Insurance fintech adds long-term care products

The cost of long-term care is growing, and an insurance fintech wants to help financial advisors solve the problem for clients.

A study from the National Council on Aging found that 15 million seniors are financially insecure and that more than 65% of Americans will require some form of care as they age. Costs are steep, yet only 10% of Americans have some form of long-term care insurance, according to a separate report from the Congressional Research Service.

Modern Life is addressing the gap by adding long-term care insurance and hybrid LTC insurance products to its suite of products for financial advisors. Both products will be available on Modern Life’s digital life insurance brokerage platform, which attracted $15 million in seed funding in August.

"The average person retiring today has a 70% chance of requiring long-term care in their lifetime,” Michael Konialian, the co-founder and CEO of Modern Life, said in a statement. “With care costs rising by as much as 6% per year, it is more important than ever that financial advisors help clients plan for their future needs.”

Incorporating health care costs can help financial advisors plan more holistically for a client’s retirement, said Eric Greene, a representative of Northeast Financial Network.

“Clients are increasingly concerned about custodial care costs and longevity risk,” Greene said in a statement. “Long-term care solutions offer a means to offset these risks in a tax-efficient manner."

Advisors can request a quote using a shareable form to collect client data. For advisors without a deep history with life insurance products, Modern Life makes a brokerage team available to help compare coverage options and available riders.  

Modern Life’s product shelf is stocked by more than 20 national carriers. In addition to the newly added LTC products, it offers permanent and term life insurance, annuities and variable products. The fintech also provides a digital dashboard to manage and view client submissions and data-driven underwriting assessments.

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The annuity market should continue to grow over the coming years, with 44% of retired households saying their most important financial goal is assuring a comfortable standard of living, according to research from Cerulli Associates. Helping with the cost of LTC with concepts that include in-plan annuities, income-taking solutions, LTC hybrids and inflation protections is one approach the research sees as an avenue for growth.

Insurers are leveraging the current favorable conditions in the annuity market to nudge conversations toward new product concepts, Donnie Ethier, a senior director at Cerulli Associates, said in a statement.

““Understandably, the industry is focused on principal protection right now, but the income story of annuities will return and grow in importance,” Ethier said.