Rethinking Long-Term Care Policies: Will Your Health-Care Insurer Outlast You?

by Mike ‘Mish’ Shedlock
Mish Talk

One of the little-discussed consequences of low and negative rates is the impact they have on the viability of insurers, especially long-term care insurers.

Insurers sold policies long ago expecting to invest proceeds in high-grade corporate bonds yielding a respectable 7.5% or more. Thanks to central bank policies, bond yields are in the gutter.

In February, Standard & Poor’s downgraded Genworth’s life-insurance units to junk, citing reduced profitability. Met-Life stopped selling long-term care policies altogether.

Will your insurer even be in business when the time comes for you to collect?

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