Long-Term Care: What Now?

By KELLY GREENE
WSJ

Shopping for long-term-care insurance? You should expect higher costs and a tougher approval process as a growing number of household-name insurers quit selling the policies.

Prudential Financial said Wednesday it plans to stop taking applications as of March 30 for individual long-term-care policies, which help pay for nursing-home, assisted-living and home care. That will make it the 10th of the top 20 insurers by sales to announce that it is leaving that market in the past five years, according to Limra International, a research firm.

Others include MetLife, which in 2010 said it was halting coverage, and Unum Group, which said last month it would stop selling the coverage through employers.

Prudential Vice President Malcolm Cheung says the company decided to stop selling long-term-care coverage to individuals because of the uncertainty surrounding future claims and persistently low interest rates. The insurer plans to continue offering group long-term-care coverage through employers.

People typically buy long-term-care coverage in their 50s or early 60s and often pay premiums for 20 or 30 years before making a claim. Insurers build reserves for paying those claims through investment income, mainly from high-quality bonds.

(More here.)