Most insurance products have a safety net under them to help reorganize the company or the products if a company were to fail. These safety nets are called "The State Guarantee Association" Fear of a life insurance company or an annuity company failing should not be a concern because of these state guarantees.

Ratings are essential for the consideration of long term care insurance. Always ask and understand their ratings of any company you are considering. Many companies with poorer rating have had a history of numerous premium increases. It may be less expensive over a period of time t select a company which may have a higher initial premium but may be less likely to raise premiums over time due to their expertise in underwriting and claims management. Rating and a history of premium increases should always be considered.

Also there is more company movement in this segment than in any other insurance area. Many LTC companies have been purchased or combined with others. It is a constant movement and a constant consolidation of the LTC companies that have caused concern over premium volatility. Many of the companies who were in LTC as short as 10 years ago no longer exist. Names such as AMEX, CNA and Cigna no longer offer these products and their book of business has been merged into other organizations.

There are numerous sources to determine the rating of any company you are considering such as AM Best and Fitch Ratings. A simple Google search will provide you with the necessary information about each company's financial rating and claim paying ability.

Another little known result of rating is agent compensation. Many companies with lower rating will pay higher commissions to the sales force to interest them in selling their products. Often a situation of bait and switch can come to the surface. The agent can show one policy and then switch to a lesser rated company when the decision is actually considered by the prospect.

Always ask for the ratings and verify them with a second source.