MetLife, the insurance company that once used Snoopy, and other Peanuts characters, in it’s commercials, has decided to stop selling long term care insurance policies. MetLife was one of the largest insurance companies who sold this kind of insurance, with about 600,000 people who currently have a long term care insurance policy with MetLife. What does this mean for those policy holders?
This change means that MetLife is among the insurance companies who are leaving the market for a particular kind of insurance. They would prefer to just stop selling long term care insurance policies rather than fight for the customers that still want to purchase this kind of insurance in today’s market. One result of the health care reform regulations is that many insurance companies are re-evaluating their products and services, in an attempt to reduce their expenses in the future.
In general, insurance companies want to sell lots and lots of policies to consumers. This is part of how they make their profit. Insurance companies who sell long term care insurance are hoping that most of the people that they sell it to will decide to cancel the policy long before the insurance company has to start paying to cover the cost of long term care for that consumer. If so, it would mean that the money the person spent on the policy would become pure profit for the insurance company.
Now, if too many people keep paying their premiums, it’s possible that the insurance company will run into a “problem”. The insurance company is going to have to start paying for the cost of care for all the people who have held onto their long term care insurance for the proper amount of time. This can be very expensive for the insurance company. MetLife has a large amount of customers who purchased a long term care insurance policy. Clearly, MetLife didn’t take into account that this many people would actually keep their policies. So, MetLife has decided to stop selling this kind of policy, after December 30, 2010, in order to reduce their potential future expenses.
If you are among the people who have a long term care insurance policy from MetLife, don’t worry. Their decision to cease selling that kind of policy does not mean that your policy is no longer valid. Keep paying your premiums, and there shouldn’t be any problems. If you don’t have this kind of insurance, and are interested in getting a long term care insurance policy, you will have to start looking at other insurance companies, because MetLife isn’t interested in having you as a customer anymore.
Image by Toshihiro Oimatsu on Flickr