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Health plan prescription drug formularies continue to increase in complexity, and changes to those formularies are especially challenging for consumers to navigate.

Those were among the highlights of a presentation on formulary placement and specialty drugs by Matthew Sankey, market regulation manager with The INS Companies, during the National Association of Insurance Commissioners fall meeting. A formulary is the list of medications approved for coverage by a health insurance plan.

Sankey discussed how formularies have evolved and what regulators can do to regulate them.

Formulary development starts with a pharmacy benefit manager’s pharmacy and therapeutics committee, he said. Committee members are clinicians who work in oncology, pediatrics, geriatrics, pain management and mental health, and all discuss what medications should be on the formulary based on clinical reviews and data.

Committee members discuss what is clinically relevant about a drug versus its cost. Sankey said the committee determines the first-line therapy for a specific condition.

Drug rebates have a huge impact

Many issues on formulary development center on manufacturer rebates for drugs, he said.

“Under the current system, medications are not incentivized to be low cost. The higher the cost of the medication, the more you can get in rebate. That has a huge impact on what is being preferred or excluded from the formulary.”

Formularies are divided into anywhere from four to six tiers to manage costs and encourage the use of clinically effective, lower-cost medications. Each tier corresponds to a different level of cost-sharing for the patient. The lower the tier, the less the patient pays out of pocket. Higher tiers generally mean higher copays or coinsurance. Formulary tiers – listed in order from lowest to highest out-of-pocket cost – include:

1. Preventive
2. Preventive generic
3. Preferred brand
4. Nonpreferred brand
5. Preferred specialty
6. Nonpreferred specialty

Sankey said formularies are not transparent and several factors go into them, including medication characteristics, prior authorization requirements, step therapy requirements, patient outcomes, and nonformulary medication reimbursement.

Specialty medications continue to grow

Specialty medications are complex and continue to grow, he said. Specialty medications are defined as prescription drugs that treat chronic, complex or rare conditions; have limited distribution; require specialized administration and handling, and are part of patient management.

PBM-affiliated drug procurement is something new, Sankey said. He gave Humira, the brand-name version of adalimubab, as an example. Sankey said that the top three PBMs – CVS Health-Cordavis, Cigna/Evernorth-Quallent Pharmaceuticals and UnitedHealth Group-NUVAILA – have replaced Humira on their formularies with biosimilar drugs they procured.

Formularies have several impacts on consumers, he said, including annual and even quarterly changes, copays and coinsurance, and higher-cost brand-name medications sometimes preferred over generics.

Sankey said the tiering of antipsychotics is of particular concern. All antipsychotics are Tier 4 medications, carrying a higher out-of-pocket cost. But some of those drugs are generics that have been available for years.

“Why would a brand name medication be preferred on the formulary if there is a generic available at a lower cost? It goes back to rebates,” he said.

“Formulary changes are one of the hardest things for consumers to navigate,” he said. “Formularies must be more transparent for consumers.”

Concerns about formularies and PBMs

Sankey said he is concerned about the increasing number of medications being excluded from formularies. He cited research from Cencora that showed the Big 3 PBMs excluded a total of 1,453 unique medicines from their formularies, an average increase of 27% between 2014 and 2025.

What he said he finds even more alarming is PBMs’ preference for brand-name medications over generics.

“If the generic is available and the plan requires a brand name drug, what does that do for health care costs?” he asked.

Sankey listed a number of challenges with formularies and PBMs, including increased complexity and number of tiers, higher-cost medications being incentivized to remain on formularies, and patients being required to try and fail on drug therapy before being permitted to use a higher-cost drug.

“Formularies will continue to be more complex. More specialty drugs will enter this space and costs will continue to grow,” he said. “Meds for these specific patients should be accessible if needed.”

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Artificial intelligence patenting in insurance is becoming a high-stakes, highly concentrated race dominated by a handful of U.S. property and casualty carriers, even as overall activity remains 30% below its 2020 peak.

Evident, an AI benchmarking and intelligence platform focused on financial services, has released new data from its Insurance AI Patent Tracker, providing a sector-wide view of how insurers are protecting AI innovation.

