June 21, 2024

Worst Long-term Care Insurance Companies

Worst Long-term Care Insurance Companies

Aging and the need for care are realities many of us would rather not dwell on, yet statistics indicate its inevitability. Approximately 69% of individuals over the age of 65 will, at some point, require long-term care. However, the number of companies offering traditional long-term care insurance is dwindling, with some opting out of the market altogether. So, if you’re considering long-term care insurance, which five companies should you avoid?

  1. Understanding the Significance of Long-Term Care:

As we age, the likelihood of needing assistance with daily activities becomes increasingly probable. In such cases, long-term care insurance serves as a financial safeguard, providing coverage for services ranging from skilled nursing care to assistance with basic tasks.

  1. The Decline of Long-Term Care Insurance Providers:

Over the years, the landscape of long-term care insurance has shifted, with only nine companies now offering traditional policies. This decline is attributed to various factors, including rising costs, increased life expectancy, and the complexities of underwriting.

  1. Pitfalls of Choosing the Wrong Provider:

Not all long-term care insurance companies are created equal. Some have faced financial instability, leading to challenges in fulfilling policyholder obligations. It’s crucial to research each provider thoroughly to avoid potential pitfalls down the road.

  1. Five Companies to Approach with Caution:

Among the dwindling pool of long-term care insurance providers, there are five companies that warrant careful consideration due to their track records and financial stability—or lack thereof.

  1. Planning for Long-Term Care Needs:

Regardless of the uncertainties surrounding long-term care insurance, it’s essential to have a plan in place for future care needs. Whether through insurance, personal savings, or alternative arrangements, proactive planning can alleviate financial burdens and ensure access to quality care.

Navigating the landscape of long-term care insurance requires careful consideration and due diligence. By understanding the significance of long-term care, recognizing the challenges within the industry, and researching potential providers, individuals can make informed decisions to safeguard their future well-being.

Mass Mutual: Too expensive

In a recent development, MassMutual has announced the discontinuation of its long-term care insurance offerings, citing concerns over affordability. This decision, effective January 28th, 2021, reflects the company’s acknowledgment of its inability to compete on pricing within the market. Here’s what you need to know:

  1. Costly Coverage:

MassMutual’s long-term care insurance policies have long been criticized for their high costs, making them uncompetitive compared to other providers. This pricing disparity has rendered the company’s offerings less attractive to consumers seeking affordable coverage options.

  1. End of an Era:

With the cessation of long-term care insurance sales, MassMutual marks the end of an era in its insurance offerings. While existing policyholders will continue to be serviced, the company’s decision signals a strategic shift away from this particular segment of the market.

  1. Impact on Consumers:

For individuals considering long-term care insurance, MassMutual’s withdrawal from the market may limit their options and necessitate exploring alternatives. While existing policyholders are assured continued coverage, prospective buyers will need to look elsewhere for more cost-effective solutions.

  1. Evaluating Alternatives:

In light of MassMutual’s exit from the long-term care insurance arena, consumers are advised to evaluate alternative providers carefully. Comparing pricing, coverage options, and financial stability will be paramount in ensuring adequate protection against future long-term care needs.

  1. Honoring Existing Policies:

Despite discontinuing sales, MassMutual remains committed to honoring existing long-term care insurance policies. Policyholders can rest assured that their coverage will remain intact, with the company fulfilling its obligations under the terms of the agreements.

MassMutual’s decision to discontinue long-term care insurance underscores the importance of affordability and competitiveness in the insurance landscape. As consumers navigate their options for long-term care coverage, thorough research and evaluation of alternative providers will be essential in securing adequate protection for the future.

Genworth Financial: Premiums increased by 150%, which resulted in a class action lawsuit

Once a dominant force in the long-term care insurance market, Genworth has undergone significant changes in its approach to policy sales. Amidst these shifts, the company recently found itself embroiled in a class action lawsuit concerning its long-term care insurance policies. Here’s the latest:

1. Evolution of Genworth’s Market Presence:

Formerly a major player in long-term care insurance, Genworth’s strategy has evolved, with a shift towards selling policies primarily through employers or direct-to-consumer channels. This change reflects broader trends in the insurance industry and the company’s adaptation to new market realities.

