In America, the insurance sector is booming. The insurance industry in America makes a staggering $1,000,000,000,000 annually from premiums, according to the American Association for Justice.
However, there are bad eggs amongst them. There are some insurance companies you should out rightly avoid. They have been branded as the worst long-term care insurance companies.
If you’ve been in a car accident and are fighting with one of these insurance companies, you need to know that they are not on your side.
They use proven tactics to get you to settle for a tiny fraction of what you really need in order to recover financially from your injuries.
In this article, you will learn about the 10 worst long-term care insurance companies and the reasons you should avoid them. Keep reading.
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What is Long-Term Care Insurance?
Long-term care insurance is an insurance product, sold in the United States, the United Kingdom, and Canada that helps pay for the costs associated with long-term care.
Basically, long-term care insurance covers care generally not covered by health insurance, Medicare, or Medicaid.
Long-term care insurance will pay for your long-term care expenses such as assisted living, nursing home stays, in-home care, and adult daycare services when you are qualified for long-term care.
You are qualified for long-term care when you need help for 2 out of 6 activities of daily living (or ADLs) such as bathing, toileting, eating, getting around, grooming, and dressing.
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How Much Does Long-term Care Insurance Cost?
Long-term care is expensive, and so is long-term care insurance. The younger you buy a long-term care insurance policy, the cheaper you can get.
The best age to buy a long-term care insurance policy is in your early 50s or late 40s. And of course, your health condition plays a big role in the premiums of your long-term care policy.
A traditional long-term insurance policy with a total of $216,000 LTC benefit for 3 years can cost a 50-year old $2,000 to $3,000 a year; a 55-year old $2,200 – $3,400; a 60-year old $2,500 – $3,900 a year; and a 65-year old $13,500 – $14,700 a year.
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What is Covered Under Long-term Care Insurance Companies?
Every insurance company has its own share of what it covers in its long-term care. They typically allow you to use your daily benefit in a variety of settings, including:
- Your home
- Adult day service centers
- Hospice care
- Respite care
- Assisted living facilities (also called residential care facilities or alternate care facilities)
- Alzheimer’s special care facilities
- Nursing homes
In the home setting, comprehensive policies generally cover these services:
- Skilled nursing care
- Occupational, speech, physical, and rehabilitation therapy
- Help with personal care, such as bathing and dressing
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10 Worst Long Term Care Insurance Companies
#1. MassMutual
MassMutual is one of about ten insurance companies still offering traditional long-term care insurance policies. These policies are harder to come by because decreasing profits caused many companies to leave the market.
MassMutual also offers two hybrid long-term care insurance policies, CareChoice One and CareChoice Select, which are both whole life insurance policies with long-term care riders.
Mass Mutual was never competitive as far as pricing for its long-term care insurance. It’s probably a good thing that as of January 28th, 2021 they will no longer offer long-term care insurance. If you already have a policy through Mass Mutual, they will continue to honor those.
#2. Genworth Financial
This is one of the worst long-term care insurance companies. Its premiums increased by 150%, which resulted in a class-action lawsuit. Genworth used to be a major player in the long-term care insurance market. Now they only sell policies through employers or direct-to-consumer channels.
Genworth’s long-term care insurance was the subject of a class-action lawsuit, which was recently settled for $24.5 million. The suit was based on the astronomical increases in premiums that customers were either forced to pay or to stop paying and let their policy lapse.
These people were told their premiums would not increase, and then Genworth increased rates by as much as 150%.
#3. New York Life
New York Life is endorsed by the AARP, but that doesn’t mean they offer a great long-term care policy. It’s also one of the most expensive long-term care insurance, sometimes by almost twice the amount of other companies offering long-term care insurance.
Also, if you don’t qualify for the top tier classification because of health, you will only be eligible for some benefits, not all. There are many complaints about New York Life in general on Consumer Affairs, including their long-term care insurance.
#4. AARP Long-Term Care Insurance
AARP is a trusted name among the senior population. They offer a lot of useful content to guide the senior consumers into their retirement and specific benefits for the seniors.
They also create a vibrant community of seniors to stay in touch and learn from one another.
AARP partners with New York Life to provide long-term care insurance.
It is exactly the same New York Life’s long-term care insurance product, now just cobranded with AARP. If you trust the AARP name, be careful with the AARP long-term care insurance product since it is as bad as New York Life’s long-term care insurance and is one of the long-term care insurance companies.
