Long-term care insurance has had its troubles the last couple of years. Sales of the policies still haven’t approached sales levels many anticipated as the Baby Boomers age. There are a range of reasons: high cost, complicated terms, people not wanting to think about it, and more. The companies also are troubled by low interest rates, poor returns in other investments, people living longer than expected, fewer people letting their policies lapse than expected, and higher claims and costs than forecast. Some insurers responded by raising rates significantly. Others decided to leave the market.
Prudential Financial joined the list of insurers abandoning the long-term care insurance market. (Subscription might be required.) Prudential is leaving the individual market but will continue to sell through employer-sponsored plans. Unum last month said it would leave the employer-plan market.
Malcolm Cheung, a Prudential executive, said the decision to quit sales of the policies to individuals “reflects the challenging economics of the individual market and our desire to focus resources and capital on the group market where we see the greatest opportunity.”
Prudential said it would honor existing policies and contract terms so long as premiums are paid on time. Those premiums can change subject to regulatory approval.
There still are about 10 large insurers offering LTCI and a number of smaller insurers.