The document discusses the evolution of life-LTC combination products from 1987 to 2014. It begins by defining different types of combination products including linked benefits and LTC riders. It then summarizes key developments in the market over this time period, including the release of the first combination product in 1987, the addition of extension of benefits riders, and increased company participation leading to rapid growth in sales volumes and premiums in the late 2000s. A turning point was Lincoln MoneyGuard's decision in the mid-2010s to incentivize their wholesaling force to sell multi-pay versions, which changed the marketplace dynamics and consumer preferences.

1. 10/1/15
Evolution and Today’s use of Life-
LTC Combination Products
Parag Shah
Vice President Product Design
Pacific Life

2. 2
DEFINITIONS Life-LTC Combination Products
LIFE-LTC Combination Products
Linked Benefits ‘LTC’ Riders
Single Pay Multi-Pay
CIR
Chronic Illness
Riders
LTCR
Long Term Care
Riders
Characteristics:
Acceleration and Extension of Benefits
(ABR&EBR)
High Liquidity. Traditionally Return of Premium.
Integrated Product
Characteristics:
Optional Rider, attachable to multiple products.
Typically only Acceleration of Death Benefit
(ABR).
Single Premium. Can
be on UL or WL
chassis.
Many times on the
same chassis as Single
Premium. Pay
options generally 10
years or less
101g qualified. Can we
with or without an front
charge. Charge drives
whether dollar for dollar
or some lien/discount
method
7702B qualified.
Traditionally with a
charge for the rider
and a dollar for dollar
benefit.

3. 3
DEFINITIONS Life-LTC Combination Products
LIFE-LTC Combination Products
Linked Benefits
Single Pay Multi-Pay
Policies
14,168
Premium
$1,109M
Policies
7,368
Premium
$102M
Policies
43,005
Premium
$601M
Policies
35,080
Premium
$593M
‘LTC’ Riders
CIR
Chronic Illness
Riders
LTCR
Long Term Care
Riders
Characteristics:
Optional Rider, attachable to multiple products.
Typically only Acceleration of Death Benefit
(ABR).
Characteristics:
Acceleration and Extension of Benefits
(ABR&EBR)
High Liquidity. Traditionally Return of Premium.
Integrated Product

4. 4
Combo Products Meet A Variety of Consumer Needs
Life Insurance Needs
LongTermCareNeeds
Stand
Alone
LTC
Linked
Single
Pay
Linked
Multi-
Pay
LTC
Riders
CIR
Riders
Life
Insurance

5. When was the first Combination Product Released?
5
Trivia Question
a) 1981
c) 1992
d) 1995
e) 2003
b) 1987

6. EVOLUTION – LINKED BENEFIT (ASSET BASED)
6
Linked Benefit

7. 1987
7

8. The First Combo Product was released by First Penn Pacific Life Insurance Company.
Built on a Universal Life Chassis.
8
1987: A long time ago, in a Galaxy known as Chicago
1987
First Combo
product from
First Penn
Pacific
(Lincoln)
Linked Benefit

9. Buying both Life & Long Term Care
Cost synergies because not paying duplicate Death Benefit and LTC
9
Simple Concept
Life Policy LTC Policy
Deductions
(withdrawals)

10. 1988
10

11. Golden Rule develops a combo Life plus LTC product to meet potential regulations
in the health care space.
They build their combo product on a Whole Life Chassis. Product accelerates the
Life policy for LTC (no Extension of Benefits)
11
1988 : UNRELATED DEVELOPMENT
First Penn Pacific & Golden Rule
The first two companies in the
Combo Marketplace!
1987
First Combo
product from
First Penn
Pacific
(Lincoln)
1988
Golden Rule
(OneAmerica)
develops
AssetCare (WL
integrated LTC)
Linked Benefit

12. 1995
12

13. Golden Rule adds EBR to their product.
Extension of Benefit Rider provides Long Term Care benefit after the Life Policy has
been exhausted.
13
1995 : Extension of Benefits Rider (EBR)
19881987
Golden Rule
(OneAmerica)
develops
AssetCare (WL
integrated LTC)
First Combo
product from
First Penn
Pacific
(Lincoln)
Golden Rule
adds an
Extension of
Benefits
option
1995
Linked Benefit

