Unum Exits Group LTCi Market

Feb. 7 – Unum Group Corporation is getting out of the group long-term care insurance (LTCI) and preparing to increase the premiums it charges for in-force group LTCI coverage.  This should open up greater opportunities for group carriers that stay in the market, and create higher demand for individually owned LTC coverage.

Group LTCi is very difficult to price because it is virtually all “guaranteed issue” (no underwriting).  Typically, group LTCi involves larger corporations with staffs of 500 or more.  Actuarial research has recently found that policyholders do not lapse these policies when they separate from the company and take over payments of their portable policies, thus creating a serious “adverse selection” risk to the carrier.