Thursday, March 08, 2012

Pru Bails on the Individual Long Term Care Market

Prudential has announced they will be withdrawing from the individual long term care market. An internal memo, followed by a press announcement, hit the industry yesterday.

We had advance notice, well, kind of, but were reluctant to post anything until it became "official".

Prudential to Discontinue Sales of Its Individual Long-Term Care Insurance Products

After a thorough analysis of our long-term care insurance business, we've made the difficult decision to discontinue sales of our individual long-term care insurance products, including LTC3SM, LTC EvolutionSM, and our multi-life programs (ESP and Affiliation). We will continue to market our group long-term care insurance products, Solid SolutionsSM and LTC123SM. Our decision reflects the challenging economics of the individual market and our desire to focus our resources and capital on the group market, where we see the greatest opportunity.

Our decision to stay in the group long-term care insurance business, which we have proudly been in for more than 25 years, also reflects the strong strategic fit with our broader group insurance product offerings, including life, accidental death and dismemberment (AD&D), disability, and dental. The demographics of the employer market align well with our focus on providing voluntary benefit solutions to individuals through our group marketing and distribution platforms.

All individual long-term care insurance applications must be received by March 30, 2012 to be considered for issuance. Any applications received after March 30, 2012 will not be processed.

Employer Sponsored Program (ESP) and Affiliation cases must be approved on or before March 30, 2012. Once approved, applications under these programs must be received no later than 60 days from the date of case approval or May 30, 2012, whichever is sooner.

Existing Policyholders
We take our commitment to our policyholders seriously. Existing individual long-term care insurance policyholders will continue to be covered under the terms of their Prudential LTC insurance policies, which are guaranteed renewable. This means that as long as premiums are paid on time, and benefits are not exhausted, coverage cannot be cancelled, although premiums can be changed based on experience, on a class basis, in accordance with the terms and conditions of the policy.

Policyholders will continue to receive customer service and claims support. Plan upgrades will be allowed as permitted by their contract.

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