MetLife announced this month that it would stop selling Long Term Care (LTC) insurance. The company cited financial challenges with this segment of the insurance market.
According to the Wall Street Journal, MetLife is among the bigger sellers of the coverage, with about 600,000 policyholders, or about 8%, among the eight million who have long-term-care insurance in the U.S., according to the company and an industry trade association.
We suspect MetLife determined that Long Term Care insurance will have significant, and increasingly greater numbers of claims as the Baby-Boom generations age. To make the insurance profitable for the company, MetLife would have to charge much higher premiums than the current going rates. With widespread unemployment and a struggling economy, now is probably not the best time to sell a product that, to most, would be out of financial reach. Other companies are also obviously feeling the pain as they too are either scaling back their LTC offerings or seeking approval for drastic premium increases in order to stay financially healthy in view of present and anticipated claims experiences.
What does all of this mean to you, the individual who is either contemplating the purchase of such insurance, or worse, dealing with an LTC benefit denial? It means the carriers aren’t very good at underwriting this risk, and so they will probably continue to jack up premiums, and deny benefits wherever they can. Buckle up, and proceed with caution and care. In the case of claims, seek legal advice at the first signs of your insurance company giving you trouble, or making repeated or burdensome demands to support your claim.