2. Class Action Lawsuit Settlement:

Genworth’s long-term care insurance policies became the subject of a class action lawsuit, which was recently settled for a substantial sum of $24.5 million. The lawsuit centered on the significant premium increases imposed on policyholders, leading to financial strain and policy lapses.

3. Allegations of Misrepresentation:

Central to the lawsuit were allegations that Genworth misled policyholders by promising stable premiums, only to enact drastic rate hikes of up to 150%. This discrepancy between assurances and actions resulted in hardship for many customers, forcing them to either absorb the increased costs or forfeit their coverage.

4. Implications for Policyholders:

For policyholders affected by Genworth’s premium increases, the settlement brings a measure of relief, albeit after enduring financial uncertainty and disruption. The resolution of the lawsuit provides some compensation for those impacted and underscores the importance of transparency and accountability in the insurance industry.

5. Moving Forward:

As Genworth navigates the aftermath of the class action lawsuit, attention turns to the company’s future practices and commitments to its policyholders. Transparency, fair pricing, and honoring contractual agreements will be essential as Genworth seeks to rebuild trust and confidence within the long-term care insurance market.

Genworth’s settlement of the class action lawsuit highlights the challenges and responsibilities inherent in providing long-term care insurance. As the company charts its course forward, prioritizing customer trust and satisfaction will be paramount in maintaining its standing within the industry.

New York Life: Very expensive and lots of complaints

While endorsed by the AARP, New York Life’s long-term care insurance policies have come under scrutiny for various reasons, including affordability and coverage limitations. Here’s a closer look at the concerns surrounding their offerings:

1. AARP Endorsement vs. Policy Performance:

Despite being endorsed by the AARP, New York Life’s long-term care insurance policies have failed to meet expectations for many consumers. The endorsement does not necessarily guarantee a superior product, as evidenced by the challenges faced by policyholders.

2. Costly Coverage:

New York Life’s long-term care insurance stands out as one of the most expensive options in the market, often surpassing competitors’ rates by a significant margin. The steep premiums can pose a financial burden for policyholders, making it less accessible to those seeking affordable coverage.

3. Limited Benefits for Health-Challenged Applicants:

One of the key drawbacks of New York Life’s long-term care insurance is the disparity in benefits for applicants who do not qualify for the top-tier classification due to health reasons. Such individuals may find themselves eligible for only a portion of the benefits offered, further complicating their access to comprehensive coverage.

4. Consumer Complaints and Concerns:

Consumer Affairs platforms have seen a surge in complaints about New York Life, encompassing various aspects of their services, including long-term care insurance. These grievances highlight issues ranging from claim processing delays to dissatisfaction with coverage terms, reflecting broader dissatisfaction among policyholders.

5. Evaluating Alternatives:

Given the concerns surrounding New York Life’s long-term care insurance, consumers are advised to explore alternative providers to ensure they secure adequate and affordable coverage. Comparing quotes, assessing coverage options, and researching customer feedback can help individuals make informed decisions about their long-term care insurance needs. As consumers weigh their options for long-term care insurance, it’s essential to consider not only the reputation of the provider but also the affordability and comprehensiveness of the coverage offered. New York Life’s endorsement by the AARP may carry weight, but ultimately, policy performance and customer satisfaction should guide decision-making in selecting the most suitable insurance provider.

AARP Long-Term Care Insurance: The same as New York Life long-term care insurance

Trusted by Seniors:

AARP holds a revered status among seniors, offering a wealth of resources tailored to guide them through retirement. With specific benefits and a wealth of useful content, AARP serves as a trusted ally for seniors navigating life’s transitions.

Vibrant Community:

Beyond mere information, AARP fosters a vibrant community where seniors can connect, share experiences, and learn from one another. This network serves as a valuable support system, enriching the lives of its members.

Partnership with New York Life:

In collaboration with New York Life, AARP extends its services to include long-term care insurance. However, it’s essential to understand that this product is essentially a rebranded version of New York Life’s offering.

Cautionary Note:

While AARP’s name carries weight and trust, it’s crucial to approach their long-term care insurance with caution. Despite the association with AARP, the product’s resemblance to New York Life’s insurance warrants careful consideration, as both may have their limitations and drawbacks.