The analysis shows that 166 AI-related patents have been filed by 30 major insurers in North America and Europe since January 2023. Filings are heavily clustered among a small group of U.S. carriers, with State Farm, USAA and Allstate alone accounting for 77% of all AI patents filed by insurers over the past decade. P&C insurers dominate overall, responsible for 89% of AI patents, reflecting their advantage in telematics, IoT-driven risk monitoring, and other sensor-based systems that more easily satisfy patentability standards in the U.S. and Europe.

“Patents offer a rare window into where insurers are placing their biggest bets on AI,” said Alexandra Mousavizadeh, Co-founder and CEO of Evident. “This data shows that innovation is overwhelmingly being driven by a handful of US firms, especially in P&C. While the volume of filings remains modest compared to banking, we’re seeing a sharp uptick in generative and agentic capabilities. The IP landscape is shifting from protecting past systems to enabling future ones.”​

GenAI and agents rising

Despite growing interest and investment in generative AI, patent volumes have not returned to their 2020 high. Evident reports that aggregate AI patent activity across insurance is currently about 30% below that peak, suggesting a more selective or strategic approach to filing in the post-2020 period. Within those filings, however, there has been a sharp shift toward generative AI: these patents have climbed from 4% of insurer AI filings to 31% in 2023, with most focused on customer service and claims automation use cases.

Agentic AI—systems that can take autonomous actions on behalf of users—is beginning to appear in the portfolio but remains rare, with only three insurers having filed agentic AI patents to date, led by USAA. ​

Where insurers are applying AI today

The patent data offers a detailed look at how leading insurers are embedding AI throughout the value chain. Examples highlighted in Evident’s analysis include USAA’s use of generative AI to clarify aerial imagery for property damage assessment, and State Farm’s work on machine learning–based claims triage and autonomous vehicle fault analysis.

Allstate has pursued patents around an in-vehicle AI assistant aimed at automating elements of the claims process and enabling behavior-based discounts, while Swiss Re has focused on predictive analytics for medical data and anomaly detection. Other filings point to MassMutual’s efforts in interpretable underwriting and AI-driven document tagging, Liberty Mutual’s deployment of generative AI for engineering release notes, and Zurich Insurance Group’s systems for transforming user-entered addresses into clean, structured datasets.​

Strategic implications

Evident positions this patent landscape as a strategic crossroads for the sector. On one path, AI patents remain the preserve of a small group of frontrunners, particularly in U.S. P&C, who use IP to lock in technical and data advantages around telematics, automation and advanced analytics. On the other, patent filings could become a broader signal of competitive intent as more carriers move from experimentation to production-scale AI.

The data underscores a shift from protecting legacy systems toward securing the next generation of AI capabilities, especially in generative and agentic technologies that touch underwriting, claims, customer interaction and internal operations.

“The insurance sector is at a crossroads,” added Mousavizadeh. “Either patents remain the domain of a few frontrunners, or they become merely a signal of broader competitive intent. As generative and agentic AI reshape the value chain, insurers will need to decide whether to build IP defensively or lead from the front.”

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In the current environment of rising debt, cost-of-living challenges and competing financial demands, financial wellness support has emerged as a key advantage in attracting and retaining top talent, according to new research from Lincoln Financial.

The company’s latest Wellness@Work research study delivers insights from more than 2,500 full-time workers across industries and generations, exploring their perceptions of retirement readiness, employee benefits, and the support they want from their employers on their journey toward financial security.

Using this information, the company has identified three key benefit strategies that employers can use to help boost employees’ financial confidence. They are:

• Strengthen retirement benefits.
• Optimize open enrollment.
• Offer financial wellness tools.

Reasons why financial wellness support is so popular

So why is financial wellness support becoming such a key benefit for employees? According to Sharon Scanlon, senior vice president, Group Protection Product, Workplace Solutions Marketing and Customer Experience, Lincoln Financial, financial stress is a growing concern across the workforce.

She said that Lincoln’s latest Wellness@Work research shows that 78% of employees are managing at least three competing financial priorities. A significant 82% of them carry debt, and 64% said that debt is a problem, with even higher rates among younger workers (72% of Gen Z and 71% of Millennials).

“When benefits, retirement plans and financial wellness tools are thoughtfully integrated, employees gain a clearer understanding of their financial situations,” Scanlon said. “This clarity helps them make more informed decisions and can help ease financial anxiety. Employers who invest in comprehensive benefits strategies that include financial wellness tools often see stronger employee loyalty and satisfaction.”

