When a Safety Net Is Yanked Away, By Ron Lieber, New York Times, November 12, 2010
“November is long-term care awareness month, and to celebrate, MetLife, a big player in the long-term care insurance industry announced on Thursday that it wanted to get as far away from the business as possible. “ That is the opening to this concern-provoking article in the New York Times.
It discusses how insurance companies writing long-term care insurance policies have seriously miscalculated their pricing models, and now see that they cannot sustain the business at these rates. Some long-term care insurance companies are exiting the market, as MetLife announced it will do as of December 30, 2010. Others are seeking substantial rate increases from policy holders. Reportedly, Genworth Financial is seeking an 18% increase in premiums on older policies held by about 25% of its customers, and John Hancock has requested permission to raise premiums for about 80% of its customers by an average of 40%, and stopped offering new long-term care insurance plans through employers while it says it is figuring out what to charge.
This prompts the author to pose the question: Is long-term care insurance doomed?
Read More at: Long-Term Care Insurance Begins to Fade Away – NYTimes.com.