As you explore options for long-term care insurance, it’s vital to weigh the benefits and drawbacks carefully. While AARP’s endorsement may offer reassurance, it’s prudent to conduct thorough research and consider all aspects of the insurance product before making a decision.

CalPERS: Massive premium increases which resulted in class action lawsuit

Suspension of Open Enrollment:

CalPERS has taken the unprecedented step of suspending open enrollment in its long-term care program. While there’s uncertainty about its future availability, recent developments shed light on significant challenges within the program.

Rate Hikes and Reduced Benefits:

The decision to suspend open enrollment comes amidst ongoing controversies surrounding rate hikes and reduced benefits in CalPERS’ long-term care insurance. Just days ago, the board approved a staggering 77% rate increase for current LTC customers, compounding the financial strain on policyholders.

History of Rate Increases:

This latest increase follows previous hikes of 85% in both 2015 and 2016, which triggered a class action lawsuit against CalPERS. The lawsuit alleges that these substantial increases, coupled with reduced benefits, have caused undue hardship for policyholders.

Legal Challenges:

CalPERS finds itself embroiled in a class action lawsuit due to its handling of long-term care insurance. The lawsuit highlights the impact of exorbitant rate hikes and diminished benefits on policyholders, underscoring broader concerns about the program’s sustainability and fairness.

Looking Ahead:

As CalPERS grapples with legal challenges and public scrutiny, the future of its long-term care insurance program remains uncertain. Policyholders are left navigating a landscape fraught with financial uncertainty, prompting calls for transparency and accountability from the organization.

The suspension of open enrollment and the approval of significant rate increases underscore the challenges facing CalPERS’ long-term care insurance program. As policyholders await further developments, questions linger about the program’s viability and its ability to meet the needs of those it serves.

The 3 Best Traditional Long-Term Care Insurance Companies

Are you in search of reputable companies offering quality traditional long-term care insurance? Look no further! Here are three standout options:

Mutual of Omaha: Flexible Coverage

If flexibility is what you seek in a long-term care insurance policy, Mutual of Omaha is a top contender. With customizable options to suit your needs, they provide peace of mind and security for your future care.

Transamerica: Competitive Rates and Guarantees

For the best rates and guaranteed benefits, Transamerica stands out among the competition. Their long-term care insurance policies offer affordability without sacrificing quality, ensuring you get the coverage you need at a price you can afford.

National Guardian Life: Ideal for Couples

Couples looking for comprehensive coverage tailored to their unique needs should consider National Guardian Life. With specialized plans designed to accommodate joint policies, they offer security and peace of mind for both partners.

Comprehensive Analysis:

For a deeper dive into these companies and their traditional long-term care insurance products, check out our comprehensive analysis. Learn more about their offerings, including quotes and policy details, in our roundup of the three best traditional long-term care insurance providers.

With these top-rated companies, you can find the perfect long-term care insurance solution to protect your future and provide financial security for yourself and your loved ones.

The 5 Best Hybrid Long-Term Care Insurance Companies

  • In your quest for long-term care insurance, don’t overlook hybrid policies, also known as linked policies. Here are our top recommendations for the best hybrid long-term care insurance companies:
  • OneAmerica Asset Care: Ideal for Couples
  • For couples seeking comprehensive coverage, OneAmerica Asset Care is a standout choice. Their hybrid policy offers tailored solutions to meet the unique needs of joint policyholders, providing peace of mind for both individuals.
  • Nationwide CareMatters: Optimal for Cash Indemnity Policy
  • If a cash indemnity policy is what you’re after, Nationwide CareMatters delivers. Their hybrid long-term care insurance offers flexibility and financial security, ensuring you have the funds you need when you need them most.
  • Securian SecureCare: Value-Packed Coverage
  • When it comes to value, Securian SecureCare leads the pack. Their hybrid policy combines affordability with comprehensive coverage, giving you peace of mind without breaking the bank.
  • Lincoln Financial MoneyGuard: Elimination Period-Free
  • For those who prefer to skip the elimination period, Lincoln Financial MoneyGuard is the answer. Their hybrid long-term care insurance offers immediate coverage without the waiting period, ensuring you’re protected from day one.
  • Pacific Life Premier Care Choice: Flexible Options
  • Flexibility is key with Pacific Life Premier Care Choice. Their hybrid policy allows you to tailor coverage to your specific needs, ensuring you have the flexibility to adapt as your circumstances change.
  • Consider these top hybrid long-term care insurance companies as viable alternatives to traditional policies. With their unique features and benefits, they offer a comprehensive solution to safeguard your future and provide financial security for years to come.
  • Life Insurance Policies with Long-Term Care Rider