In fact, Scanlon added, according to the research, workers who feel financially secure are twice as likely to want to stay with their employer and tend to view their benefits more positively.

Areas of concern to employees

Retirement readiness remains a top concern for employees, Scanlon added. In fact, she said, just 28% of workers said that they feel very confident about their ability to retire, and nearly half (45%) worry they may never be able to.

Additionally, 58% of employees surveyed across generations said that they want to reassess their benefits. Yet only half reported being very familiar with what their employers offer, and even fewer understand how to make the most of those options.

When asked which wellness benefits would truly stand out, employees pointed to student loan assistance (46%), mental health support (37%) and emergency savings programs (34%) as top priorities, Scanlon said.

“While financial wellness tools can help reduce stress and build confidence, they’re only effective if employees know they’re available and understand how to use them,” Scanlon pointed out. “That’s why awareness, education and ease of access are essential. Bridging knowledge gaps, especially during annual enrollment, can boost confidence, increase utilization and enhance the perceived value of benefits.” 

Enhancing financial wellness support

So, what are some of the steps that benefits advisors and plan sponsors can take to help enhance the financial wellness support employees receive? According to Scanlon, benefits advisors and plan sponsors are instrumental in positioning financial wellness as a core component of employee well-being, not just as a nice-to-have.

“Making these resources accessible and easy to understand can help employees feel more confident, financially secure and better prepared for retirement,” Scanlon said.

 Encouraging employee engagement

Scanlon added that to encourage engagement of their employees, employers can:

• Frame wellness as holistic care that encompasses financial, mental and physical health, emphasizing the connection between financial wellness and overall well-being.
• Offer Employee Assistance Programs that include counseling and mental health services
• Simplify access and improve engagement with an integrated benefits experience that’s intuitive and user-friendly.
• Provide actionable, financial wellness resources to help support student loan repayment, emergency savings, budgeting, debt management, insurance options and more.

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In one product trend, regulators are seeing more guaranteed living withdrawal benefits attached to non-variable annuities.

And those products are “quite complicated,” said Katie Campbell, an actuary with the Interstate Insurance Product Regulation Commission.

“It takes quite a bit of time to understand what they’re doing and understand the examples,” she said Monday at the National Association of Insurance Commissioners’ fall meeting. “It’s like you need a tree structure on some of them to just figure out [where different options lead]. … It’s quite complicated to figure some of them out.”

Campbell gave an update to the Life Actuarial Task Force at the NAIC meeting in Hollywood, Fla.

Known as the Insurance Compact, the IIPRC is a multi-state agreement that allows states to coordinate on regulation and create a uniform product review standard. Its main purpose is to simplify insurance compliance for companies that operate in multiple states while protecting consumers.

The compact reviews life, annuity, disability income and long-term care insurance products. For the year to date, the compact received 925 filings, Campbell said. About 35% of them are individual annuity products, and 37% are life insurance products.

“[T]hat’s kind of a flip flop,” Campbell explained. “We used to have [about] 60% were life products, but we’re seeing that even out now with a lot more annuity filings.”

On the life side, most filings are whole life and term products, she said. Universal life makes up just 6% of filings, but are “the most time-intensive life filings that we get,” Campbell said.

Complicated annuities criticized

Many annuity manufacturers are under a spotlight for the complicated annuity constructions. Consumer advocates and many within the industry say that consumers can’t possibly understand the complex crediting strategies and index performance parameters.

Annuities seem to be the prime area of innovation, Campbell said.

“We’re seeing more complex index strategies,” she said. “Recently we’re seeing … minimum guaranteed crediting in those index strategies. So, it’s not just a return on the index, it’s you’re guaranteed a certain return.”

Other innovative annuity products come with rider charges for “what I call buy up options where … the money is spent to increase the participation rates in the caps,” she added.

Likewise, the compact is seeing a lot of annuity products where all of the credit strategies are in riders. So even the fixed account guaranteed interest accounts are in a rider form, Campbell explained.

“So, say they have a one-year term,” she said. “At the end of that term, the company can decide whether they want to offer any [crediting strategy], including the fixed income strategies or fixed account strategies.”

‘Baffles my mind’

Mike Yanacheak, chief actuary at the Iowa Insurance Division, said, “the idea of a base contract without a fixed account just baffles my mind.”

