History has proven that most insurance companies that enter the LTC Insurance market will not remain in the market for an extended period of time. Therefore, the majority of companies offering LTC insurance should be avoided. Narrow your choice to those companies who fit the following criteria:
1. Longevity in the LTC insurance industry
The longer a company has been in the LTC business, the more likely they are to remain in the business. As a general rule, it is best to select an insurance company that has been in the market for 15 years or longer.
2. Financial Ratings
A strong financial rating is vital to the future of your investment in the coverage. You should select a company with an A rating or higher by the A.M. Best financial rating service. Never choose an insurance company rated less than A.
3. Name Recognition of the Insurance Company
Recognizing the name of the insurance company is an indicator that the company will remain committed to the market. Insurance companies that have built name recognition and protected a brand name over a number of decades are more likely to continue protecting their reputation.
4. Approved as a "Partnership" Company
Companies that have been approved to offer Partnership policies have gone through a stringent approval process that indicates a major commitment to the LTC insurance industry.
5. Rate Increase History
LTC insurance premium rates can be increased on existing policies if an insurance carrier can justify the rate increase to your state's insurance department. Since policies are subject to rate increases, always ask about the rate increase history of the insurance carrier being recommended. Select one of the few carriers that have done a good job with underwriting and pricing, and have a reasonable premium rate increase record.
6. Reasonableness in Premium
Choosing a company that has a lower than average premium rate could spell disaster for your future LTC Insurance plan.This is one of the few industries in which shopping for the lowest price combined with the most generous benefits is not a wise strategy. Chances are, these carriers will raise rates substantially in future years. Obviously, it also wouldn't be wise to purchase coverage from an insurance carrier with substantially higher than average premiums.
7. Stringent Underwriting Process
If an insurance carrier has a conservative underwriting philosophy, it means the company's coverage is relatively difficult to obtain. Since you have maintained your good health, you should be rewarded by being insured in a "risk pool" of people who have also mantained their good health. A stringent underwriting process is your strongest indication that the insurance carrier will also be in a good position to pay your claim in the future and will also be less likely to substantially raise your rates along the way.
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