Once you've decided to buy long term care insurance, how do you know which company will still be around when you need to use the policy? Long Term Care insurance is in its infancy, as you said, and there is no track record to check. For example, Penn Treaty Network America has a good policy, but on the S&P ratings on the Internet I saw it rated D+. Other companies with less attractive policies had a C rating, but none had A or B. The Fool's advice columns on long term care these past few days neglected to show any financial ratings for the companies. Jesse
To Jesse and anyone else interested in insurance company ratings.Check out www.ambest.com. It's a rating service that has been around a long time and it's free online.Big Lon
LTC is in its infancy,TucsonJesse, compared to other types of insurance. If you purchase an individual policy through a company licensed in your state, you are protected by the state laws. Most states write their laws using the National Association of Insurance Commisioners (NAIC) model law as a guide. If the company bites the dust, then another company writing that type of business will pick up your policy. It is done usually on a rotational basis so you never know what company will pick it up, but the benefits in your contract are secure. Many states assess a premium tax that provides a fund for this purpose. Self funded programs do NOT come under the state laws and neither do group type plans purchased through some type of fraternal orginization. They generally issue a certificate of insurance and not a policy. The NAIC has a really good booklet available through your local Insurance Commisioners office on LTC. Be very careful of the salesmen; From what I've seen here in NV, many aren't telling their prospective clients if the plan is a tax qualified one or not. Some states have incentive programs for citizens to purchase LTC, so a call to your Insurance Commisioners office would be a good idea.
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