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MetLife to Exit Long Term Care Market

MetLife Inc., one of the largest providers of long-term care insurance in the U.S., said that it will stop selling the coverage, a product that...
November 16, 2010

MetLife Inc., one of the largest providers of long-term care insurance in the U.S., said that it will stop selling the coverage, a product that has been difficult for insurers' to manage and has required some to pay far more in claims than they expected. According to the company and industry trade groups, MetLife has approximately 600,000 policyholders, representing approximately 8 percent of the eight million Americans with long-term care insurance. Other insurers have withdrawn from selling long-term care policies after deciding not to try to compete in the small market. Also, the large losses among life insurers during the financial crisis have led to the reconsideration of a number of product lines, including long-term care and retirement plans. Others providers of long-term care insurance have increased their prices and continue to seek approval for increases from state regulators as costs rise at rates higher than anticipated. Industry members said that policyholders are living longer and are filing more claims than expected. These insurers also said that their customers are holding on to policies at a higher rate than they anticipated.

Meanwhile, Genworth Financial is looking for an 18 percent premium increase on older policies held by about 25 percent of its customers, and John Hancock has asked for permission to raise premiums on about 80 percent of its customers by about 40 percent. The question is now whether long-term care insurance will survive, some observers say.

Click here to read MetLife Steps Back From Long Term Care (Wall Street Journal 11/12/10)

Click here to read When a Safety Net Is Yanked Away (New York Times 11/12/10)

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