Long-term-care insurance suddenly short on sellers

Advisers were left with one less long-term care insurer when Prudential Financial Inc. backed away from the individual LTCI business on Wednesday. Though the carrier will continue selling group LTCI coverage, its exit from the individual side of the business is the latest in a series of departures over the last 18 months. About a year ago, Guardian Life Insurance Co. of America said it would drop LTCI in order to focus on disability and life insurance. In late 2010, MetLife Inc. stepped away from the individual LTCI market, too. Carriers that have stayed in the business have raised premiums on in-force business and increased the costs of new policies. “This is reinforcing the story of partnering with carriers that are committed to the space, and it enforces the fact that this is a complicated business for insurers to price,” said Caleb Nitz, an investment marketing analyst at ValMark Securities Inc. Prudential will continue taking applications for new sales until March 30, according to spokeswoman Sheila Bridgeforth. Anything received after that date won't be processed. The industry has been squeezed by perpetually low interest rates, fewer people letting their coverage lapse and insured individuals living far beyond expectation. RELATED ITEM 10 best states for long-term care For advisers, the dwindling pool of insurers providing traditional LTCI has led them to turn toward hybrid products that combine life insurance and LTC coverage. “We have traditional LTCI contracts with five companies, and because of what we've seen in that market, most of the dollars are now going toward hybrids, like Lincoln [National Corp.'s] MoneyGuard Reserve,” Mr. Nitz said.