Long-Term Industry Continues to Change

The Long-Term Care Insurance market has experienced numerous changes over the last couple years. A few major companies have announced that they will discontinue selling long-term care policies. Among this group of insurers are Prudential Financial, Unum Group and Met Life. According to information that I follow, 10 out of the top 20 insurance companies have exited the long-term care market in the last five years.

Over the past several months, I have followed the changes to the long-term care industry. During this time, I kept thinking about John Hancock and wondering what this company would do to handle the rising out-flow of long-term care benefits. For the companies that have remained in the long-term care business, rate increases are becoming the norm and this now includes John Hancock. According to Roy Anderson, John Hancock’s Vice President of Corporate Communications, “The long-term care industry is still young, and only now is seeing actual usage data which indicate the need for rate increases.” Corresponding with this announcement, the Chicago Sun Times recently published a story about a couple in Illinois facing a 90% increase to their long-term care premium. Click on link to view full article: http://www.suntimes.com/business/savage/11378009-452/how-is-a-90-long-term-care-rate-hike-ok.html. The Star-Tribune in Minnesota recently reported a similar story.  Click on the following link: http://www.startribune.com/business/yourmoney/143267316.html?source=error.

Hopefully, this information helps you assist your clients with long-term care decisions and gives you insight into this volatile piece of the insurance market. I question whether any company can really make money in the long-term care market. With costs rising significantly, the option of long-term care insurance may become too difficult for people to stomach.