Long-term care insurance industry is in trouble, analyst report says

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Long-term care insurance policies may not be long for this world, according to a new Wall Street analyst report.

“Key credit considerations for the sector are the relative newness of long-term care insurance and the long-tailed and complex product structure, which make it difficult to price the product profitably and to reserve for,” wrote Moody's Investors Service Vice President Laura Bazer in the report “Long-Term Care Insurance: Sector Profile.

LTC insurance carriers — at least the ones who haven't exited the market — have hiked their prices and reduced the benefits, making plans less attractive to potential policyholders, according to Moody's.