“For a contract to exist, there has to be an exchange of consideration amongst the parties,” he added. “If a base contract does not have any accounts. How does that take place?”

Other state regulators chimed in and said they can “lump” riders in a part of the base contract.

“One of the concerns we had when we started seeing some of these where, when you take the fixed account out, that means you don’t necessarily get that offered at the end of the year either, but they’re always going to offer something,” Campbell explained.

“We started asking the companies, ‘Okay, are you always going to offer this particular fixed interest strategy?’ And some of the companies said, ‘Yeah, will always offer it.’ They just want it in a rider form.”

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The Rhode Island Parent Information Network is going on 35 years helping residents “turn challenging situations into opportunities,” as the healthcare nonprofit describes it.

RIPIN saw how badly Rhode Islanders struggled when Medicaid “unwinding” took place during 2023 and 2024. The impending loss of Affordable Care Act subsidies is going to repeat that scenario, said Shamus Durac, staff attorney with RIPIN.

Durac was one of several consumer advocates who urged regulators Monday to focus efforts on health care coverage access during the National Association of Insurance Commissioners’ fall meeting.

“The first thing that we saw when the unwinding happened was consumers experiencing shock and confusion about why things were changing,” Durac said. “That’s already happening now. People are making their coverage decisions for next year, and if they hadn’t yet been tuned in, they are now, after they see what their premiums are looking like.”

Federal tax credits that have helped make their health insurance affordable are set to end Jan. 1, unless Congress acts. The U.S. Senate could vote on extending those enhanced tax credits Thursday, but the plan may not have the bipartisan support needed to advance.

As a result, many Americans could see their health care premiums double or even triple.

NAIC/Consumer Liaison Committee meeting Monday featured several presentations by advocates on the devastating impacts to come if the subsidies are not extended.

It’s estimated that more than 14 million Americans will lose health insurance over the next decade, said Jennifer Snow, national director of government relations and policy at the National Alliance on Mental Illness.

“This dramatic shift is going to have detrimental effects on families at all income levels and all states,” Snow noted. “So, we have a significant time bomb coming down the pike.”

‘Forced to have to pay more’

Beyond the political issues with the ACA, there are persistent financial barriers to everyday Americans getting access to quality health care, Snow said.

“Whether it’s utilization management, like prior authorization, where people have to jump through hoops to get the care prescribed by their doctors, or limited provider networks where people cannot find a provider in their network, they’re forced to have to pay more to get they need or go without,” she said.

Snow displayed several stories from anonymous Americans paying healthcare bills as high as their mortgage payment. “Donna from Virginia” cashed in her family’s life insurance policy to pay for medications that cost more than $1,000 a month.

Silvia Yee is the public policy director at Disability Rights Education and Defense Fund. She discussed the widespread impact on communities when vaccinations are harder to get.

“When we have individuals that we go to school with, that we work with, when they can’t get the vaccines or tests for a worrying symptom, the entire community they serve is hurt,” Yee said.

Vaccinated populations can lower health care costs, prevent the complications with required hospitalizations and help hospitals preserve valuable resources at a time when those resources are dwindling, Yee said.

States can do more to preserve access to scientifically valid vaccinations, she noted.

Kennedy impact on healthcare

Department of Health and Human Services Secretary Robert F. Kennedy Jr. has targeted vaccine research and unilaterally rolled back vaccine recommendations, among other actions. Kennedy went after the Centers for Disease Control’s Advisory Committee on Immunization Practices (ACIP), which makes recommendations for the public’s use of vaccines, firing experts and replacing them with vaccine skeptics.

According to recent reports, at least 26 states have taken new actions to preserve or expand vaccine access in response to changing federal vaccine policy.

These efforts include allowing pharmacists or other non-doctor providers to administer vaccines without a prescription, and authorizing state‐level public health guidance or advisory panels to supersede or supplement federal recommendations.

In closing, Yee acknowledged the rising costs of healthcare and the efforts to keep costs down. But those efforts can be self-defeating, she added.

“Lowering health care claims by restricting access to needed health care is not a true response to controlling healthcare, healthcare costs or healthcare demand,” she said. “It only puts off necessary and preventive care, and therefore increases healthcare costs in future, even if there is some element of short-term gain.”

