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Combo Product Sales Expected to Increase

—November 3, 2010

Many predicted 2010 would be the year of the combo product (linked-benefit Life/LTCi or Annuity/LTCi products). The tax provisions from the Pension Protection Act that went into effect on January 1, 2010 made it so money withdrawn from annuity and life insurance products for the purpose of funding long-term care costs could no longer be taxed as income.

Sales of combo products have increased in 2010, though maybe not to the extent that some predicted, according to the 2010 Long-Term Care insurance Market Study conducted by Agent Media and the American Association for Long-term Care Insurance (AALTCi).

While the sale of Life/LTCi products increased significantly, the survey respondents reported selling fewer Annuity/LTCi combo products in the past 12 months. Still the overall percentage of agents who sold both products increased from 13% in 2009 to 18% in 2010, while the percentage of agents who had sold neither decreased from 62% a year ago to 53%.

The survey also suggests that more agents are beginning to understand combo products and expect increased demand in the future. In the 2006 survey, 59% of respondents said they expected to sell a combo product in the next 12 months, compared to 41% who did not. This year, 72% of agents said they expect to sell a combo product in the next 12 months, while just 28% do not.

Combination Products Sold in the Last 12 months

Do you expect to sell a combo product in the next 12 months? Let us know in the comments section below.

Senior Market Sales offers several combo products, such as Mutual of Omaha’s Living Care Annuity, Genworth’s Total Living Coverage UL and Genworth’s Total Living Coverage Annuity.

Download our white paper Linking LTCi: The Disappearing Line Between Life, Annuity and LTCi Products to learn more about the tax advantages of combo products and how to find the right prospects for them.

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