Apr 24th, 2012
Every type of insurance has its major players, and it seems that the players are different for different types of coverage. For example, for auto and property insurance, State Farm is the dominant company, followed by major carriers like Progressive, Geico, Nationwide, Allstate, etc. Of those insurance companies, only State Farm also offers Long Term Care Insurance, and it is a niche market for them when it comes to market share.
Top Long Term Care Insurance Companies
Looking online, it seems every site has a different definition of “top” and “leading” insurance companies. It generally revolves around the insurers that particular site is selling. We will qualify our “Leading Long Term Care Insurance Companies” statement: we base them on new sales in 2012: market share and consumer demand. Companies that were once top Long Term Care Insurance companies just a few years back now are in diminished positions because of mistakes in pricing and marketing.
Genworth Long Term Care Insurance
With an endorsement by AARP and the largest field sales force of anyone, Genworth is the 800 lb gorilla of Long Term Care Insurance. The Privileged Choice Flex plan debuted in 2011 and as of Q2 2012 often has competitive pricing, especially for couples because of its 40% couples discount (which also applies to partners).
Genworth offers more benefit configurations than virtually any other insurer and is one of only a few carriers to offer California Partnership policies. Individual Genworth policies, like all the others listed below, are intended to be Tax-Qualified.
Mutual of Omaha Insurance Company
utual of Omaha, famous for the Wild Kingdom series among other things, is an American icon and one of only five mutual insurers in the Long Term Care Insurance market. In most states, Mutual of Omaha markets its third-generation product, Mutual Care Plus. In early 2012, Mutual of Omaha introduced a dramatic repricing of its coverage on new business which made policies with 5% compound inflation protection substantially more expensive than they had been historically.
Mutual of Omaha is worth considering, especially for those interested in coverage in the United Kingdom or Canada, as many Mutual of Omaha Long Term Care policies consider UK/Canada the same as the United States.
United of Omaha
United of Omaha is a related company to Mutual of Omaha. It is not a mutual insurance company, however. As of early 2012, United of Omaha is one of only several carriers to have the distinction of no Long Term Care Insurance Rate Increases under its belt.
Transamerica Life Insurance Company
One cannot think of Transamerica without thinking of the iconic building above the San Francisco skyline. Transamerica is a century-old insurer that was one of the top Long Term Care Insurance companies in the 90s before it exited the business in the early 2000s.
In 2010, Transamerica rolled out a new Long Term Care product called Transcare which is still sold in Florida, while most states are now "Transcare II" states.
Transamerica offers several innovative Long Term Care policy features, including automatic 0-day home health care and cash indemnity options with its policies.
Long Term Care Insurance Companies Of Yesteryear
One of the immutable laws of marketing and business is that any market ends up being dominated by just a handful of companies. There were, at one time or another, about 50 Long Term Care Insurance companies in the market. Carriers big and small tried to model Long Term Care Insurance after disability policies only to find the actuarial data a tough nut to crack.
Famous mistakes include lower than expected lapse ratios which led to rate increases and persistently low interest rates from the 2008 recession on. The herd has thinned and several recent market exits have led to headlines declaring the death of Long Term Care Insurance as a viable product. The reality is that there is continued demand for Long Term Care Insurance and the top Long Term Care Insurance companies will continue to thrive. The coverage may cost more, but at current pricing is still a bargain compared to the risk of self insuring.
Are Existing LTC Policies Honored?
While a company exiting the business may be worrisome to policyholders, they need not worry about claims payments. A company exiting the business is still 100% committed to its existing Long Term Care policyholders because they have a legal contract to honor the policies, which if Tax Qualified are required to beGuaranteed Renewable.
LTC3 was the last Prudential LTC policy sold, ending in March of 2012. The plan included favorable features like included restoration of benefits riders. Prudential will continue to market its more profitable group Long Term Care Insurance policies, which tend to offer less benefits for more premium, with the upshot of covering most employees at a given firm.
In the early to mid-2000s, MetLife was a price and market leader when it came to Long Term Care Insurance. As time went on, the commitment to marketing new business waned and in 2010, MetLife announced a formal exit from individual Long Term Care Insurance market. Some group policies are still being marketed by MetLife.
The largest insurance company in the world, aka the “State Farm of Europe,” Allianz sold individual Long Term Care policies with interesting and unique features up until 2009. Allianz has an excellent name and reputation, but suffered from lack of brand recognition among many consumers. Allianz left traditional LTC insurance to focus on annuity-based Long Term Care Insurance products.
Who Will Be the Top Long Term Care Insurance Providers of Tomorrow?
With players exiting the market, every media outlet scrambled to write the obituary of Long Term Care Insurance from 2009-2012. What is less attention-grabbing is the continued strengthening and success of the market winners. New York Life reported a sales increase of 17% in 2011 and is currently paying dividends on some older Long Term Care Insurance policies. Dividends come from profits, meaning LTC is a viable product for insurers if risk is properly managed and policy pricing is responsible.