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The Senate is expected to vote later this week on a Democratic proposal to extend expiring enhanced Affordable Care Act tax credits and prevent health insurance premiums from skyrocketing for millions of Americans.

Sen. Minority Leader Chuck Schumer, D-N.Y., said Democrats will force a vote on a bill that he described as a “clean” three-year extension of the enhanced ACA credits that first passed as part of the American Rescue Plan Act in 2021, and capping premiums for an average marketplace plan to 8.5% of income.

Enhanced tax credits that enabled more people to buy coverage in the ACA marketplace were part of the American Rescue Plan and Inflation Reduction Act of 2021. However, those enhanced tax credits are due to expire Dec. 31, unless Congress acts to extend them. The end of enhanced tax credits means that millions of Americans who use them to obtain coverage will see their health care premiums more than double on average.

However, it’s doubtful that the bill will have enough votes in the Senate to pass. The Democratic proposal needs 60 votes to end debate and advance to a final simple-majority vote in the Senate, where Republicans control 53 of 100 seats.

House Republicans propose two more ACA options

Meanwhile, two more options have been proposed by Senate Republicans in an attempt to solve the standoff over the expiring enhanced tax credits. These proposals are in addition to several other plans announced by House and Senate members of both parties.

The most recent proposals include:

• The Moreno-Collins CARE Act.Bernie Moreno, R-Ohio and Susan Collins, R-Main, introduced the Consumer Affordability and Responsibility Enhancement Act that would create a two-year extension of expiring ACA enhanced subsidies.

Like other plans that have been floated, the bill would include an income cap for the enhanced tax credits — for households earning $200,000 or more — along with ending $0 premiums by requiring a $25 minimum monthly payment.

• Cassidy-Crapo framework. A proposal by Sens. Bill Cassidy, R-La., and Mike Crapo, R-Idaho, doesn’t extend the subsidies but would redirect that money into health savings accounts paired with bronze or catastrophic plans on the ACA exchanges.

Under the proposal, certain ACA enrollees earning less than 700% of the federal poverty level would receive $1,000 in an HSA if they’re 18 to 49 years old, and $1,500 if they’re 50 to 64.

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New York Life sold 50% more annuities through three quarters than in 2024, LIMRA reported in its updated sales rankings.

The rankings show New York Life nipping at the heels of perennial sales leader Athene Annuity & Life with $24.8 billion in sales. Athene sold $26.8 billion worth of annuities through Q3, a 4.3% decrease from last year.

Corebridge Financial, Equitable Financial, and Allianz Life of North America rounded out the top five. Massachusetts Mutual Life took the biggest drop, falling from third place and $19.4 billion in annuity sales through Q3 2024, to eighth place and $14.3 billion in sales this year.

Total annuity sales increased 4% to $121.2 billion in the third quarter of 2025, setting yet another quarterly sales record, LIMRA reported. This marks the eighth consecutive quarter of $100+ billion in sales.

Year-to-date annuity sales totaled $347 billion, up about 4% year-over-year. It marks the highest total ever recorded in a nine-month period, according to results from LIMRA’s U.S. Individual Annuity Sales Survey, which represents 89% of the total U.S. annuity market.

“Registered annuity products – traditional variable annuities and registered index-linked annuities – posted double-digit growth, contributing to the overall growth in quarterly sales. Despite continued market volatility, the equity market’s overall performance attracted investors looking to counter persistent inflation,” Bryan Hodgens, senior vice president and head of LIMRA research, said last month. “Although the Federal Reserve’s expected interest rate cuts will likely continue to dampen fixed annuity sales gains, LIMRA is projecting annuity sales to surpass $450 billion in 2025.”

LIMRA released updated Q3 annuity sales numbers Tuesday:

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A California judge granted several motions to dismiss a lawsuit filed by a group of 29 plaintiffs who claim that Penn Mutual Life Insurance Co. and several co-defendants ran a tax-avoidance scam around whole life insurance policies.

In her ruling last week, however, Judge Sherilyn Peace Garnett left open the option for plaintiffs to refile the lawsuit.

“We anticipated that the court would want us to prepare a more detailed complaint, so this wasn’t a surprise,” Andrew B. Holmes, attorney for the plaintiffs, said via email. “We will be filing an amended complaint.”

The complaint, amended once already and filed in U.S. District Court for the Central District of California, alleges fraud and negligence, as well as violations of the Racketeer Influenced and Corrupt Organizations Act (RICO).

