Prudential Financial Cutting Back On Long-Term Care Insurance

Prudential Financial Inc. is not cutting back on sales of long-term care insurance because it is hard to turn a profit with such low interest rates. Prudential will stop taking applications sold to individuals as of March 30, but it will still sell the coverage through employer-sponsored benefit programs. Prudential will still honor existing policies as long as premiums are paid on time.

As long-term care coverage has become more popular, it has been a difficult balance for insurers to maintain. Policyholders are living longer and generating more in claims than the insurers originally planned for. Unfortunately, Prudential is just one of many insurers who are also having to cut back on long-term care insurance. Thought the market is shrinking, there are still about ten major insurers who are selling to individuals, and a number of large ones who continue to sell coverage to employer programs.

See Leslie Scism, Prudential, Following Rivals, Pares Long-Term-Care Offerings, Wall Street Journal, Mar. 7, 2012.

Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.)) for bringing this article to my attention.