During the past 40 years, we as an industry have introduced many long-term care insurance (LTCi) products yet consumers still aren’t buying in significant numbers.
Our customers and our nation need a successful long-term care insurance industry. Consumers need protection from the financial devastation of end-of-life long-term care expenses. Our nation cannot afford to pay LTCi expenses for the increasing number of people turning 65.
Unfortunately, in the past decade a nearly perfect storm hit long-term care insurance. Persistency exceeded actuarial models resulting in a consistently growing liability to the insurance carriers. At the same time, a long-term low-interest-rate environment continually reduced returns on investments.
This perfect storm has resulted in several prominent long-term care insurance carriers leaving the marketplace. Others who remain have restructured and re-priced their long-term care policies. Neither of these results is good for the stakeholders involved -- not the consumer, not for the insurance industry, and certainly not for the American economy and society.