State Farm Pulls Long Term Care Insurance From Seven States

LOS ANGELES - March 28, 2013 - PRLog -- Los Angeles; March 28, 2013 - State Farm Insurance has announced it will cease offering long term care insurance in California, Arizona, Connecticut, Hawaii, Indiana, Nevada and New York.

"Long term care insurance can be a very viable business but an insurance company needs both critical scale and a commitment to meeting the needs of policyholders," explains Jesse Slome, executive director of the American Association for Long-Term Care Insurance http://www.aaltci.org.  "Many companies have recognizable names but they really don't sell many policies and that often is an indicator of things to come."

Speaking to Association members who questioned the move, Slome noted that the Association recently reported that leading insurers recorded a 30-to-55 percent increase in policy submissions for the first two months of the year.  "Companies like John Hancock and Mutual of Omaha are large entities that are actively building the marketplace," he added.

"There are several reasons why an insurance company ceases selling products in certain states," Slome shared with the group.  "It could be in anticipation of filing a newer product with State Departments of Insurance, during which they no longer want to offer a product they believe is underpriced to pay future claims."  He noted that this was a similar reason other insurers have taken similar steps in California.

"Bottom line, there are still many options for consumers interested in protecting their future," Slome added.  "And, even when an insurance company ceases selling new policies they still must honor all the policies in-force, something consumers do not always understand."   The long term care insurance expert noted that there were once as many as 100 insurance companies offering policies.  "Today, we have roughly 10 companies due to mergers, acquisitions and, of course, companies exiting the marketplace," Slome notes.  "But there once were 100 car makers in the U.S. and today just a handful remain."

The American Association for Long-Term Care Insurance was established as a not-for-profit trade group and focuses on educating both consumers and insurance professionals.  For additional information on long term care insurance costs http://www.aaltci.org/long-term-care-insurance-costs visit the organization's website or call the national organization at 818-597-3227.