Disability Insurance Blog

Long Term Care Policy Challenges


Friday, December 31st, 2010

Long term care insurance policies, marketed heavily in recent years as a way to protect older persons and provide financial benefits where they are no longer able to care for themselves, have seen a poor claims history, and insurers are reacting aggressively.

Met Life has already indicated that they will leave the long term care marketplace in 2011, while John Hancock has sought to increase its rates for in force coverage by 40%. It is quite likely that these long term care insurance policies will cause all insurers to reflect upon its go forward sales, and to increase pressure upon the claims teams dealing with both current and future claims.

This is a remarkably similar pattern to what occurred with long term disability insurance policies, where the insurers were quite aggressive in marketing the coverage, and when the claims history became unfavorable, an increased amount of claims were denied and/or terminated, often improperly.

We will continue to provide information about what is likely to become an alarming trend.