Exploring Alternatives: Permanent Life Insurance with Long-Term Care Rider

When considering long-term care insurance, another viable option is to opt for a permanent life insurance policy with a long-term care rider. This alternative, similar to hybrid policies, offers additional benefits and features. Here’s a closer look at the best life insurance policies with long-term care riders and how they work:

Best Life Insurance Policies with Long-Term Care Rider:

1. Understanding the Concept:

Before delving into specifics, it’s essential to grasp the concept of permanent life insurance with a long-term care rider. This hybrid approach combines the benefits of life insurance with long-term care coverage, providing policyholders with added flexibility and security.

2. Additional Life Insurance Benefits:

Unlike standalone long-term care insurance or hybrid policies, permanent life insurance with a long-term care rider offers enhanced life insurance benefits. This includes death benefits for beneficiaries, ensuring financial protection for loved ones in the event of the policyholder’s passing.

3. Long-Term Care Coverage:

In addition to life insurance benefits, these policies include a long-term care rider, which provides coverage for qualified long-term care expenses. This can include nursing home care, assisted living facilities, and in-home care services, offering comprehensive protection for policyholders in their later years.

4. How It Works:

Policyholders pay premiums towards their permanent life insurance policy, which accumulates cash value over time. In the event of a long-term care need, the policy’s rider can be activated, allowing the policyholder to access a portion of the death benefit to cover qualified expenses associated with long-term care.

5. Benefits of Permanent Life Insurance with Long-Term Care Rider:

This hybrid approach offers several benefits, including greater flexibility, enhanced life insurance coverage, and the ability to access funds for long-term care needs without depleting personal savings or retirement funds.

These advantages, permanent life insurance with a long-term care rider presents a compelling alternative for individuals seeking comprehensive protection against both life and long-term care expenses.

8 Alternatives to Traditional Long-Term Care Insurance

It’s highly probable that as you age, you’ll require some level of long-term care. In fact, over 70% of individuals aged 65 and older in the US will eventually need long-term care services. With healthcare expenses on the rise, the costs associated with long-term care also escalate substantially. Failing to adequately plan for these expenses can potentially lead to financial hardship during retirement, even bankruptcy.

Traditional long-term care insurance has become increasingly costly and unpredictable. Many insurance companies have raised premiums on these policies so frequently and significantly that they’ve become targets of multiple class action lawsuits nationwide. Consequently, this trend has led to numerous companies exiting the long-term care insurance market, leaving only a few providers struggling to meet the demand.

The positive news is that traditional long-term care insurance isn’t the sole remedy for this costly issue. There are eight alternative solutions worth considering:

  • Hybrid Linked Life Insurance and Long-Term Care Insurance Policies: These policies combine life insurance with long-term care coverage, offering flexibility and benefits.
  • Life Insurance with Chronic Illness Rider or Long-Term Care Rider: Certain life insurance policies come with riders that provide coverage for chronic illness or long-term care needs, offering added financial security.
  • Medicaid: For those who qualify, Medicaid can provide coverage for long-term care services, although eligibility requirements vary by state.
  • Annuities: Some annuity products offer long-term care benefits, providing a source of income to cover care expenses in the future.
  • Reverse Mortgage: Homeowners aged 62 and older can consider a reverse mortgage, which allows them to convert part of their home equity into cash to fund long-term care expenses.
  • HSA Account: Health Savings Accounts (HSAs) can be used to save for future healthcare expenses, including long-term care costs, with tax advantages.
  • Self-Funding: Individuals can choose to self-fund their long-term care expenses by saving and investing money over time, though this option requires careful financial planning and sufficient resources.
  • These alternatives offer diverse strategies for addressing the financial challenges of long-term care, allowing individuals to tailor their approach based on their unique circumstances and preferences.

What is Long-Term Care Insurance?

