Today there was an article in the Des Moines Register about how Iowans (like all Americans) are facing more and more problems with some of their long term care insurance policies.  Ususally, these policies were purchased years ago, before much of the current model legislation from the NAIC was enacted.  In other words, these policies were night and day different from today’s policies.  Guarantee Trust Life Insurance Company in particular has a specific complaint from one of the readers:

“Recently we talked with Michael Niday, a 57-year-old bricklayer who lives in Carlisle. Four years ago, he and his wife, Coleen, purchased long-term-care policies from Guaranteed Trust Life Insurance Co. through an agent. Michael Niday said he figured buying these policies at a younger age while they were in good health would make them more affordable in the long run. Once again, that is not the case. In 2003, annual premiums for the couple’s plans totaled $1,415. After paying rate increases to preserve riders on the policy, the Nidays have now been notified that later this year premiums will increase to nearly $5,000 to maintain the coverage they initially signed up for. Michael Niday is not sitting still for this. He has contacted two state agencies, Sen. Charles Grassley, the insurance company and this newspaper, as well as state offices in neighboring states, to find out if residents have complained about similar rate increases. The bottom line: Niday isn’t getting any help from anyone.”

One overlying things that I see in every complaint about a long term care insurance company is that the company is not a top-rated financially stable company.  For example, Guarantee Life Insurance is rated B+ and according to Comdex, is in the 44th percentile of all rated companies. At our brokerage, we use Comdex, AM Best, S & P, and other ratings agencies to compare companies.  We provide only the top companies with A ratings or better.  Sure, the other guys may have better initial rates, but you want stability, not just low price.  That’s why our spreadsheet of quotes we provide to each client is great – it shows the companies with the highest ratings side by side for easy comparison.