The most recent offerings in this sector are including a larger number of options for consumers.
Long term care insurance companies have been observing an increasing trend of skyrocketing costs as their policyholders are living longer and are using more services such as assisted living facilities and nursing homes.
The value in this type of policy is in the fact that it covers these extremely expensive services.
However, because policyholders are generating far greater expenses than had been predicted, the long term care insurance industry is being faced with massive costs and is being forced to make serious changes to the products that are being offered. Unfortunately, this has increased the amount of confusion and cost that has been associated with those products over the last few years.
Many long term care insurance carriers are backing out of the sector altogether.
In order to continue the appeal of the coverage, while returning long term care insurance into a profitable environment, the products have needed to change. The prices in the industry are on the rise, while the number of companies offering this coverage is shrinking significantly.
According to a recent Investors Service report from Moody’s, over the last two years, there have been five major long term care insurance companies that have exited this market.
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The vice president of Moody’s, Laura Bazer, said that “As the market stands, currently there is considerable uncertainty as to its future.” She added that “The question is will new players come in and fill their shoes and will the products that the players are selling be useful to policyholders?”
Both current and future policyholders will soon be seeing this increase in their long term care insurance premiums – if they have not already. Though the existing policyholders won’t be affected until their insurers can obtain permission from their state insurance departments, it is likely that – for the most part – the higher prices will not be stopped, considering the state of the industry.
Data from the American Association of Long Term Care Insurance shows that, at the moment, the average cost of coverage for a 55 year old single person is $2,000. A couple of the same age will pay over $2,400 per year.