Plaintiffs come from states around the country and ask the court for $23.5 million in damages.

The defendants include former Penn Mutual agent Randall Scott Boll, who was indicted in 2021 on four counts related to violations of federal money laundering laws and banking regulations.

Boll pleaded guilty to one count of conspiracy to cause a financial institution to fail to file currency transaction reports and to structure financial transactions. He was sentenced to one day behind bars in California, court records say, and two years of supervised release.

According to court updates, Boll is living in Arizona and pursuing a divinity degree at Liberty University. He could not be reached for comment. Penn Mutual did not respond to messages seeking comment.

‘Significant tax advantages’

The lawsuit alleges that Penn Mutual and Boll – along with several other law, lending, accounting and financial planning firms also named as defendants – constituted a “High-Premium Insurance Enterprise.”

“The HPI Enterprise was an organization consisting of individuals and business entities associated for the common or shared purpose of selling, promoting and/or marketing high-premium life insurance policies and related products to plaintiffs through deceptive and misleading sales tactics and materials, and deriving profits from those activities,” the lawsuit reads.

Penn Mutual whole life policies were aggressively marketed as offering “significant tax advantages,” plaintiffs say. “Boll and other members and associates of the enterprise would reap high commissions (as much as 75-125% of the initial annual premium paid by the policyholder) for each HPI policy sold.”

Plaintiffs accuse Penn Mutual of ignoring its own underwriting guidelines “by repeatedly accepting insurance applications for plaintiffs that … falsely inflated the net worth of plaintiffs.” The policies equated to big profits for the insurer because all of plaintiffs’ policies “were designed to (and in fact did) terminate long before the insureds’ life expectancies,” the lawsuit states.

One type of “sham tax avoidance strategy” incorporated premium financing life insurance loans to finance the policies, the lawsuit alleges.

“The HPI Enterprise Defendants took advantage of plaintiffs’ lack of sophistication and convinced them that such policies were affordable due to the tax deductions they would generate—in essence promising them that the HPI policies would pay for themselves,” the lawsuit says.

Nothing proven

Judge Peace Garnett acknowledged that the plaintiffs “have sufficiently alleged facts to show Penn’s liability for Boll’s conduct” under the independent agent relationship. However, that burden of proof was not met as it relates to Wintrust Life Finance.

Plaintiffs allege that Boll encouraged them to take out premium-financed life insurance loans from Wintrust. But Judge Peace Garnett drew a sharp line at tying Boll to the finance company in granting Wintrust’s motion to dismiss.

“Plaintiffs do not adequately allege any representation that Wintrust made to Plaintiffs, do not adequately allege Wintrust was aware Boll was promoting its products for use in a fraudulent tax scheme, and do not adequately allege that Boll acted as Wintrust’s agent,” she wrote.

Using life insurance in a premium financing strategy to manage tax obligations remains a controversial tactic within the industry.

Plaintiffs say they received none of the promised tax benefits and lost “significant sums” through premiums, interest, and fees they paid to the defendants. The HPI enterprise dates to “at least March of 2016,” the lawsuit says, “and is continuing, because it is an ongoing business practice of the HPI Enterprise Defendants.”

Founded in 1847, Penn Mutual boasts an A+ Superior financial rating from AM Best.

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Is the holiday season a good time to discuss long-term care with family?  OneAmerica Financial’s findings showed a 20% increase in long-term care claims in November and December versus the other months of the year.

“It’s a natural moment to have those meaningful conversations about how families can support each other and plan for things like long-term care to ensure their loved ones are protected,” said Amy Chinn, vice president of long-term care claims at  OneAmerica.

Derek Ober, founder of Ober Financial, a Northwestern Mutual agency, sees a jump in long-term care inquiries in January and February. “I generally get inquiries around long-term care planning as more people may be having the difficult conversation while meeting with their family members over the holidays.”

Ober notes that people are worried they’ll need long-term care. He believes it’s the responsibility of the advisor to bring it up and start the conversation. “With people living longer, they may need help with activities for daily living. It helps to have a plan in place,” he says.

