As several types of senior housing are often private pay only, some consumers have turned to long term care insurance as a way to cover the cost. However, recent reports of a downgraded stock rating for Genworth Financial, a major company providing this product, could mean this option is not a sure thing in the long run.
According to this article from Senior Housing News, the rating of NYSE: GNW went from “neutral” to “underperform” this week. Credit Suisse, a global financial services company, says this downgrade reflects “continued uncertainty in the long-term care insurance industry” and may have been the result of Genworth’s increased emphasis on the housing market recovery rather than their life insurance operations.
Regarding the uncertainty this places on the industry as a whole, Genworth is not fully responsible: MetLife and Prudential, other major companies that offered long-term care insurance, also “exited the market in recent months.”
Why, in a time when senior care and housing is so greatly needed and in high demand, are products like long term insurance leaving the market? The article references a report from Moody’s Investors Services that may answer this question: long term care insurance’s “complex structure and the difficult nature of profitably pricing policies.”
Your turn: Do you have a long-term care insurance policy?