Prudential Financial Exits the Long Term Care Insurance Arena
Prudential Halts Sales of Long Term Care Insurance
Prudential, the 2nd largest life insurance company in the U.S. announced as of April 1st, 2012 it will no longer offer individual long term care insurance policies for sale following the lead of recent companies to exit the marketplace, Guardian Life Insurance Company and Met Life Insurance Company.
Prudential will, however, continue to offer employer group-sponsored long term care insurance. which typically offers reduced benefits at a higher premium cost to employees than the ultra competitive (and discounted) individual sales arena.
Prudential will honor existing long term care insurance contracts sold to individuals, and the terms of these policies, which are guaranteed renewable, will not change.
In its press release, Malcolm Cheung VP of Long Term Care stated Prudential "will focus our resources and capital on the group market where we see the greatest opportunity."
Group long term care insurance policies have higher premiums, and are thus more profitable to long term care insurance companies than sales of medically underwritten individual policies which are more heavily price-driven by brokers.
Long Term Care Insurance Companies to Still Consider
Prudential's exit this morning still leaves a highly concentrated core group of strong long term care insurance companies from which to obtain coverage.
Genworth Financial, still the largest long term care insurance company in the United States isn't planning to leave the business anytime soon.
Other strong companies with high financial ratings like Genworth include Mass Mutual, Transamerica, Mutual of Omaha, New York Life, John Hancock, Northwestern Mutual and State Farm.
A consumer will be well served to have coverage with all of these companies.
The Right Time to Buy Long Term Care Insurance is Today
Prudential's decision to leave the long term care insurance arena today sends a strong message if you are considering buying long term care insurance.
When a large life insurance and long term care insurance company decides to stop selling individual long term care insurance because it does not view the sales as profitable the message is that the consumer is receiving significantly the best end of the bargain.
How can that be?
As most of you are aware, we are in a low interest rate environment.
Many long term care insurance buyers, however, include 5% compound automatic inflation growth in their benefits.
The low-interest rate environment is probably the single biggest factor in Prudential and other long term care insurance companies getting out of the business. Long term care insurance companies are making the decision that they do not wish to guarantee 5% growth in your benefits while at the same time setting aside at low interest rates its capital reserves for claims.
Thus, there is probably no better time to buy LTC insurance than today.
Many industry experts feel that within a few years the cost of the policies, and the kind of inflation protection available may be markedly different than the benefits included within long term care insurance policies available today.
At LTC Partner, we would like nothing more than to help you get approved for coverage. If you have any questions or would like to receive a free long term care insurance quote, please feel free to contact us toll free direct at 800-891-5824. Or simply complete our long term care insurance quote request form. We work with all of the leading long term care insurance companies and will help you get approved with a highly-rated company.
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