Top LTC Insurance Carriers: Coverage, Pricing, and Strength Compared

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Top 10 LTC Insurance Carriers -- Hollowtree blog

Why Carrier Selection Matters for LTC Insurance

Long-term care insurance is a product purchased today that may not be used for 20, 30, or 40 years. This extraordinarily long time horizon makes carrier selection more important for LTC insurance than for virtually any other insurance purchase. The carrier you select must remain financially solvent, maintain competitive claims service, and honor policy provisions for decades.

The LTC insurance industry has experienced significant contraction over the past two decades. Carriers that underpriced policies in the 1990s and 2000s faced unsustainable claims experience, leading to massive premium increases for existing policyholders and market exits by major carriers including MetLife, Prudential, John Hancock (for new individual sales), and others.

The carriers that remain in the market today have generally learned from the industry's pricing mistakes and offer products designed with more conservative actuarial assumptions. However, the risk of future premium increases remains a concern that influences carrier selection.

Key Evaluation Criteria

When comparing LTC insurance carriers, several criteria should guide the evaluation.

Financial strength ratings from independent agencies (AM Best, S&P, Moody's, Fitch) indicate the carrier's ability to meet long-term financial obligations. For a product with a 30 to 40-year time horizon, minimum acceptable ratings are AM Best A- (Excellent) or S&P A- (Strong). Higher ratings provide additional security but are not guarantees.

Rate stability history indicates whether the carrier has imposed significant premium increases on existing policyholders. Carriers with a history of rate increases may offer lower initial premiums but could become expensive over time. Some states publish rate increase histories that consumers can review.

Product design flexibility determines whether the carrier offers the features you need, including benefit periods, elimination periods, inflation protection options, home care coverage, shared care riders, and other policy design elements.

Claims service reputation reflects how the carrier handles claims when policyholders need benefits. A carrier with excellent financial strength but poor claims service creates frustration and potential benefit delays during a vulnerable time.

Underwriting approach varies from carrier to carrier. Some carriers are more liberal in accepting applicants with health conditions, while others maintain stricter standards. An applicant's specific health profile may find a better home with one carrier than another.

The Current Carrier Landscape

The LTC insurance market has evolved into two segments: traditional standalone LTC carriers and hybrid Life/LTC product carriers. Some companies operate in both segments.

In the traditional standalone LTC market, the remaining active carriers include Mutual of Omaha, which has emerged as one of the market leaders in individual LTC sales. Their product offerings include traditional LTC policies with flexible benefit designs and competitive pricing. National Guardian Life (NGL) is another traditional carrier offering individual and employer-sponsored LTC products with comprehensive benefit options.

In the hybrid Life/LTC market, Lincoln Financial Group offers MoneyGuard, one of the most popular hybrid products. These policies combine permanent life insurance with LTC benefits and offer various funding options including single premium and multi-pay. OneAmerica (now part of Ameritas) has been a major player in the hybrid market with their Asset-Care product line. Nationwide offers hybrid products through their CareMatters line. Pacific Life offers hybrid products with competitive death benefit and LTC benefit ratios. Securian Financial offers hybrid products designed for the worksite and voluntary benefits market.

The hybrid market has grown significantly while the traditional market has contracted, reflecting consumer preference for products that guarantee a benefit regardless of whether care is needed (death benefit) or not (LTC benefit).

Financial Strength Comparison

Financial strength varies across LTC carriers and should be verified at the time of purchase, as ratings can change. As a general guide, carriers with the strongest financial ratings tend to be larger, diversified insurance companies where LTC is one of many product lines. This diversification provides financial stability because the carrier is not dependent on LTC profitability alone.

Carriers that specialize primarily in LTC insurance may offer excellent products but carry more concentrated risk. If claims experience is worse than expected, a specialized carrier has fewer sources of profit to absorb losses.

Independent rating agency reports for each carrier are available through AM Best's website, S&P Global Ratings, and Moody's. Reviewing the detailed rating report, not just the letter grade, provides insight into the carrier's specific financial position and the factors that could affect future stability.

Rate Stability Considerations

Rate stability is perhaps the most practical concern for LTC insurance buyers. A policy that starts with affordable premiums but increases 50% or 100% over 15 years may become unaffordable, forcing the policyholder to reduce benefits or drop coverage at the time they most need it.

Carriers that entered the market more recently (post-2010) generally have more conservative pricing based on updated actuarial assumptions about claims frequency, duration, lapse rates, and investment returns. These carriers have not yet imposed significant rate increases, but the short track record means future stability is not yet proven.

Carriers with longer track records may have imposed rate increases in the past. While past increases are concerning, a carrier that has already adjusted rates to sustainable levels may actually be less likely to need future increases than a carrier with untested pricing.

Some carriers offer rate stability features such as premium rate guarantee periods (3 to 5 years of guaranteed rates) or reduced paid-up benefit options that allow policyholders to stop paying premiums and retain a reduced paid-up benefit. These features provide some protection against future rate increases.

Working with an Independent Advisor

The complexity of comparing LTC carriers and products makes working with an independent insurance advisor essential. An independent advisor represents multiple carriers and can provide objective comparisons of products, pricing, and features.

Ask the advisor about their carrier appointment portfolio (how many LTC carriers they represent), their LTC-specific experience and credentials (such as the CLTC designation), their approach to carrier selection (what criteria they prioritize), their post-sale service model (will they help with claims decades from now), and references from clients who have filed LTC claims.

The right advisor adds value not just in carrier selection but in policy design, underwriting navigation, and long-term claim support. For help comparing DI quotes alongside your LTC evaluation, our team can guide you through both. LTC insurance is a decades-long relationship, and the advisor who helps you purchase coverage should be available to help navigate the claims process when benefits are needed.

The best carrier for any individual depends on their specific health profile, coverage needs, budget, and risk tolerance. There is no single best carrier for everyone, which is why the comparison process, guided by an experienced independent advisor, is essential for making an informed decision. Contact Hollowtree for a personalized carrier comparison based on your health profile and coverage goals.