Alright, I admit I’m confused—but dear friends I am not alone. The only significant sign of life in life insurance sales are those products that lay claim to some level of contingent long term care planning. We certainly have a plethora (I love the way that word rolls off your tongue) of product options to accomplish a reduction in long term care risk. The problem is we have made a mess of trying to differentiate between the product choices.

The current inventory of named categories may unfortunately represent nothing more than hitting the synonym button on your computer. Let’s begin by reviewing the plain vanilla definitions of the most prevalent choices:

  • Combination: “A merging of different parts—where the individual elements are individually distinct.”
  • Hybrid: “A thing made combining two elements.”
  • Linked: “To make, form or suggest a connection.”

What should strike you is that all the visible market options of life insurance product distinctions with 7702B or 101g ADBRs and/or EOBRs fit all the definitions. Meaning whatever preconceived notions we bring to attempting to understand the various product choices just adds to the cognitive confusion.

Nomenclature then becomes a process, defined as “the devising or choosing of names,” that becomes a “system of names in a particular field.” As usual this potential for mental disarray is substantially compounded by the 80+ companies and myriad distribution marketing sources each trying to distinguish consumer product options based on need and motivation to buy. So now let’s try to glean what we can from the literature.

  • Combination—appears to be the most inclusive named category creating the largest product tent from a cornucopia of “living benefits” to the weakest chronic illness rider definition. In truth any historical additional options added to a base life plan has created a combination product.
  • Hybrid—seems to have the clearest definition as any describing a life plan plus a long term care 7702B health rider. This would then include life plus an ADBR 7702B long term care rider and any asset-based products with a separate extension of benefits LTCI rider. Hybrids would not include life with chronic illness ADBRs.
  • Linked benefit products—again creates an all encompassing product option “catch all” with two specific subcategories: 1) Asset-based with EOBRs; and, 2) Life plus a long term care or chronic illness rider. This would then break down into three SubPhyla to include life plus LTCI and life with chronic illness, where you pay for the additional benefit cost which then creates a clear definition of benefits paid at the time of claim, and life plus chronic illness ADBR sold with no current premium utilizing the “rear end” load with the lien or discount method. Technically you could have an LTCI ADBR with no up-front premium as well. And it too would then be considered all the above as a linked, or hybrid or combo product that cost you nothing unless you actually tried to use it.

Are you adequately confused yet? Welcome to the crowd. If we have trouble talking in terms which represent common definitional ground, how many brain cells are we scrambling in our customers? Please explain how we direct traffic in a particular product direction if we are lost before we begin?

Best advice is to follow the money to keep things straight in your head.

There are basically four long term care sales planning choices. And to be perfectly clear yet again, all of them should be on tap when you begin a sales conversation.

  1. Traditional stand-alone TQ individual LTCI.
  2. Life with a chronic illness or LTCI ADBR that has no upfront premium cost. You pay one way or the other only at the time of claim. Forgive my impudence here but I’m not sure you can call this a sale when you gave it away.
  3. Life with a chronic illness or LTCI ADBR where the customer pays for the benefit as they go—either included in the premium or as a rider option. By paying upfront they most clearly define the actual benefits that will be paid when needed.
  4. Life with an extension of benefits third pool of LTCI funding leveraging risk dollars for more affluent consumers.

And I have not forgotten annuity combos or enhanced payout options. I am also not ignoring short term LTCI health products which are also gaining popularity. They are just alternate cans of worms reserved for another discussion.

Try to keep it as simple as you can. Initial long term care planning conversation will continue to begin with insurability issues and progress rapidly to an evaluation of individual needs coupled with a combination of the willingness to link appropriate action now with the ability to pay for a hybrid solution.

Other than that, I have no opinion on the subject.

Ronald R. Hagelman, CLTC, CSA, LTCP, has been a teacher, cattle rancher, agent, brokerage general agent, corporate consultant and home office executive. As a consultant he has created numerous individual and group insurance products.

A nationally recognized motivational speaker, Hagelman has served on the LIMRA, Society of Actuaries, and ILTCI committees. He is past president of the American Association for Long Term Care Insurance and continues to work with LTCI company advisory boards. He remains a contributing “friend” of the SOA LTCI Section Council and the SOA Future of LTCI committee. Hagelman and his partner Barry J. Fisher are principles of Ice Floe Consulting, providing consulting services for Chronic Illness/LTC product development and brokerage distribution strategies.

Hagelman can be reached at Ice Floe Consulting, 156 N. Solms Rd., New Braunfels, TX 78132 Telephone: 830-620-4066. Email: