Long-term care insurance (LTCI) claims are often submitted after the insured person has paid premiums for 20 to 30 years. That finding is from a 2009 study from the Kaiser Commission on Medicaid and the Uninsured.
Consumers are understandably nervous about paying hundreds of thousands of dollars only to see their coverage lapse when their insurance carriers become insolvent or otherwise leave the LTCI market.
Insolvent Long-Term Care Insurance Carriers
In November 2008, Pennsylvania’s Insurance Commissioner Joel S. Ario was forced to rescue troubled LTCI policies that insurance company Conseco had sold at low-ball prices in the 1980s and 1990s. Just two months later, that same official had to take over the insolvent LTCI businesses of Penn Treaty America.
Prospective buyers of long-term care insurance must carefully evaluate the future ability of insurance companies to pay LTCI claims. An insurer’s financial strength rating is a key indicator to consider.
The following analysis presents A.M. Best ratings for 18 LTCI providers. Specializing in insurance, A.M Best is a well-respected rating agency that assesses the ability of insurers to pay policyholder claims.
Top Long-Term Care Insurance Companies
Listed in alphabetical order below are five LTCI companies with the highest among A.M. Best ratings.
- Berkshire Life Insurance Company ... A++ (superior rating)
- Mass Mutual ... A++
- New York Life Insurance Company ... A++
- Northwestern Mutual Life Insurance Company ... A++
- State Farm Insurance ... A++.
An A++ rating means superior, indicating a strong probability that future claims will be paid.
Other Long-Term Care Insurance Providers with Superior Ratings
The following four LTCI providers also have extremely strong financial ratings, just slightly behind the top-rated LTCI carriers above.
- John Hancock Life Insurance Company ... A+ (superior rating)
- MetLife ... A+
- Mutual of Omaha Insurance Company ... A+
- Prudential Insurance Company ... A+
In November 2010, MetLife announced that the company would stop selling LTCI policies in 2011. John Hancock has applied to increase premiums by an average 40%. If regulators approve, significantly higher rates will apply to new and existing policyholders of John Hancock long-term care insurance starting in 2011.
Long-Term Care Insurance Carriers with Excellent Financial Ratings
A.M. Best also rates the seven long-term care insurance carriers below as financially secure, but just two or three grades below the nine LTCI companies above.
- American General Life Insurance ... A (excellent rating)
- Genworth Life Insurance Company ... A
- Transamerica Life Insurance Company ... A
- AFLAC ... A-
- Assurity Life Assurance Company ... A-
- LifeSecure Insurance Company ... A-
- Unum ... A-
Both the A and A- ratings are excellent scores. Genworth previously sold long-term care coverage as General Electric Long-Term Care Insurance.
Financial Strength Ratings for Other Providers
While the following two insurers have lower scores than the 16 companies above, both LTCI providers enjoy the fifth highest rating available from A.M. Best.
- MedAmerica Insurance Company ... B++ (very good rating)
- Bankers Life and Casualty ... B++
A.M. Best assesses B++ to insurance companies with a strong ability to meet their financial obligations.
All 18 insurance companies listed in this analysis are well-positioned to pay LTCI claims.
Consumers should also investigate which of these companies have a history of raising LTCI premiums. For example, New York Life may not have jacked up rates while John Hancock has. This can be another critical factor in choosing long-term care insurance from a provider with a strong financial strength score.
Sources: This article provides independent calculations and insights based on data from Life and Health Insurance News as well as A.M. Best insurance ratings.
Daniel Workman - A senior business and finance writer who also does French translations, notably international trade and insurance materials.
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