HOW TO EVALUATE THE COMPANY THAT IS SELLING LONG-TERM CARE INSURANCE?

A company’s ratings are important in the selection of any insurance product.   For long term care additional criterion should be evaluated because this is such a new product.    You want to know if the company you are considering for your long term care insurance has demonstrated a commitment to the long term care market.  Some companies began selling this product and then decided that it was not a profitable market for them.   As a rule of thumb, when an insurance company introduces a new product, it takes approximately 15 years for that company to determine profitability.  We have seen large, reputable companies get in the long term care insurance market, stay a few years and then decide to get out of the long term care insurance market.  In some cases the policy holders that own these policies have seen significant rate increases, but in most cases the rates have not been affected due to the company choosing to stop offering the product.   I personally own a long term care policy that I purchased 20 years ago.  The company no longer sells long term care and I have not seen any changes to the service I have received or had any rate increases. I was careful to choose an insurance company with an excellent reputation and strong financial ratings.

It is recommended that you buy long term care from an insurance company that has been selling long term care for a minimum of 10 years and are selling their product in every state.   Buy from a large national company that has a variety of insurance products such as long term care insurance, life insurance, annuities, mutual funds, 401k plans, etc.  Long term care is just a part of a comprehensive portfolio.  You can find out about an insurance company’s ratings by calling one or more of the independent rating services listed below.  AM Best is probably the most well known rating service.  Be certain that you buy your long term care insurance from a company that has ‘A’ or better from AM Best.  Their phone number is 908-439-2200.  Other rating services are Standard and Poor’s (212-438-7280), Moody’s (212-553-1658), and Fitch (800-853-4842).