MetLife announced the decision to discontinue the sale of individual and group long term care insurance policies. Over the past few years MetLife has pulled back from the long term care insurance marketplace. MetLife has indicated there decision to discontinue the sale of long term care products will not impact existing policy holders.

MetLife is one of the largest long term care insurance companies with approximately 600,000 insureds. MetLife indicated they do not have plans to sell this block of business, and will continue to support the policies already in-force. Provided premium payments are made on time, coverage cannot be cancelled.

Each MetLife long term care insurance policy has contractual obligations to the insured (also referred to as guarantees). MetLife cannot legally violate these contractual obligations. However, MetLife can increase premiums for coverage on a class basis.

The most effected groups are those covered by a multi-life policy or an employer group policy. With existing multi-life long term care insurance programs offered by MetLife, the program will be closed to new entrants. The date of program closure to new entrants will vary by group, and will be driven by the termination provisions in each multi-life program sponsor’s offer letter.

MetLife made a similar announcement in September 2008 for their Employer Group long term care insurance plan when they announced they intended to complete closing of these plans to new entrants by the end of 2011. After an extensive review MetLife has determined the actual and projected cost of this block of business significantly deviates from original pricing. As a result, MetLife plans to file for an in-force rate increase on their Employer Group long term care insurance business, and is expected to be significant.

If you have questions or concerns about a MetLife long term care insurance policy please contact us at (877) 579-9574 or complete our long term care insurance quote form to be contacted by a long term care insurance specialist.

Increasingly, we get calls from reporters who are doing more in-depth stories about long term care planning and the role of long-term care insurance.

First, it is a great feeling to help them get the portray a correct story since their words, whether written or oral can influence so many prospects and potential buyers. Friday, a national editor who I have worked with before called the American Association for Long-Term Care Insurance’s offices. At this point, I won’t reveal the story being working on but in the ensuing research I did – two pieces of information emerged. They are examples of when long-term care insurers go beyond what is required. You may not be familiar with them.

The first involves Genworth’s new policy being offered to AARP members. The policy offers a 60-day return policy. In simple terms, the consumer can return the policy within 60 days for a refund of monies paid. As most insurance agents know, the standard “free look” required by law is 30 days. Now, it bears stating that the State of Washington just passed a law mandating the 60-day provision. Who knows whether other states will follow.

And, in speaking with a long-time Genworth producer, it was noted that in an effort to provide outstanding customer service the company has not held rigid to the 30-day cut off. But clearly there was someone who thought this was a customer-friendly provision … and agreed to make it available.

The second story involves John Hancock. In recognition of the weak economy, the company allows (or allowed, I am not sure if the practice continues) policyholders who lose their jobs and fail to pay premiums for a certain period of time, to reinstate their policies without the typically-required health underwriting. What a recognition of going the extra mile to help the people who showed the good faith and sense to buy your product.

Having worked with the media for most of my life, every reporter will tell you it is not their job to “shill” for a company. So don’t ever expect to read about these items in the news.

But, in the current environment we are in — and with the news media focusing so much attention on negatives surrounding the insurance industry, it’s good to know there are insurers doing well because they do good. That’s a message the American Association for Long-Term Care Insurance is proud to help convey.

Long Term Care Insurance Insurance News You Never Hear

Los Angeles, CA – June 23, 2009 — Nearly half of individuals purchasing asset-based long-term care protection in 2008 were under age 65 according to the first national study of buyers. Two thirds (66%) of purchasers were women and the average single premium paid was just under $71,000 ($70,975). Research conducted by the American Association for Long-Term Care Insurance (AALTCI), the national trade organization, examined 2008 sales data for over 5,000 new policies.

“Asset-based long-term care insurance protection is becoming an increasingly popular way for individuals to protect against the risk,” explains Jesse Slome, AALTCI’s Executive Director. Asset-based long-term care policies offer the dual benefit of access to long-term care benefits as well as life insurance protection. “Many individuals find this coverage attractive because if they don’t use their long-term care protection, their beneficiaries still benefit from the life insurance coverage,” Slome explains.

The average single premium paid for an asset-based LTC policy in 2008 was $70,975, according to the Association study. This represented a four percent increase compared to 2007 when the average premium was $68,300. Just under half of policies (49.7%) had a base face amount of between $100,000 and $200,000. Some 30 percent had a face amount of life insurance protection of between $50,000 and $100,000. “Policies offer a long-term care insurance protection in multiples of the life insurance benefit,” Slome explains.

Purchasers of asset-based LTC policies were almost equally divided between pre-65 (49%) and 65-or-older (51%). Just over 10 percent (11.2%) of purchasers were between ages 45 and 54. Exactly two-thirds of purchasers were women (66%). “Buyers are older than individuals purchasing traditional long-term care insurance protection,” Slome notes. According to the Association’s study, some 84 percent of buyers of traditional LTCi protection in 2008 were younger than age-65.

Asset-based long-term care protection and traditional LTC insurance policies share the requirement that applicants health qualify for long term care insurance coverage. The percentage of accepted applicants declined with age according to the study’s findings. Some 70.2 percent of submitted policy applications by individuals between 45 and 54 were accepted. The percentage declined to 60.5 percent for applicants between ages 65 and 74.

“We anticipate the market for asset-based long-term care protection will increase in the years ahead,” predicts Slome. “Leading insurers such as Genworth Financial and Lincoln Financial Distributors are focused on the growth of this market and policy sales.”

