There are many causes of the challenges faced by this sector of the industry.
The long term care insurance sector of the industry has been facing a lot of difficulties over the last few years due to a lack of new customers and increased use by older policyholders.
Carriers have been giving up on the sector altogether and have been dropping out of it.
The long term care insurance companies that have decided to hold their ground within the sector are resorting to efforts that are less favorable to the consumer and policyholder, including increased premiums, discount slashing, and the removal of many of the more complete and beneficial products. All of this may be causing some immediate savings, but it is also only functioning to drive consumers even further away from a purchase.
The problem lies in two fundamental long term care insurance industry sector issues.
The first is that fewer buyers are dropping their coverage than was predicted by the industry. By hanging on to their policies, it means that they are more likely to actually be able to make a claim. This is causing costs to the long term care insurance companies to skyrocket. The second is that the low interest rates are causing all profits that were not generated by profits to shrink.
The outcome of these two major factors is that the long term care insurance sector of the industry has been undergoing some dramatic changes to try to survive. However, with all of the tightening and trimming, it has become even less appealing than it had previously been when the struggle started in the first place.
It looks as though the tactics currently being employed by the industry could actually speed up its own demise. It may be time for the companies within that sector to step back and take another look at the opportunities that are available to them. This may require a rethink of the entire way that the sector functions and a massive overhaul of the process. Otherwise, the appeal will have become small enough, and the expense large enough, that consumers will resort to other areas and techniques to provide their futures with the financial protection they seek.