LONG-TERM CARE INSURANCE

PRODUCT VIABILITY ANALYSIS: LONG-TERM CARE INSURANCE

The purpose of this project was to assess the viability of long-term care insurance as a product offering by Prudential Insurance Company. Long-term care insurance helps cover the cost of a person's care or supervision over the course of an illness, disability, or aging. The projection is that approximately one-half of adults in the United States will have a need for long term care at some point in their lives.

Long-term care in the United States is very costly. Similarly, long-term care insurance in the United States is very costly in comparison with other forms of health insurance.

The analyses developed for the assessment of the viability of the product indicate that the market for long-term care insurance in the United States will not grow substantially over the coming five years for reasons of (a) high premium costs for the insured and (b) increasing product costs for the insurers. Specific companies such as Prudential Insurance Company may be able to do well in the long-term care insurance market if they couple the long-term care insurance product as a part of a package of financial security products. This approach, however, likely will reduce the size of the potential market because most people with the need for long-term care insurance likely will not have the financial assets necessary to quality for the financial security package product.

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Category: Medical - L