Blogs > Your Money

Dave Patterson and Erin Preston, a father-daughter team of Certified Financial Planner® licensees, provide thoughts and suggestions on a broad collection of personal finance topics.  Information provided in this BLOG is intended to be of a general nature and may not be appropriate for all situations.  Readers should consult with their own financial advisors before relying on any information contained herein.

Tuesday, February 15, 2011

More News on Long-Term Care Insurance

We just received an email from Bob Gertie, CEO of Advisor Insurance Resource (Advisor Insurance In his email, Bob discusses the fact that another long-term care insurance provider (Berkshire) is dropping out of the market at the end of 2011.

We have written in previous blogs that significant changes are taking place in the long-term care insurance industry. (See our blog titled: “Another Blow for Long-Term Care Insurance”, November 13, 2010). In that article we noted how MetLife was dropping out of the long-term care (LTC) insurance market and that John Hancock had recently increased prices of up to 40 percent on its policies.

Mr. Gertie noted that Berkshire has a very low market share in the industry and typically charged premiums that were often 30 percent higher than other insurers.

Mr. Gertie went on to say: “Berkshire’s decision solidifies my view that we will end up with only a few companies offering long-term care insurance in the future. He noted in his email that the largest providers of long-term care insurance were currently Genworth with 1,072,111 policies, John Hancock with 881,622 policies and Transamerica with 217,119 at the end of 2008.

He noted that it doesn’t make sense for companies with a low sales volume to stay in business due to the high expenses to meet new regulatory requirements, sales and marketing costs and new business underwriting costs.

The bottom line: if you decide to purchase a long-term care policy, make sure you buy it from one of the large providers. The smaller companies likely won’t be able to compete in the long run.


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