Prudential wants only group LTC policies
The company said it will continue to service existing individual long-term care policies and their terms. Coverage will remain in place for policyholders, assuming premiums are paid when due and benefits are not exhausted.
Rates will not change, unless regulatory changes allow that to happen.
“The decision to exit the individual long-term care business reflects the challenging economics of the individual market and our desire to focus our resources and capital on the group market, where we see the greatest opportunity,” said Malcolm Cheung, vice president, long-term care, Prudential Group Insurance.
“The demographics of the employer market align well with our strategy of providing voluntary benefit solutions to individuals through our group marketing and distribution platforms,” he added.
Prudential Group Insurance manufactures and distributes a wide range of group life, long-term and short-term disability, long-term care, dental, and corporate and trust-owned life insurance products in the United States. These involve institutional clients primarily for use in connection with employee and membership benefits plans. The firm has operations in the United States, Asia, Europe and Latin America.
Prudential, the second largest insurance company in the United States, joins the ranks of other top long-term care insurers, including MetLife and Unum, in leaving the individual policy sector.
Insurance industry analysts worry that as more companies exit the individual LTC insurance market, consumers will have fewer care options. This, in turn, could put pressure on Medicaid, which accounts for roughly 40% of all LTC services. According to the Department of Health and Human Services, more than 40% of people over 65 will need nursing home care.
It is unclear when Prudential will officially cease selling individual LTC policies.