Thanks for the link. I read through this essay. Makes a lot of good point about LTCi. Don't know who the author is or his qualifications.
But, I take exception to his comments on Hybrids, as he says he dismisses Hybrid LTC/Life Insurance policies out of hand.
He says this about them: "On the negative side, hybrid policies are 3 to 4 times more expensive than LTCi. And hybrids are akin to permanent life insurance, which means they are complicated and the economics are
difficult to decipher."
So in one breath he says economics are "difficult" to decipher, but then also says very exactly that "hybrids are 3 to 4 times more expensive than LTCi." He simply dismisses them and does not explain how he came up with his 3 to 4 time more expensive figuring (i.e. whether he was able to decipher them himself! Likely not---he just dismissed them as "too difficult!)
He does not seem to take into account "any value" at all for feature that Hybrids, at death of insureds, pay about double (depending on ages when issued) the initial premium out to heirs as life insurance, if the LTC benefits were never needed or used. Author simply assigns "no" value at all to that feature!
And he assigns no value to feature that there are "never" any premium increases!
So, Hybrids overcome main objections many have to getting LTCi at all:
1) People fear "wasting" years worth of insurance premiums for something that they may never use. With Hybrids, if you don't use it (or use all of it), your heirs get about double your premium amount back as life insurance payout. (If you use some of the LTC feature, the heirs get the remainder back as life insurance.)
2) Potential buyers fear LTCi premium increases over the years, and some fear being priced out of holding onto their insurance. With Hybrids, this is simply never a concern at all. They are either paid for with upfront single premium, or some are paid over ten years with contractual yearly payment set in contract at issue date.
3) Other potential buyers wonder how to afford coverage for "both" spouses, needing two separate policies. With some available Hybrids, both spouses can be covered under one policy with the LTCi benefits being available to either or both spouses. So, one can make a judgement on "odds" of either or both needing LTC, and choose a size of Hybrid policy such as to play their judgement on those odds. Premium efficiency of covering both spouses under one policy.
So, Hybrids solve a lot of the main objections to LTCi many have, such as the self-insurers.
What people give up to an insurance company in purchase of a Hybrid, with an upfront single premium, is excess time value of investing that single premium amount over the years. But they "do not" give up the single premium itself. Indeed, their heirs may at least double that money, if LTCi never used.
So my opinion is people should not dismiss Hybrids out of hand, like this author did, as "too difficult to understand". People, especially self-insurers, with the objections stated above should look into and consider the Hybrids as via solutions solving many of the big objections---while "still" providing peace of mind.
(Full disclosure, I am a 20 years ago retired CPA. Haven't done CPA work for pay for all that time. But I do still have my wits about me! In my opinion!)