Issues with Annuities and Long Term Care Insurance?

Financial and insurance products have long been key retirement planning components – helping savers mitigate retirement risks and provide retirement income. According to a recent issue of MarketWatch, however, those types of products are getting harder to find as some of the major companies back out of the market.
Genworth last week said it will stop selling variable annuities and MetLife decided late last year to stop selling long-term care insurance policies.
Why? These are all business decisions based on current economics. But in the case of long-term care insurance, it seems some of the bigger providers got their pricing wrong. Many simply guessed wrong about how fast costs would rise and how many people would let their policies lapse.
If you can find an appropriate policy for yourself and/or your loved ones, long-term care insurance is still recommended by most experts.
“The fact that pricing is a concern suggests that you may want to purchase long-term-care insurance while you are young (when premiums are low) and in good health and while there are still choices available in the marketplace,” says Christine S. Fahlund, a vice president and senior financial planner at T. Rowe Price Investment Services Inc. “It is very difficult to self-insurance for long-term care, since your expenses could potentially be catastrophic if you or your spouse needs care around the clock for more than one or two years.”
As for the variable-annuity market, experts say that Genworth is leaving the business because it never truly penetrated the market deep enough to develop the kind of scale required to offer these products profitably.
Experts still suggest you continue to consider and buy variable annuities if such products are right for you. But do carefully consider the company that stands behind your product.

To learn more about long-term care insurance and retirement planning call our office for an appointment at 301 663 9230. And, as always, if you are considering the purchase of a retirement product – such as insurance or an annuity – don’t hesitate to ask us for an objective review to untangle the weeds of the market and help achieve your goals.

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