#5. CalPERS
Technically, CalPERS has “suspended open enrollment” in the long-term care program. Just in case they get back to it (which is unlikely) you should know that they are also the subject of a class-action lawsuit due to rate hikes and reduced benefits. Just days ago, they approved a 77% rate increase for current LTC customers.
This is on top of the 85% increases they instituted in both 2015 and 2016, which led to the class-action lawsuit in the first place
#6. Unum
This is one of the nation’s most prominent disability insurers and it has established a poor reputation with its insurers.
They are renowned for delaying and denying claims set forth to them. The CEO, Thomas Watjen, made $7,300,000 in 2007.
The media frequently investigates this company for their continual claim abuse, earning them the number two spot.
#7. AIG
Ranked #3, the AIG is one of the worst long-term care insurance companies. Even with his dismissal, former CEO Martin Sullivan is still expected to earn $68,000,000.
AIG is the largest insurance company in the world, and somehow they have gotten away with mistreating their clients for years.
There have been allegations that the executives of this company strategically try to increase prices when there is a catastrophe.
#8. State Farm
This company has committed some truly deplorable acts to avoid paying its clients. After Hurricane Katrina, they altered engineering reports about damage from the storm, and they have also forged signatures on earthquake waivers after significant earthquakes.
State Farm is the largest property-casualty insurance company in the country. Like most insurance companies, they will go to extreme lengths to delay and deny claims. All this while paying their CEO Edward Rust Jr. $11,700,000 in 2007.
#9. Conseco.
It is truly disturbing to learn of Conseco’s tactics. They mainly serve the elderly with long-term care policies, and they know that delaying is key to not having to pay out money.
AAJ reported that “unfortunately, Conseco uses the deteriorating health of its policyholders to its advantage because the company knows if it waits long enough to pay out claims, its customers will die.”
Their CEO, C. James Prieur got $2,600,000 for his role in 2007. It is one of the worst long-term care insurance companies.
#10. Torchmark
A Southern company for more than 100 years, Torchmark has some very distasteful practices. For one, they have been under scrutiny for charging higher premiums for their minority customers than they charge their Caucasian customers.
They also use many subsidiary companies boasting case-specific insurance such as cancer insurance that is met with the same lack of customer care as the mother company. It is one of the worst long-term care insurance companies.
#10. Liberty Mutual
While it may not be as good at denying and delaying claims as State Farm and Allstate, Liberty Mutual sought the help of the same consulting firm that the other two companies did to reduce costs.
CEO Edmund Kelly made $27,000,000 in 2005—it doesn’t seem that they are having problems keeping money in the company. They have used the tactic of abandoning and refusing renewal to clients in high-risk areas such as those susceptible to hurricanes or floods.
Frequently Asked Questions
Long-term care (LTC) policies are typically sold for 12 or more months of care. You can buy a policy that pays benefits for only 1 year or one that pays for 2, 3, or 5 years. Companies have stopped selling benefits for as long as you live.
The most expensive market for long-term care is in the Bridgeport-Stamford-Norwalk area of Connecticut. The average cost of a room in a nursing home there has reached $159,359 for just one year. Anchorage, Alaska comes in at the second spot on the list, with an average annual nursing home cost of $156,950.
The daily benefit amount. The amount of inflation protection. The length of benefit payment. The waiting period before benefits begin. Your current age.
A long-term care annuity is a deferred fixed annuity (hybrid annuity) designed to help pay long-term care costs without destroying retirement savings.
Essentially, the long-term care would be provided in three different stages- skilled nursing assisted living and independent living.
California tops the list of the best insurance companies to go to for long-term care.
Conclusion
These companies are by no means lacking the funds necessary to properly compensate their customers.
AIG tops the list with $6,200,000,000 in profits in 2007. Only three of these companies made below a billion dollars—that means 70% of the worst insurance companies made over a billion dollars yet they did everything they could to keep that money away from their clients.
These 10 worst long-term care insurance companies are to be completely avoided.
References
- https://www.consumerreports.org/cro/2012/08/long-term-care-insurance/index.htm
- https://www.decof.com/documents/the-ten-worst-insurance-companies.pdf
- https://www.demayolaw.com/files/top10worst.pdf
- https://www.marketwatch.com/picks/guides/insurance/top-5-best-long-term-care-insurance-providers/
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