“One of the goals of having a long-term care policy in place is to make sure all your family is still speaking after you are no longer at the Thanksgiving table. Having a care need usually lands on one of the siblings, which can cause hostility and hard feelings. My goal is to keep all the family together emotionally, even during or after a long-term care need,” says Angela McLaughlin, a career agent with One Team Financial Group, a general agency of OneAmerica Financial.

A OneAmerica study, 2024 Long-Term Care Consumer Study, found that 74% of Americans think they are likely to need long-term care in the future, and nearly two-thirds (64%) say this planning is a priority — but only 33% are confident in their current plans.

According to the Department of Health and Human Services, a majority of Americans turning 65 (56%) will need some level of long-term care services within their lifetime. However, industry trade association Limra estimates just 3% of Americans over age 50 have any long-term care insurance protection, which could lead to many people having to pay for these expenses on their own.

And the expenses can add up quickly. According to the American Association for Long-Term Care Insurance, the average out-of-pocket costs are $140,000 for those individuals who use paid long-term support services. Roughly 17% will spend over $100,000, and almost 9% will spend over $250,000 on these services.

“People need to know that Medicare will not cover long-term care costs. It’s always better to have it and not need it than to need it and not have it. I’ve seen the difference it makes for people who have this coverage when they need it,” Christopher Koon, Partner, Socium Financial, a Northwestern Mutual private client group, says.

Consumers are looking for help from an advisor when it comes to planning for their needs. The OneAmerica study reveals that 44% of Americans want support when selecting long-term care protection.

According to Karen Terry, corporate vice president and head of LIMRA insurance research, “Because long-term care is a complex product, it is purchased with the help of a financial professional.

“It’s not like you wake up one day and see the need for long-term care insurance. I think it’s really the value of having an advisor who can explain the various options,” says Koon.

Caregivers see the need

According to Limra data, more than 7 in 10 say being a caregiver has impacted how they think about their own future care needs. These consumers are more likely to want to proactively plan for their potential LTC needs and worry about becoming a burden on their loved ones. Consumers, in general, say they are attracted to the flexibility of the products and the peace of mind they get because they have financial protection should they need care.

“Those who have experienced an event where a family member needed care are more open to long-term care planning. It’s one of those products you don’t sell – people see the need,” Koon notes.

“I start with asking them if they have any experience with such a need. If so, I listen and ask them about the expense portion of the care need, as well as the emotional stress involved. If they do not, I usually tell them my experience with my father and then get into the cost of care in their area. Most people have some idea of the costs but never consider what this looks like for them,” McLaughlin says

According to the OneAmerica consumer study, 75% who are planning for long-term care said that witnessing a loved one in need of care was a major catalyst for buying protection.

Various product options

According to Limra’s Karen Terry, there are a variety of products, including individual stand-alone long-term care insurance, life insurance/LTC combination products, life insurance/critical illness policies, and a small number of companies offer an Annuity/LTC product. “They range from being less expensive with less benefits to more expensive with more benefits,” she says.

According to Limra, the market share from new products is 8% individual long-term care insurance, 25% are life/LTC combination products, and 67% are life insurance/critical illness products.

“When it comes to deciding on which product, there is no perfect solution because we don’t know what the future holds. People need to look at how much they think they’ll need,” Ober says.

“If clients buy a combination life insurance/LTC product, they have the advantage of a death benefit, but also having some money set aside for long-term care if needed. I always say that having something is always better than having nothing,” he adds.

Koon agrees. “I encourage these hybrid products for younger people because they can be very affordable. Long-term care coverage is not as expensive if you’re young, healthy and mobile. I like to bring up the need for LTC planning with my clients in their late 40s and early 50s. You need to educate your clients on what the various options are.”

Long-term care products are evolving 

“Historically, a lot of companies went out of business because their products weren’t priced correctly. Now the pricing is better, so hopefully more companies will enter the market,” Koon says.

In a new study, conducted jointly by LIMRA and EY, 4 in 10 carriers surveyed said they expected long-term care product innovation to be the number one driver of growth in the coming years. Limra also noted that companies have already begun to enhance their products with caregiver resources and wellness programs.

“If you don’t plan for long-term care, the cost if you need it can be out of reach. For families, it provides dignity having someone else take care of the person’s basic needs so they can spend quality time with them,” Koon says

He adds that hybrid life/LTC products have gotten very popular. “Similar to homeowners’ insurance, people don’t like paying for something they may or may not need. These hybrid products solve that because in the end we’re all going to die,” he says.

