Millions Who Bought Insurance to Cover Retirement Health Costs Face an Awful Choice

The financial turmoil gripping the U.S. insurance industry is leaving millions of long-term-care policyholders with the hard choice of either paying steeper premiums or losing their coverage, reports the Wall Street Journal . Only about 12 insurers still sell long-term-care coverage, down from more than 100. Financial advisers estimate long-term care often exceeds $100,000 annually per person, while LTCG analysts say the nationwide total tops $200 billion. Nearly all insurers in the industry grossly underestimated how many claims would be filed and how long people would draw payments before dying, as beneficiaries are living and retaining their policies much longer than expected. Following the financial implosion, nine years of ultralow interest rates also left insurers with much lower investment returns than they needed to cover those claims. Limra calculates fewer than 100,000 long-term-care insurance policies were sold in the U.S. in 2016, and sales declined to about 34,000 in the first half of last year. The American Association for Long-Term Care Insurance says a 60-year-old couple can now expect to spend about $3,490 in combined annual premium for a typical policy beginning with a maximum payout of $164,050 a person and then expanding 3 percent a year to $333,000 when the couple is 85.