There's no guarantee rates won't go up in the future, of course. But, Ball insisted, "if we needed to raise rates, we'd actually reduce the dividend first. It's like a built-in cushion, designed to help us avoid rate increases. Only if we exceeded that would we raise rates."
Underwriting qualifications are the same as for any other New York Life LTC product. Applicants are interviewed over the phone by a health professional and medical records are reviewed. Those at more advanced ages are also subject to cognitive screenings.
Still, given the challenges in the LTC market, is this new plan commercially viable? Last year, barely 70,000 standalone LTC policies were sold, a tenth of the total 20 years earlier.
Nevertheless, New York Life's Ball is undeterred. "We see a huge consumer need, especially considering the aging demographics," he said. So far, he added, the reception from advisors and consumers alike has been "tremendous."
Moreover, he predicted that over the next five years more carriers will enter or re-enter the market as pricing concerns stabilize. There may be more innovations to come, too, he conjectured, such as disability-income products that convert to LTC coverage. "The problem is not going away, and the need is too great to ignore," he said.