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Group whole life insurance with a long-term care rider emerges to fill a void

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Group whole life insurance with a long-term care rider emerges to fill a void

While group long-term care insurance has become rare, especially among middle-market employers, a type of whole life insurance is emerging that may provide some LTC benefits.

Genworth Financial Inc. is one of the few insurers that offers group LTC insurance products on a voluntary basis to employers with 500 or more employees, sources say.

The company said it will offer the benefit on a group basis to employers with 150 to 500 employees, but only if the cost of the product is picked up by the employer.

“The group long-term care market has all but dried up,” said Bruce Sletten, senior vice president and national practice leader for elective benefits at Aon Hewitt in Dallas.

Because most insurers that wrote LTC cover on a group basis have withdrawn, “what we are seeing is new development around products that will satisfy the need but are not solely long-term care products,” said Beth Grellner, St. Louis-based co-chair of Towers Watson & Co.'s national voluntary benefits and services group.

For example, some insurers are offering group whole life with a long-term care rider, she said.

“Today, the vast majority of new long-term care policies sold are individual policies, which are individually underwritten,” Mr. Sletten said. “But a whole life product with a long-term care rider is available on a group basis. Depending on the group's size, it could potentially be offered on a guaranteed-issue basis.”

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