Long-term care insurance covers expenses related to assisted living, nursing home stays, in-home care, and adult day care services when you meet the qualifications for long-term care. You qualify for long-term care when you require assistance with at least two out of six activities of daily living (ADLs), which include bathing, toileting, eating, mobility, grooming, and dressing.

Private health insurance, Medicare, and disability insurance typically do not cover long-term care expenses. While these insurance options may provide coverage for certain medical expenses, they generally do not extend to long-term care services such as assisted living, nursing home stays, or in-home care.

As for traditional long-term care insurance, it comes with its own set of strengths and weaknesses that individuals should be aware of. While it can provide valuable coverage for long-term care expenses, it often comes with high premiums and the potential for premium increases over time. Additionally, coverage may be subject to certain limitations and exclusions, and policyholders must meet specific criteria to qualify for benefits. Therefore, it’s essential for individuals to carefully weigh the pros and cons of traditional long-term care insurance before making a decision.

What is Hybrid Long-Term Care Insurance?

One drawback of traditional long-term care insurance is that if you pay into the policy but never end up needing long-term care, you receive no benefits in return. To mitigate this risk, hybrid long-term care insurance was developed. This type of policy combines elements of a permanent life insurance policy with a long-term care insurance policy, providing coverage for both scenarios.

If you hold a hybrid long-term care insurance policy and ultimately do not require its benefits, you have options. You can either receive a refund of your premiums or your family will be entitled to a tax-free death benefit, similar to what you’d get from a permanent life insurance policy. Beyond these advantages, hybrid policies offer several other benefits. However, it’s crucial to recognize that they also come with limitations. Delve deeper into the pros and cons of hybrid long-term care insurance to make an informed decision.

Hybrid long-term care insurance has experienced a surge in popularity in recent years.

How Much does Long-Term Care Insurance Cost?

Long-term care insurance, like long-term care itself, comes at a significant cost. However, purchasing a policy at a younger age typically results in lower premiums. The optimal age to buy long-term care insurance is generally considered to be in your early 50s or late 40s. Additionally, your health status is a crucial factor influencing the cost of premiums for long-term care insurance.

Below are the annual premiums for long-term care insurance in various scenarios, assuming good health and payment of premiums for 10 years. The quotes for traditional long-term insurance are sourced from National Guardian Life, a leading provider in this market:

  • Single Individual, Age 50:
  • Annual Premium: $2,000
  • Single Individual, Age 60:
  • Annual Premium: $3,500
  • Couple, Both Age 55:
  • Combined Annual Premium: $4,500
  • Couple, Both Age 65:
  • Combined Annual Premium: $7,000

Please note that these premiums are indicative and may vary based on individual circumstances, coverage options, and underwriting criteria. For a comprehensive review of National Guardian Life’s long-term care insurance offerings, refer to the full review.

For hybrid long-term care insurance quotes, we obtained them from Securian Life Insurance company, featuring its SecureCare hybrid long-term care product. Here are the estimated annual premiums for various age groups and coverage levels:

  • Age 50:
  • Annual Premium Range: $11,600 – $12,900
  • Total LTC Benefit: $216,000 for 3 years
  • Age 55:
  • Annual Premium Range: $13,300 – $14,900
  • Total LTC Benefit: $216,000 for 3 years
  • Age 60:
  • Annual Premium Range: $15,000 – $17,100
  • Total LTC Benefit: $216,000 for 3 years
  • Age 65:
  • Annual Premium Range: $17,000 – $19,400
  • Total LTC Benefit: $216,000 for 3 years

In the event that you no longer require LTC insurance, you have the option to either receive a full refund of your premiums or leave a tax-free death benefit of $216,000 to your beneficiaries upon your passing. For further details, refer to the full review of Securian Life Insurance Company’s SecureCare hybrid long-term care product.

Is Long-Term Care Insurance Worth It?

Indeed, statistics show that approximately 70% of individuals aged 65 or older will require some form of long-term care in their lifetime. With the continually rising costs associated with long-term care, there is a growing argument for mandatory long-term care insurance coverage.

Comparatively, the likelihood of needing long-term care surpasses the probability of being involved in a car accident, for which carrying insurance is mandatory when driving. Therefore, proponents of mandatory long-term care insurance contend that it offers a prudent and necessary financial safeguard against the potentially crippling expenses of long-term care.

