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Nationwide tests new LTC + life insurance model

December 28, 2015
by Pamela Tabar, Editor-in-Chief
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It’s been the basic premise of life insurance for decades: To ensure specific financial support for dependents if the family’s primary money-earner should die. Most commonly, life insurance policies provide survivor benefits for a spouse, but what happens when the “dependent” is an aging parent?

Nationwide is testing out a new idea: a long-term care (LTC) insurance rider attached to a special kind of survivorship life insurance that can reach much further across age gaps.

Most survivorship life policies have strict rules about the age gap between policy-holder and beneficiary, since the policies were originally designed for couples, whose ages are usually within a 15-year span. Nationwide’s new policy can accommodate a wider range of ages--including an adult child and an elderly parent—and adds the benefits of an LTC rider.

The emergence of the new option is reflective of the changing demographics of the American family, including who is taking care of whom. The LTC rider provides benefits for severe cognitive impairment and/or those who are unable to perform two or more activities of daily living, notes InsuranceNewsNet.

Most of the interest in the policy is expected to come from “sandwich generation” adults with an elderly parent or else grandparent/grandchild combos, explained Eric Henderson, Nationwide’s senior vice president, life insurance and annuities, in the InsuranceNewsNet article.