14. 2000
14

15. Between 1995 – 2000, First Penn Pacific introduced the MoneyGuard name into the
market. MoneyGuard had both the ABR & EBR.
MoneyGuard sales had hit $100 million in sales but had plateaued.
15
2000 : MONEYGUARD. The Kleenex of the Linked Benefit Market
19881987
Golden Rule
(OneAmerica)
develops
AssetCare (WL
integrated LTC)
First Combo
product from
First Penn
Pacific
(Lincoln)
Golden Rule
adds an
Extension of
Benefits
option
1995 2000
MoneyGuard
~$100
million
Tough Sell
• Full ROP
• LTC Benefits
• Death Benefit
Distribution Challenges
• Competition for $s with Life Insurance Commission
• Baby Boomers not there yet
• Few competitors
Linked Benefit

16. 2003
16

17. Lincoln transfers out MoneyGuard from First Penn Pacific
“Certain MoneyGuard experts leave First Penn/Lincoln …”
17
2003 : MONEYGUARD is LINCOLN MONEYGUARD
19881987
Golden Rule
(OneAmerica)
develops
AssetCare (WL
integrated LTC)
First Combo
product from
First Penn
Pacific
(Lincoln)
Golden Rule
adds an
Extension of
Benefits
option
1995 2000
MoneyGuard
~$100
million
2003
Linked Benefit

18. 2005
18

19. 19
2005 : MONEYGUARD REDESIGNED – MARKET LIFTOFF
19881987
Golden Rule
(OneAmerica)
develops
AssetCare (WL
integrated LTC)
First Combo
product from
First Penn
Pacific
(Lincoln)
Golden Rule
adds an
Extension of
Benefits
option
1995 2000
MoneyGuard
~$100
million
Linked Benefit
– Until now, MoneyGuard was a fully underwritten product.
– Sales continued to increasing from 2000.
– Sales in Banks / Wirehouse were gaining traction.
– Lincoln redesigns MoneyGuard to a Simplified Underwriting with Cognitive testing
– They also build a dedicated Wholesaling force focused on just selling
MoneyGuard.
2005
MoneyGuard
moves to
Dedicated
Wholesaler and
Simplified
Underwriting
This makes the product
‘Transactional’ & removes
the Distribution challenge.

20. 2006
20

21. 2003 “Certain MoneyGuard experts leave First Penn/Lincoln …”
They land at Genworth and they create their version of MoneyGuard known as TLC.
21
2006 : Next Competitor is Born - GENWORTH
19881987
Golden Rule
(OneAmerica)
develops
AssetCare (WL
integrated LTC)
First Combo
product from
First Penn
Pacific
(Lincoln)
Golden Rule
adds an
Extension of
Benefits
option
1995 2000
MoneyGuard
~$100
million
2005
MoneyGuard
moves to
Dedicated
Wholesaler and
Simplified
Underwriting
2006
Genworth
TLC
Launched
Linked Benefit

22. 2009
22

23. Linked Benefit Market, composed of ~3 companies hit a half a billion $s.
MoneyGuard is driving the growth with over 80%+ market share.
Other companies start to take notice.
23
2009 : AMAZING MARKET GROWTH
19881987
Golden Rule
(OneAmerica)
develops
AssetCare (WL
integrated LTC)
First Combo
product from
First Penn
Pacific
(Lincoln)
Golden Rule
adds an
Extension of
Benefits
option
1995 2000
MoneyGuard
~$100
million
2005
MoneyGuard
moves to
Dedicated
Wholesaler and
Simplified
Underwriting
2006
Genworth
TLC
Launched
2009
$506m of
premium on
7,849 polices
Linked Benefit

24. 2011
24

25. Linked Benefit Market breaks $1 billion with over 21,000 policies.
John Hancock, who was in the ‘LTC Rider’ market, launches their Linked Benefit
Solution in 2011.
25
2011 NEW short term PLAYERS ENTER
19881987
Golden Rule
(OneAmerica)
develops
AssetCare (WL
integrated LTC)
First Combo
product from
First Penn
Pacific
(Lincoln)
Golden Rule
adds an
Extension of
Benefits
option
1995 2000
MoneyGuard
~$100
million
2005
MoneyGuard
moves to
Dedicated
Wholesaler and
Simplified
Underwriting
2006
Genworth
TLC
Launched
2009
$506m of
premium on
7,849 polices
2011
John Hancock
launches Linked
Benefit Product
Sun Life also enters.
However, neither stays in the market long.
Linked Benefit
However, neither stays in the market long.
Sun Life also enters.

