The state of Iowa is going to be looking more closely at providers of Long Term Care Insurance, a recent article in the Des Moines Register says.  Now more than ever it is important to have strong carriers when getting long term care insurance quotes.  At LTCtree, we prefer to use the largest and most respected insurance companies.  When the object is peace of mind, why not go with a larger carrier for just a little bit more than an unheard of or newer Long Term Care Insurance provider? 

The risks are real, as this article describes:

Long-term care is a relatively new type of insurance product that has continued to evolve since its development. Many of the earlier products sold in the '70s and '80s were limited in scope to payment of benefits for nursing-home care only and did not contemplate the changes in senior living that have expanded to various forms of assisted living.

Consumers did not always understand the plans, and carriers did not always make changes or provide additional benefits to reflect the changing landscape in long-term care. Early policies were not appropriately priced to meet the ever-increasing costs of health care. All of these factors contributed to dozens of consumer complaints being filed with the division by some policyholders in each of several recent years.

Through our review of complaints filed with our office in 2006 concerning long-term-care insurance, we noted a variety of different types of complaints, examples of which could be found in the Register's recent articles, including: large rate increases, slow payment of claims, poor customer service and denial of claims. Many of the complaints resulted from the actions of just a few carriers.

From the Dow Jones newswire today:

Some financial advisors who sold long-term care insurance to clients may have some explaining to do.

For the first time, Genworth Financial Inc. (GNW), the largest provider of individual long-term care insurance, or LTCI, has said it will raise premiums for existing customers. Genworth, which said previously that it projected premiums would remain static for life, filed in all 50 states last month for premium increases of 8% to 12% on most of its policies..

The reasons for rising rates at Genworth, and possibly other players, are tantamount.  One major factor is that long-term bond rates are historically low lately, and this is where insurance companies park a lot of the money they hold in reserve.  Ultra-conservative bond yields being low means rates may have to go up industry wide.  As agents, we remind our clients that rates can and may go up in the future, but Long-Term Care Insurance is still a necessary thing.

Genworth has applied to raise premiums for a majority of the policies it sold before 1997, when Genworth was a unit of General Electric Co. (GE). The company expects the increases to begin taking effect in October, though the process will likely take much longer in some states.

Genworth Financial's policies are a common choice for many advisors and their clients. The company's other business lines include life, disability and mortgage insurance, annuities and asset management.

According Buck Stinson , president of Genworth's long-term care division, the company's actuaries had historically overestimated "voluntary lapse rates," or the number of policyholders who would stop paying for coverage before ever claiming benefits.

Let's go ahead and assume that premiums will rise.  They almost have to.  One industry actuary, who would not comment publicly for a story mentioning news from a specific company, cautions that pricing methods still remain far from perfect.

Women, for example, claim benefits far more often and also far longer than men. "And yet we use unisex pricing," the actuary says, leaving insurers vulnerable to more premium increases in the future.

Newsday.com, a news outfit out of Long Island, New York, published today an article by Saul Friedman, a man who has been advocating for attention on the Long Term Care situation for 11 years.  Friedman is not alone.  More and more Americans are realizing that we have a looming LTC crisis and the only solution for many private citizens is to purchase long term care insurance.

In his story, Friedman is suspicious of LTC insurance in some ways because of recent allegations that Conseco, Banker's Life, and Penn Treaty have been denying claims.  These companies are under federal investigation and we highly suggest LTC shoppers stay away from them and make a "flight to quality" to the larger carriers like Genworth Long Term Care Insurance and John Hancock Long Term Care Insurance.

Friedman does give some good press to the new partnership programs in New York - though in some cases they may not be good for everyone.  We suggest you talk with one of our LTC specialists via the telephone to get started in the process of learning more about whether Long Term Care Insurance is right for you.