Yesterday, the long term care insurance world received news that yet another carrier would be leaving its midst by the end of 2011: Guardian Life Insurance Company of America, which has sold individual LTCI through its Berkshire Life Insurance Company of America unit since 2004, has reviewed its position in that market and has decided to abandon it in favor of its core life and DI business.
At first blush, this has little to nothing to do with independent agents. Yes, this is the second carrier within months to shutter its LTCI business. And yes, John Hancock and Genworth individually made announcements that they would raise rates on in-force policies. John Hancock even suspended its group sales last September as it re-evaluates its current small and large-group pricing and design. (Editor's note: We originally misstated the status of John Hancock's group LTCI division, and have corrected our statement above)
Yet as a captive company, Guardian's actions really only affect its career agents, most of whom probably won't care anyway. This simply heralds a normally focused company's exit from what amounts to a short-lived experiment.
Or does it?
Industry experts say that all of the recent LTCI market turmoil has been a result of early pricing missteps: Carriers miscalculated just how many people would actually need benefits through these policies. I guess they figured that most people would bail on their premiums or die before they actually needed care.