Will the (Ted) Kennedy Legacy – a healthcare plan that includes provisions for a government-offered long-term care insurance provision – kill the private long-term care insurance industry?

The stort answer is, yes it indeed could. After all, what a sweet proposal – pay $65 a month ($780 a year) for five years ($3,900) and you’ve got long-term care coverage. And, you don’t even need to health qualify. Everyone qualifies.

If you don’t think there’s already interest, just do a Google search for “Kennedy long term care”. As a long-time and highly successful public relations guys, I know how I would spin this story to the media and thus to consumers. “We can do this because of mass numbers, and because we are cutting out those pesky middlemen – the long-term care insurers and the commissions paid to agents which can be as much as …” (I won’t go on … why make life easy for them … though they have bright minds working on this).

Best of all, this is the perfect time to make something like this happen. Insurers are happy to be surviving (who isn’t these days) … and agents aren’t organized. The Washington D.C.-based insurance lobbying groups have to contend with health insurance and you really don’t want to offend Ted Kennedy or others when the stakes (health insurance) are so huge.

Is the Kennedy “plan” attackable. Of course it is. And, at so many levels … and that’s before even talking to the real bright minds. From what I understand, no actuaries have even been called in to assess the real price.

But, perhaps most important, the time to seize the opportunity to respond is short. Those advocating an alternative plan are organized. They have egos and if they see this is generating good press … they’ll make every effort to secure more.

I hesitated a while before writing this blog. The American Association for Long-Term Care Insurance does not lobby and personally I have no intentions to walk the halls of the Capital.

But I am truly concerned. And, I believe others with a vested interest in both protecting Americans and not saddling taxpayers with another entitlement that isn’t properly priced and will ultimately balloon beyond any reasonable expectation should be concerned as well.

I have already seen a dozen online reports about the Kennedy bill (I’m sure it’s also appeared in print editions). They all focus on the $65-a-month figure. As the publicity grows (and it will), why would any sane consumer buy something that costs more? They’ll wait until they see what the government ends up doing.

Publicity builds momentum. Trust me, I introduced the Cabbage Patch Kids dolls … and it wan’t my brilliant work or that of the publicists who worked with me … we just keep feeding a little fuel to the momentum. Before you know it, we had a national phenomenon and the cover of Time magazine.

What’s my answer? I’m not really sure. I am reaching out to those I consider leaders in the industry. My personal commitment to members of the American Association for Long-Term Care Insurance is to do the best I can to serve the members, the industry. But on a personal note, my goal isn’t to be self-serving. I want to do what’s right for our country’s future … and the lives of my five children who will be paying the bill for Senator Kennedy’s legacy.

Lots of what happens in Washington never gets traction and so it’s been easy to ignore. This one shouldn’t be categorized as such.

The largest open long-term care insurance claim has surpassed $1.2 million in paid benefits, according to a just-released report from the American Association for Long-Term Care Insurance. The claimant, a woman, purchased coverage at age 43, paying an annual premium of $1,800. Three years later her claim began and has continued for almost 12 years. [Note: Payment of policy premiums ceases when an individual is receiving policy benefits.]

“As a result of increased longevity and medical advances, the need for long-term care is a new phenomenon for a generation of Americans,” said Jesse Slome, Executive Director of the industry trade group. “The pervasive concern about purchasing long-term care insurance is will I ever use it?”

According to Association data 180,000 Americans received benefits from their long-term care insurance policy and some $8.5 billion in claims was paid in 2008. “This is a significant increase in benefits paid compared to the prior year,” Slome explains. “Long-term care insurance is not the lottery. This is not something you really want to win; but having protection in place can certainly pay off and for thousands of people it increasingly is.”

The organization collected data on claims including the largest open claims (still being paid as of December 31, 2008) paid by six of the nation’s leading insurers. The second largest claim is by a woman who purchased her long-term care insurance policy at age 72, paying an annual premium of $12,766. Three years later her claim began and has continued for almost nine years ($1.02 million in benefits has already been paid for her nursing home care).

The largest claim being paid to a man exceeds $690,000. The individual purchased long-term care insurance protection through his employer at age 54, paying an annual premium of $2,560. The coverage was designed to pay benefits for five years. Two years later his claim began and has continued for almost seven years.

Nearly one in 10 (8.9%) of new individual claims initiated during 2008 prior to age 70 the study revealed. “While most long-term care insurance claims begin at older ages, typically in ones late 70s or 80s, accidents and illnesses are a common reason younger people need this care,” Slome notes. The Association’s study revealed that 30.5% of claims start between ages 70 and 79; some 60.6% after age 80. “Almost two-thirds of claimants receiving benefits (65%) are women,” Slome reports, “and the largest percentage of benefit payments (42.0%) are for care in ones own home versus a nursing home (30.5%).”

The five most common reasons for a long-term care insurance claim, according to the Association, are Alzheimer’s Disease, stroke, arthritis, circulatory issues or injury. “One in eight persons age 65 and over has Alzheimer’s,” Slome says. “The number of new cases is expected to increase to 450,000 a year by 2010 and to 615,000 new cases a year by 2030. It’s time for individuals to start planning for care should they need it in the future.” The study shows that planning can certainly pay off.

The six largest claims will be published in the upcoming summer issue of LTCi Sales Strategies magazine which is sent to all Association members.