Prominent long term care insurance carrier Penn Treaty recently announced that it will discontinue offering the "unlimited lifetime" benefit option on all new policy forms as of 1/1/2007. Will other insurance companies follow suit? We think so, as the industry adjusts to changes in the all-too-real world of care and care giving.

With rising baby boomers life expectancies and broadening offerings in the care delivery systems "unlimited lifetime" benefits simply pose expanded and uncertain risk for insurers. This risk naturally translates to pricing which places "unlimited lifetime" benefit out of reach for the average consumer, so the insurers are opting to offer benefits which are limited to a fixed number of years payout or a limited "pool of money" payout.

This makes sense by insurance standards. Exposure to unlimited risk is not prudent for most companies, although some carriers may still choose to offer "unlimited lifetime" benefits to high net-worth clients.

Look for policies to focus more on 5-year, 4-year and 3-year benefits for long term care. This fits the common care profile, and 5-years of benefits would allow for transfer of assets under Medicaid guidelines set by the Deficit Reduction Act of 2005, meaning an estate could be protected while still qualifying for Medicaid after 5 years of "private pay" through the insurance mechanism.

We expect more and more insurers to limit their exposure by eliminating old-fashioned "unlimited lifetime" benefits. This change affects newly purchased policies, not policies already in force, and is yet another adjustment as this industry comes to grips with changes in the world of long term care.

This comes on the heels of the initial round of industry adjustments reflected in the waves of premium rate increases from 2001-2006 as insurers corrected for the initial under pricing of policies sold in the 1990s, the first decade these policies were offered. Considering the likelihood of future claims due to the cold hard fact that nearly half the population will need long term care, insurers have a duty to remain financially sound in order to pay future long term care insurance claims. This just makes good business sense.

Consumer choices are changing, surely, yet a need still remains, the need to protect assets from the devastating costs of long term care by transferring the huge risk of care to insurers though the insurance mechanism. It's really pretty simple: The risk is very high, and so is the cost of care, and there is simply no other vehicle than insurance coverage to protect your savings and investments.

Internet users can arrange for free, comparative rate quotes from respected, top-quality companies by searching online for "long term care insurance buyers advocate".