC News)

A tall order, but intriguing, so we asked Bruce Stahl to tell us more. His reply follows. But first read “A Middle-Market Senior Care Solution” to get details on the proposed product. 

“Caregiver Insurance”
Bruce Stahl

The attributes of the product define it better than the name. Our focus groups recommended calling it something with a personal flavor, like “Caregiver Insurance.” Originally, we at RGA were calling it a decreasing term product and a career protection product. Yet the attribute of having a pre-chosen terminus date and the fact that the benefits would be determined by another person’s expenses make the product valuable.

Here’s how it works: The parents are underwritten, but the working adult child is the policyholder. The policy covers the costs of a parent’s care while the child is working. This allows the child to save for their own retirement while still addressing the cost of care needs of parents. The term of coverage is designed to end when the policyholder retires and can care for parents themselves without interrupting their own career.

Typically, care is assumed to be in the parent’s home, given the expectation that the retiree will care for their parents at a time suitable to their plans and budget. The applicant would hypothetically purchase a policy to cover care expenses for the span of time they intend to remain in the workforce. The applicant could also choose a term that allows payment of benefits for additional time after retirement, such as for a prolonged vacation, before taking up caregiver duties. But the policy does not have a waiver of premium benefit, so the policyholder would want to plan on continuing premium payments even when not earning income.

Distributors of senior benefits products might find Caregiver Insurance an attractive product to promote to the insurers they represent. It could fit well as a supplemental worksite benefit if underwriting with electronic medical records could be sufficient. It could also work well for Medicare Supplemental or Advantage distributors, who can contact these adult children policyholders ten to twenty years before they themselves are ready for Med Supp.

Also, if distributors are concerned that their insurance partners might not be willing to take on investment risk at this time, the product has only a small pool of assets available to invest because the maximum benefit decreases as the policy ages, the risk is far lower.

Finally, if insurers want to avoid standalone LTCI’s reputation for premium rate increases, this product, even though it is not LTCI, does cover many long-term care needs without the concerns of increased longevity and lack of very old age mortality and morbidity experience.

Bruce Stahl, ASA MAAA is senior vice president, head of U.S. Individual Health for RGA Reinsurance Company. Reach him at