As premiums for long-term care insurance go up and more large providers pull out of the market all together, the landscape for long-term care insurance is changing dramatically.

Some hybrid packages that combine long-term care with life insurance or annuities are emerging and more will be put forward in the next few years,  experts say.

Prudential Financial Inc. recently pulled out of the individual long-term care market, although the company will continue to honor policies already sold. But Prudential is only the latest of a string of companies removing themselves from this market. Some experts feel it is a natural reshuffling of a relatively new market and that long-term care insurance will continue to be available from some major firms, although prices will increase.

Others feel the situation is more dire and that actuaries miscalculated the entire market when it started in the 1970s and more companies will be pulling out.

Whichever result turns out to be true, hybrid policies offered as riders to life insurance and annuities, as well as other new products that have not surfaced yet, will take the place of strictly long-term care policies, the experts say. "More than 30% of the illustrations (propositions) for life insurance that we run here for people over 45 years of age have some type of long-term care rider and the percentage is growing," says Jim Swink, vice president of Raymond James Insurance Group who specializes in long-term care among other things.

"Some companies have pulled out, but I expect others to be in for the long haul," says Swink, who feels long-term care policies are not going to disappear.  But other offerings are going to become available, particularly in a couple  of years as the Federal Reserve raises interest rates to increase and insurance companies can begin making more profit on their investments, he says.

Russ Barschi, a registered investment advisor, and president of Seminars for the Advancement of Financial Education, located in New York City, feels rates for long-term care insurance will continue to escalate at faster than the rate of inflation as actuaries get a better idea of the risks the insurance companies are open to for these policies. "Five years from now you will be able to buy long-term care insurance, but will it be affordable? Mutual of Omaha, one of the largest providers, just filed for a price increase and it is pretty clear all companies are going to get hit down the road as baby boomers age," he said, forcing more price increases.

Premiums frequently are jumping to $3,000 or $5,000 a year for a typical buyer, advisors warn. That already has left many people who otherwise need these policies behind, unable to afford them.

As result, new hybrid insurance and annuity policies are being created to fill the gap and promise to become alternatives to the traditional methods of covering seniors in difficult years. These alternative policies are relatively new, but financial advisors are beginning to discover them, according to experts in the field.

Long-term care policies cover a certain level of care, sometimes home health care, for a specified period of time, depending on the policy. Financial planners have long advised their clients to anticipate long-term-care needs, including assisted living or a lengthy stay in a nursing home. Without insurance to cover those needs, entire estates can be wiped out, especially if a client's stay in a nursing home, costing several thousand dollars a month, is extended.

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