Does that make any sense?

Of course not.

That’s absurd.

Yugo’s failure is not a blight on the auto industry. 

But that’s what the NY Times is implying. They want us to believe that one small insurance company that had less than 1% market share is proof that the entire long-term care insurance industry is collapsing. 

The Wall Street Journal tried to paint the same picture in 2016 with their article ominously entitled, “Collapse of Long-Term Care Insurer Reflects Deep Industry Woes.”

https://www.wsj.com/articles/small-insurers-big-collapse-reflects-deep-industry-woes-1480852801

My reply was here:

https://www.ltcshop.com/2016/12/09/yugo-failed-long-term-care-insurance-dead/

In an effort to denigrate the entire long-term care insurance industry, they use, as an example, probably one of the least financially stable companies to ever sell long-term care insurance.

Penn Treaty’s failure had many different causes. 

• had below-average financial ratings,
• offered policies with richer benefits than the rest of the industry, 
• had premiums that were much lower than the rest of the industry, and
• insured applicants who were often denied coverage by other insurers.

However, the biggest problem is that Penn Treaty ignored the federal guidelines for long-term care insurance benefit triggers.  

The federal government recommended, and the rest of the long-term care insurance industry used, “Activities of Daily Living” to determine when a policy would pay benefits.  Penn Treaty used “Instrumental Activities of Daily Living“. Someone could qualify to receive benefits from Penn Treaty’s #1 selling policy if they only needed help with shopping and cooking, for example.

Again, it’s kind of like the NY Times is using Yugo as a warning sign that the auto industry is collapsing. Better examples of the success of the long-term care insurance industry would be John Hancock, Mutual of Omaha, Massachusetts Mutual, New York Life, UNUM, Metropolitan Life, National Guardian, Transamerica, Thrivent, and on and on and on.

Today’s average company selling long-term care insurance has been in business for over 130 years.

The average insurance company selling traditional long-term care insurance today has been selling it for over 27 years. 

For the ten companies selling traditional long-term care insurance today, their A.M. Best ratings for financial strength are:

• A++ (Superior)
• A++ (Superior)
• A+ (Superior)
• A+ (Superior)
• A  (Excellent)
• A  (Excellent)
• A  (Excellent)
• A  (Excellent)
• A- (Excellent)
• C++ (Marginal)

Contrary to the New York Times article on long-term care insurance, the insurance companies selling long-term care insurance today do NOT have “wobbly finances.”