All of us will eventually face the need for more help as we get older (as my mother points out, the alternative to getting older is not attractive to most people). Although medical technology has developed more ways to live longer, we still have not figured out how to help people live their later years in a safe environment without bankrupting their life savings.
The appeal of LTC insurance is to meet these needs. Problem is, even the insurance companies don't know how to correctly price these policies. No one knows, for example, how long someone might need assistance with the daily chores of everyday life. Moreover,with medical costs rising faster than inflation, and low interest rates hurting investment returns on insurance company portfolios, many insurance companies are finding that writing LTC policies is simply not attractive.
This morning's Lex column in the Financial Times notes that MetLife announced yesterday that it will stop writing LTC policies. Met, along with many other insurers, had once thought the market for LTC would be an attractive one from them, but it has turned out otherwise.
Here's an excerpt from the piece, with the full link below:
FT.com / Lex - Fixed rate blues