John H. Lancaster, President of Guaranty Income Life Insurance Company, met with Fran Matso Lysiak, senior associate editor, BestWeek, while attending the American Council of Life Insurers’ (ACLI) annual conference in Washington, D.C. last month.

Mr. Lancaster emphasized three points regarding the current increase in sales of long-term care insurance:

• According to LIMRA survey results, sales of individual LTC policies are up approximately 2% so far this year after four years of sales declines. At GILICO sales of “Combo Annuity/LTC” products are up by 40%.

• The main reason for the increase this year, despite the negative press on claims payments and hefty rate increases, may be the emphasis of many insurers to develop combination products that take advantage of tax incentives offered by the passage of the Pension Protection Act of 2006. Mr. Lancaster points out that agents are being motivated to make presentations to their clients “now” even though full tax benefits of combo policies do not begin until January 1, 2010.

• The sales of combo products and development of more products by other insurance companies should continue to increase over the next two years as the full benefits of paying long-term care insurance premiums with untaxed dollars becomes reality.

Guaranty Income Life Insurance Company was the first insurer to offer a tax-qualified LTC rider attached to a traditional annuity. Since 1999 AnnuiCare® has offered a substantial long-term care benefit by providing up to three times the annuity value for qualified long-term care expenses.

Listen to Mr. Lancaster's interview at BestDay Audio