According to the OneAmerica study, 75% of younger Americans (ages 40-49) are prioritizing long-term care planning. In total, 55% of those 40-49 years old are confident in their current plans — just 17% of those over age 60 express the same confidence.

McLaughlin urges her clients not to wait. “The longer you wait, the more money you will spend on the insurance and your insurability will not be guaranteed. People do not tend to become healthier with age,” she says. “Take a look at the costs and what it would do to your current retirement planning if such a need would arise.”

Perceived cost and competing financial priorities, especially among older consumers, serve as significant hurdles in the decision to purchase long-term care insurance. “With more choices on the market, people are more likely to find the care they need at an affordable price. It might not be as expensive as most people think,” Chinn says.

Terry agrees. “Long-term care insurance used to be a lot more expensive since it needed to be purchased with a single premium or with a few payments. Now the payments have been extended, making it more affordable.”

“As someone experienced in this field, my attitude is that if you have the funding available, it is truly a legacy protector due to the cost of care increasing so dramatically, as well as the length of claim we see due to the cognitive decline issues on the rise in our society,” McLaughlin says.

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Regulators discussed the purpose of risk-based capital data last week as work progressed on an at-times controversial set of RBC principles.

The Risk-Based Capital Model Governance Task Force will meet in person Dec. 10 at the National Association of Insurance Commissioners’ fall meeting in Hollywood, Fla. Work has progressed for months on the principles, with one aspect drawing most of the attention: Language banning insurance companies from publishing their RBC ratio.

Wednesday’s meeting featured much less friction as regulators fielded comments on the purpose of RBC – to identify “potentially weakly capitalized” companies.

RBC numbers are a regular feature of public companies’ financial reports and earnings calls with Wall Street analysts. RBC requirements provide for a ratio to assess the level of risk associated with an insurance company’s assets.

Working with Bridgeway Analytics, NAIC regulators embarked earlier this year on the effort to address “gaps and inconsistencies in the RBC formula and suggestions (solutions) for what could improve/address such gaps.” Other goals included plans for future updates to RBC, as well as an education campaign to highlight the benefits of RBC.

An Ohio proposal to prohibit any insurer from putting its RBC ratio in its earnings releases, press releases, webcast materials, or presentations drew most of the negative feedback on the RBC principles. Regulators are concerned that the wide dissemination of RBC figures is leading to a misunderstanding of insurance companies’ financial strength.

Periodic review of RBC formulas

Several groups spoke in support of their comment letters during Wednesday’s call, with only mild disagreements aired. UnitedHealth Group suggested that the process should include a “periodic review of how each formula as a whole is performing relative to regulators’ expectations.”

“In the end, the test of the formulas is whether, in fact, they are capturing a significant number of the companies that do, in fact, prove to be weakly capitalized,” said James R. Braue, vice president of actuarial services for UnitedHealth Group. “To the extent that they are not identifying those companies, do we understand why they are not?”

Amnon Levy, founder and CEO of Bridgeway Analytics, explained that regulators opted for “parsimony” of language as the drafts of RBC principles evolved, “in part, to avoid errors of omission that can result from including too many details, and to ensure the concepts remain relevant over time.”

Some commenters questioned whether the principles are too parsimonious.

“[W]e believe that the principles themselves should not be oversimplified or stated too briefly,” reads a comment letter from Risk Regulatory Consulting. “While not every detail can be included, we believe it is important to include enough detail to avoid ambiguity and misinterpretation.”

RRC included the example of how “Emerging Risks” is addressed in a July 3 draft, compared to how the language was pared down in the current draft:

July 3 draft: Emerging Risks. Evaluation of emerging risks should consider:

a. The level and growth in exposure to the emerging risk;
b. How quickly the risk can become materially incorporated into insurers’ business;
c. Industry exposure to the risk, as well as industry segment exposure; and
d. Identification and measurement limitations of emerging risks.

In the Sept. 23, 2025 draft:

Emerging Risks. Updated to incorporate emerging risks (including macroprudential risk) by
the time they become material to the industry or an identifiable segment of companies.

It is possible to “leave out so much detail” that the principles become “vague,” said Lynn Manchester, director with RRC.

Work will continue on the RBC principles, with the task force discussing a 2026 plan and goals during its meeting on Dec. 10, members said.

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