How one carrier is trying to repackage an unpopular product

In an attempt to better sell its long-term care insurance products to middle-class customers, New York Life (NYL) is adopting a new strategy.

Wall Street Journal reported that the insurer is selling a “simplified” version of its long-term care coverage. The new policies will typically cost at least $100 to $150 a month per person, based on age and designated benefit level. NYL is also offering as much as $500,000 in future payouts for couples.

Notably, NYL is scrapping the use of “elimination periods” for its reinvented long-term care coverage. Elimination periods are usually 90-day waiting periods before the policies pay out. With the new policies, NYL is using a one-time deductible.

According to the company, the elimination period concept can be off-putting to consumers because they might not immediately know how much they would need to pay when they are about to purchase a policy.

NYL does not guarantee that the initial premium rates will stay level for a consumer’s lifetime, but said that it is setting prices for the policies conservatively to minimize future rate increases. The company also said that it will continue to offer its existing standalone product.

The insurer’s decision to sell simplified long-term care insurance comes as the industry struggles with pricing mistakes. Many insurers specializing in the product are having difficulty setting prices on older policies, since their adjustments have resulted in steep increases for established customers and large charges against earnings, Wall Street Journal found.