26. 2012
26

27. Pacific Life enters the Asset Based Market with their product called PremierCare.
PremierCare is the first Combo product with gender distinct LTC rates.
In the Linked Benefit market where inflation benefits were hardly being sold, Pacific
Life launches with a focus on buying long term care with inflation benefit.
In a market where ~5 – 10% of the sales actually elected an inflation benefit option,
Pacific Life starts selling 75%+ of the policies with inflation options.
27
2012 : INFLATION IS THE NEW STORY
19881987
Golden Rule
(OneAmerica)
develops
AssetCare (WL
integrated LTC)
First Combo
product from
First Penn
Pacific
(Lincoln)
Golden Rule
adds an
Extension of
Benefits
option
1995 2000
MoneyGuard
~$100
million
2005
MoneyGuard
moves to
Dedicated
Wholesaler and
Simplified
Underwriting
2006
Genworth
TLC
Launched
2009
$506m of
premium on
7,849 polices
2012
Pacific Life
launches
PremierCare
Linked Benefit

28. 28
2013

29. Nationwide joins the market with their Asset Based solution.
They build on their success in the ‘LTC Rider’ market and build their CareMatters
product with an INDEMNITY design.
The Asset Based Market breaks $1.5 billions with almost 24,000 policies
29
2013 : MORE PLAYERS
19881987
Golden Rule
(OneAmerica)
develops
AssetCare (WL
integrated LTC)
First Combo
product from
First Penn
Pacific
(Lincoln)
Golden Rule
adds an
Extension of
Benefits
option
1995 2000
MoneyGuard
~$100
million
2005
MoneyGuard
moves to
Dedicated
Wholesaler and
Simplified
Underwriting
2006
Genworth
TLC
Launched
2009
$506m of
premium on
7,849 polices
2012
Pacific Life
launches
PremierCare
Nationwide
Launches
CareMatters
2013
Linked Benefit

30. 2014
30

31. MoneyGuard changes the marketplace by removing their Day 1 Full Return of
Premium benefit.
Asset Based Marketplace becomes the Linked Benefits marketplace.
New York Life and MassMutual join the market.
31
2014 : RETURN OF PREMIUM IS THE NEW OLD STORY
19881987
Golden Rule
(OneAmerica)
develops
AssetCare (WL
integrated LTC)
First Combo
product from
First Penn
Pacific
(Lincoln)
Golden Rule
adds an
Extension of
Benefits
option
1995 2000
MoneyGuard
~$100
million
2005
MoneyGuard
moves to
Dedicated
Wholesaler and
Simplified
Underwriting
2006
Genworth
TLC
Launched
2009
$506m of
premium on
7,849 polices
2012
Pacific Life
launches
PremierCare
Nationwide
Launches
CareMatters
2013 2014
NY Life and
MassMutual
Linked Benefit

32. Lincoln MoneyGuard
Awareness, huge dedicated wholesaling force
32
Diverse Market Place – Offering Consumer Options
Linked Benefit
Pacific Life PremierCare
Full ROP, Inflation Story
Genworth
Full Underwriting, Multiple Risk Classes
OneAmerica
Portfolio of Linked Solutions [Life (single & joint life) & Annuity]. Lifetime LTC
Benefits
Nationwide
Indemnity
MassMutual
Dividends

33. $506.3
$838.1
$1,426.7 $1,451.3
$1,505.1
$1,211.6
7,849
12,746
21,181
20,807
23,701
21,536
0
5,000
10,000
15,000
20,000
25,000
$0
$200
$400
$600
$800
$1,000
$1,200
$1,400
$1,600
2009 2010 2011 2012 2013 2014
Premium ($m) Policies
Source: LIMRA US Individual Life Combination Products: LTC (Only), Extension (Only), All Products, All Premiums 33
Linked Benefit Sales
Linked Benefit
P
o
l
i
c
i
e
s
P
r
e
m
i
u
m

34. 2012
34

35. $506.3
$838.1
$1,426.7 $1,451.3
7,849
12,746
21,181
20,807
0
5,000
10,000
15,000
20,000
25,000
$0
$200
$400
$600
$800
$1,000
$1,200
$1,400
$1,600
2009 2010 2011 2012
Premium ($m) Policies
Source: LIMRA US Individual Life Combination Products: LTC (Only), Extension (Only), All Products, All Premiums 35
HOW TO INVEST A $BILLION DOLLARS?
Linked Benefit
P
o
l
i
c
i
e
s
P
r
e
m
i
u
m
(
$
m
)

