Another casualty in the mis-pricing of long term care risk is the Metropolitan Life Insurance Company – aka MetLife. From the article:
NEW YORK (AP) — MetLife Inc. said Thursday it plans to stop selling long-term care insurance at the end of December and won’t sign up new customers into group plans as of next year.
“While this is a difficult decision, the financial challenges facing the LTCI industry in the current environment are well known,” MetLife Vice President Jodi Anatole said in a statement.
MetLife is just another in the long line of companies that realized they priced their long term care insurance policies too low (any wonder that Medicaid programs are bankrupting states?). Just 2 weeks ago, John Hancock notified their policy owners that they will need to raise premiums by 40% (FORTY) – again because they mis-priced the risk (I wrote about this on my personal blog ChrisGrande.com, CLICK HERE).
Other Companies In the Same Boat
Other insurance companies, like Allianz, have also recently decided to simply get out of a business that their actuaries can not price correctly, likely due to lack of long term data and the rapidly changing life sustaining technologies that keep people alive longer, sometimes in a state of needing constant care.
My Take & Action item:
If you have long term care insurance, have it analyzed to see if the company backing it might be at higher risk of raising premiums. if you don’t yet have LTC insurance, consider the financial stability of the company in your decision-making.
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