If you anticipate being unable to cover long-term care expenses out of pocket, long-term care insurance is advisable. The next consideration is whether to opt for a traditional or hybrid policy. The decision ultimately hinges on your financial circumstances and preferences.

In general, if affordability isn’t a concern, a hybrid long-term care insurance policy offers numerous advantages with minimal drawbacks. However, if a hybrid policy is financially out of reach, a traditional policy can still provide valuable coverage.

When selecting a traditional long-term care insurance policy, it’s crucial to choose a reputable company, given the industry’s mixed reputation. Here are our top three recommendations:

  • Mutual of Omaha: Known for flexibility and reliability in coverage.
  • Transamerica: Offers competitive rates and guaranteed benefits.
  • National Guardian Life: Ideal for couples and known for quality coverage.

By carefully considering your needs and assessing available options, you can make an informed decision about which type of long-term care insurance policy and provider best suit your circumstances.

Absolutely, comparing long-term care insurance quotes from multiple reputable companies is essential before making a final decision. By obtaining quotes from 3-5 top-rated companies, you can ensure that you are getting the best possible coverage at the most competitive rates. This allows you to weigh the benefits, premiums, and terms offered by each provider, enabling you to make an informed and cost-effective decision regarding your long-term care insurance policy.

Who Needs Long-Term Care Insurance?

The statistics are indeed stark: 7 out of 10 individuals aged 65 or older will require long-term care at some point in their lives. Given this high likelihood, long-term care insurance becomes a crucial consideration for those who lack the financial means to cover these expenses out of pocket.

Unlike car accidents, which have a lower probability for any individual, the need for long-term care affects a significant portion of the population as they age. Therefore, some argue that long-term care insurance should be mandated, similar to car insurance requirements for drivers.

The rationale behind this argument is that the financial implications of long-term care can be substantial and could potentially burden individuals, families, and the healthcare system as a whole. By mandating long-term care insurance, policymakers could ensure that individuals are adequately prepared for the potential costs associated with long-term care, thus mitigating the risk of financial hardship in later years.

Ensuring a fulfilling and secure retirement often involves planning for potential long-term care needs. In this regard, having a robust long-term care insurance policy is highly advisable. By securing adequate coverage, you can safeguard your financial well-being and enjoy your golden years with peace of mind, knowing that you have protection in place for any potential long-term care expenses that may arise.

When Should You Buy Long-Term Care Insurance?

Indeed, similar to life insurance, purchasing long-term care insurance at a younger age typically results in more affordable premiums. While many individuals opt to buy long-term care insurance in their late 50s or early 60s, starting the process in one’s late 40s or early 50s can offer significant cost savings.

By initiating the search for long-term care insurance at a younger age, individuals have the opportunity to lock in lower premiums and secure coverage while they are still in good health. Additionally, choosing a payment plan that allows for premiums to be spread out over time, such as paying over a 10-year period, can help ensure affordability, particularly for those who are still actively working and earning income.

Ultimately, starting the process of obtaining long-term care insurance at a younger age enables individuals to access more favorable pricing and options, providing valuable financial protection for the future.

Indeed, several insurance companies offer the option to purchase long-term care insurance policies as early as 40 years old. Given that the likelihood of needing long-term care after the age of 65 is estimated at 70%, it’s prudent to consider buying coverage as early as possible.

By obtaining long-term care insurance at a younger age, individuals can secure coverage while they are still in good health, potentially locking in lower premiums. This proactive approach allows for better financial planning and ensures that individuals are prepared for any potential long-term care needs that may arise later in life. Therefore, considering long-term care insurance options as early as feasible is advisable to maximize coverage and affordability.

Last Thoughts

The long-term care insurance market has indeed faced significant challenges since its inception. Initially, insurance companies underestimated the true costs of long-term care and the number of policyholders who would allow their policies to lapse. These miscalculations ultimately resulted in a crisis within the long-term care market, leading many companies to cease offering this type of insurance altogether.

However, for those who qualify, long-term care insurance remains a consideration worth exploring. In recent years, rates have stabilized to some extent, offering a more balanced outlook for prospective policyholders. While the market may still be complex to navigate, individuals who meet the criteria for coverage may find value in securing long-term care insurance to protect against the potentially significant costs associated with long-term care needs.


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