MetLife Inc. (MET) plans to discontinue sales of individual
long-term care insurance next year, as well as new enrollments into
group and multi-life plans with the timing based on contractual
obligations.
The move won't affect current policyholders as long as premiums
are paid on time.
Record-low interest rates are becoming a major headache for
insurance companies, which are warning of lower profitability if
rates stay at current levels through next year or beyond. The
increasing likelihood of sustained low rates and bond yields is one
reason life insurers have redesigned and re-priced some products,
offering less-generous features to individuals. These include
long-term care insurance and retirement-income products with
minimum-income levels.
Many people with long-term-care insurance polices are getting
hit with a new round of steep premium increases. Long-term-care
insurance helps cover the cost of in-home care or nursing homes and
assisted-living facilities. Insurers say the increases--which
generally must be approved by state regulators--are due to
policyholders living longer, generating higher claims and canceling
fewer policies than they had projected.
MetLife last month reported it swung to a third-quarter profit,
marking a full year in the black for the biggest U.S. life insurer,
although operating results--though better--fell short of analysts'
views.
Shares were down 1.1% at $40.50 in recent premarket trading amid
broad weakness.
-By Tess Stynes, Dow Jones Newswires; 212-416-2481; Tess.Stynes@dowjones.com;