Long Term Care Insurance Companies

There are over 2,000 insurance companies in the United States. Of these, approximately 10 offer long term care insurance. The following is a list of the top 10 long term care insurance companies and their financial strength ratings. A.M. Best, Moody’s, Standard & Poor’s and Fitch are the world’s leading financial rating institutions.

Company

A.M. Best

Moody’s

S&P

Fitch

American General

A

A1

A+

A-

Genworth

A

A2

A

A-

John Hancock

A+

Aa3

AA

AA

MedAmerica

B++

-

A-

-

MetLife

A+

Aa3

AA-

AA-

Mutual of Omaha

A+

Aa3

AA-

-

Prudential

A+

A+

AA-

A+

Transamerica

A+

 

AA-

AA-

*Company ratings as of August 1, 2010. Subject to change without notice.

**Dash (-) indicates company isn’t rated by the financial rating institution.

What do these ratings means?

A.M. Best Long Term Care Insurance Companies Rating Definition

Ratings:

Description:

Definition:

A++, A+

Superior

Able to meet insurance obligations.

A, A-

Excellent

Able to meet insurance obligations.

B++, B+

Good

Able to meet insurance obligations.

B, B-

Fair

Vulnerable to unfavorable economic conditions.

C++, C+

Marginal

Vulnerable to unfavorable economic conditions.

C, C-

Weak

Very vulnerable to unfavorable economic conditions.

D

Poor

Extremely vulnerable to unfavorable economic conditions.

E

Under Supervision

Company is under regulation, preventing normal business operations.

F

In Liquidation

Company is undergoing voluntary liquidation.

S

Suspended

Unevaluated due to inadequate information or lack of cooperation.

Moody’s Long Term Care Insurance Companies Rating Definition

Ratings:

Description:

Definition:

AAA

Extremely Strong

Market conditions are unlikely to affect a fundamentally strong position.

AA

Very Strong

High-grade company with marginally larger long-term risks.

A

Strong

Financially secure, but signs of possible long-term susceptibility.

Baa

Adequate

Lacking in certain protective elements over the long term.

Ba

Questionable

Ability to meet obligations is questionable.

B

Poor

Long-term ability to meet obligations on time is small.

Caa

Very Poor

May be in default of financial obligations already.

Ca

Extremely Poor

In default of financial obligations.

C

Extremely Poor

Very poorly positioned to offer financial security.

Note: Moody’s appends numerical modifiers 1, 2, and 3 to each generic rating classification from Aa through Caa. Numeric modifiers are used to refer to the ranking within a group – with 1 being the highest and 3 being the lowest. However, the financial strength of long term care insurance companies within a generic rating symbol (Aa, for example) is broadly the same.

Standard & Poor’s Long Term Care Insurance Companies Rating Definition

Ratings:

Description:

Definition:

AAA

Extremely Strong

Very unlikely to be affected by adverse economic conditions.

AA

Very Strong

Unlikely to be affected by adverse economic conditions.

A

Strong

Marginally more likely to be affected by adverse economic conditions.

BBB

Good

May be affected by adverse business conditions.

BB

Marginal

Adverse business conditions may lead to inability to meet obligations.

B

Weak

Adverse business conditions are likely to affect ability to meet obligations.

CCC

Very Weak

Depends on favorable business conditions to meet obligations

CC

Extremely Weak

Likely to not meet all financial obligations.

R

Regulatory Action

Subject to regulation due to insolvency.

NR

Not Rated

No opinion.

Note: Ratings from ‘AA’ to ‘CCC’ may be modified by the addition of a plus (+) or minus (-) sign to show relative standing within the major rating categories.

Fitch Long Term Care Insurance Carrier Ratings Definition

Ratings:

Description:

Definition:

AAA

Extremely Strong

Very unlikely to be affected by adverse economic conditions.

AA

Very Strong

Unlikely to be affected by adverse economic conditions.

A

Strong

Marginally more likely to be affected by adverse economic conditions.

BBB

Good

May be affected by adverse business conditions.

BB

Marginal

Adverse business conditions may lead to inability to meet obligations.

B

Weak

Adverse business conditions are likely to affect ability to meet obligations.

CCC

Very Weak

Depends on favorable business conditions to meet obligations

CC

Extremely Weak

Likely to not meet all financial obligations.

R

Regulatory Action

Subject to regulation due to insolvency.

NR

Not Rated

No opinion.

Notes: “+” or “-” may be appended to a rating to indicate the relative position of a credit within the rating category. Such suffixes are not added to ratings in the ‘AAA’ category or to ratings below the ‘B’ category.

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