36. 36
SINGLE PAY (@10%) VS MULTI-PAY
Linked Benefit
P
o
l
i
c
i
e
s
P
r
e
m
i
u
m
49,941,806
143,340,414
6,851,126
17,910,773
7,236
11,932
19,881
19,305
613 832 1,300 1,502
0
2,500
5,000
7,500
10,000
12,500
15,000
17,500
20,000
0
20,000,000
40,000,000
60,000,000
80,000,000
100,000,000
120,000,000
140,000,000
160,000,000
2009 2010 2011 2012 2013 2014
Single Pay (10%) Multipay Single Pay Policies Multipay Policies
Source: LIMRA US Individual Life Combination Products: LTC (Only), Extension (Only), All Products, Single vs Reoccurring Premiums

37. Lincoln arrives at the conclusion that investing $1 billions annually is TOUGH.
Wouldn’t it be great if money came in over time?
MoneyGuard has offered a 3, 5, 7 & 10 Pay version for a decade plus.
But Nobody is buying!
37
REALLY!!! INTEREST RATES ARE LOW???
Linked Benefit
ACTUALLY:
NOBODY IS SELLING
Lincoln wasn’t compensating their Wholesaling force for selling their Multi-
Pay versions.
Solution : Pay (Encourage) Your Wholesalers to sell the Multi-Pay versions.
Price the Multi-Pay versions ‘better’ than your Single Pay

38. Source: LIMRA US Individual Life Combination Products: LTC (Only), Extension (Only), All Products, Single vs Reoccurring Premiums 38
THE POWER OF COMPENSATION
Linked Benefit
P
o
l
i
c
i
e
s
P
r
e
m
i
u
m
$17,910,773
$88,487,551
$102,163,261
1,502
5,894
7,368
0
2,500
5,000
7,500
10,000
12,500
15,000
17,500
20,000
0
20,000,000
40,000,000
60,000,000
80,000,000
100,000,000
120,000,000
140,000,000
160,000,000
2009 2010 2011 2012 2013 2014
Single Pay (10%) Multipay Single Pay Policies Multipay Policies
4x increase

39. 39
THE POWER OF MONEYGUARD
Linked Benefit
Solution : Pay (Encourage) Your Wholesalers to sell the Multi-Pay versions.
Price the Multi-Pay versions ‘better’ than your Single Pay
With the multi-pay change, MoneyGuard changes the Linked Benefit
marketplace.
Lincoln later removes the pricing benefit of their multi-pay solution, but the
market now knows to ask/consider multi-pay options.
Market Reaction: “The MoneyGuard Effect”
MoneyGuard competitors with multi-pay options see their sales increase
Nationwide launches their product (2013) with a multi-pay solution.
Pacific Life launches their Multi-Pay solution in 2015.

40. • Combination Market Place is composed of two markets : Linked Benefits (Asset
Based) and “LTC” Riders, but new products continue to blur the lines.
• Golden Rule and First Penn introduced products to the market back in late 1980s;
but the MoneyGuard changes in 2005 that helped drive the Linked Benefit market to
over $1 Billions [assisted by the Baby Boomers and their awareness of LTC].
• New entrants continue to join the market, each with a different market identity
offering consumers more options.
• In the Linked Benefits Market, multi-pay product options are growing while single
pay sales appear to be flattening/declining.
40
TAKE-A-WAYS
Linked Benefit
19881987
Golden Rule
develops
AssetCare
First Combo
product from
First Penn
Pacific
Golden Rule
adds an
Extension of
Benefits option
1995 2000
MoneyGuard
~$100
million
2005
MoneyGuard
moves to Dedicated
Wholesaler and
Simplified
Underwriting
2006
Genworth
TLC
Launched
2009
$506m of
premium on
7,849 polices
2012
Pacific Life
launches
PremierCare
Nationwide
Launches
CareMatters.
MoneyGuard focuses
on Multi-Pay
2013 2014
NY Life and
MassMutual enter
the market
The
Future
2011
Linked
Benefit
Market
breaks $1Bs