Long Term Care Insurance Companies

 

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Long term care insurance companies develop and offer products that help customers prepare for the costs of care in the future. They are also called carriers, especially by professionals and agents. One of the most important choices you’ll make when you purchase an LTCi policy is from which carrier you will buy it from, as this choice will dictate your policy’s strength, flexibility and affordability.

Carrier Ratings and Reviews

To help consumers in making this important choice, several institutions continually grant long term care insurance company ratings to the carriers. These ratings show how financially sound the carriers are in meeting the claims of policyholders, as well as how stable and dedicated they are in providing products and services to the market.

Insurance Rating Companies

Carrier reviews are conducted by three major insurance rating companies: A.M. Best Company, Standard and Poor’s and Moody’s Investor Service. It’s recommended to look up the ratings of the insurance companies you are considering to purchase a policy from.

A.M. Best Ratings

A.M. Best only releases its ratings for companies with a licensing fee, so you will need to call the insurance company and ask for their A.M. Best rating, or you may also ask your agent for this information. Here’s a brief overview of their ratings:

  • A++ and A+: Superior (superior overall performance, very strong ability to meet obligations to policyholders)
  • A and A-: Excellent (excellent performance, strong ability to meet obligations to policyholders)
  • B++ and B+: Very Good (very good overall performance, good ability to meet obligations to policyholders)
  • B and B-: Adequate (adequate performance, can meet obligations to policyholders but vulnerable to economic or underwriting changes)
  • C++ and C+: Fair (fair overall performance, can meet current obligations to policyholders but vulnerable to economic or underwriting changes)
  • BC and C-: Marginal (marginal overall performance, can meet current obligations to policyholders but very vulnerable to economic changes)
  • D: Very Vulnerable (poor overall performance, can meet obligations to policyholders but extremely vulnerable to economic or underwriting changes)
  • E: Under State Supervision (under state insurance regulatory authority supervision, control or restraint)
  • F: In Liquidation (under order of liquidation by court of law, or voluntarily liquidated)

Visit www.ambest.com for more information.

Standard and Poor’s Ratings

Standard and Poor’s reviews the financial strength of more than 300 insurance companies around the world. Here’s a brief overview on their ratings:

  • AAA: Superior (superior financial security, overwhelming capacity to meet obligations)
  • AA: Excellent (excellent financial security, strong capacity to meet obligations)
  • A: Good (good financial security, capacity to meet obligations susceptible to economic or underwriting conditions)
  • BBB: Adequate (adequate financial security, capacity to meet obligations susceptible to economic or underwriting conditions)
  • BB: Adequate (adequate financial security, capacity to meet obligations vulnerable to economic or underwriting conditions)
  • B: Vulnerable (vulnerable financial security, capacity to meet obligations particularly vulnerable to economic or underwriting conditions)
  • CCC: Extremely Vulnerable (extremely vulnerable financial security, capacity to meet obligations is highly questionable)
  • NR: Not Rated

Visit www.standardandpoors.com for more information.

Moody’s Ratings

Moody’s also reviews the financial stability of investment institutions, not just insurance companies. Their rating system varies slightly with an additional modifier or 1,2 and 3, which designate how high a company is in its rating category.

  • AAA: Exceptional (exceptional financial security, any changes will not heavily impact its position)
  • AA: Excellent (excellent financial security, but long-term risks are larger)
  • A: Good (good financial security, but can be susceptible to changes)
  • BAA: Adequate (adequate financial security, but vulnerable to changes)
  • BA: Questionable (questionable financial security, moderate ability to meet obligations)
  • B: Poor (poor financial security, low ability to meet obligations)
  • CAA: Very Poor (very poor financial security, may default on obligations)
  • CA: Extremely Poor (extremely poor financial security, often in default of obligations)
  • C: Lowest Rated Class (may be unable to offer any financial security)

Visit www.moodys.com for more information.

By knowing how well rated your prospective insurance companies are, you will be able to make a sound decision on how reliable and secure your LTCi policy will be.

Sources:

http://www.ltcoptions.com/long-term-care-insurance/long-term-care-insurance-companies/

http://www.aaltci.org/long-term-care-insurance/learning-center/company-ratings.php

http://longtermcareinsurancepartner.com/resources-page/long-term-care-insurance-company-ratings

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