As Baby Boomers are realizing they may need long-term care insurance, they are hit with many challenges. The marketplace is shrinking, the cost of premiums is soaring, and providers are altering the policies they offer. These in demand long-term care insurance help cover expenses that typical health insurance doesn't such as nursing homes, in-home care, and assisted living.
Insurance companies have had to make major adjustments because the claims on long-term health care policies have exceeded their predictions due to people living longer and developing long-term illnesses. Topped with that, near record-low interest rates have depressed what the industry ears on the premium it collects. Ten of the top 20 individual long-term insurance carriers have bailed out in the past five years. This has caused the remaining insurance carriers to raise premiums. This shows the effect of a competitive market. The companies that can't stay in drop out and the other companies gain more demand and can raise their prices to cope with the effects.
Another issue discussed was that fact that many of the Baby Boomers do not want to invest in these insurance policies because they may never use them. So in order to make the sales, the industry created some hybrid products so that they can use the money for either long-term care if needed or they will have a life insurance benefit when they die. This shows the effect on suppliers to listen to the demand of their customers in order to continue to be profitable.
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