MetLife Inc., the largest life insurer in the U.S., said it plans to discontinue the sale of new Long-Term Care Insurance (LTCI) coverage next year, citing ongoing challenges facing the LTCI industry.
However, MetLife will continue to accept new applications for individual LTCI policies received on or before Dec. 30, 2010.
From 2011, MetLife will be discontinuing new enrollments into existing group and multi-life LTCI plans. The timing will vary based on existing contractual obligations, the company said in a statement.
New York-based MetLife said its decision will not impact coverage of existing LTCI policyholders.
"While this is a difficult decision, the financial challenges facing the LTCI industry in the current environment is well known," said Jodi Anatole, vice president, Long-Term Care Products, for MetLife.
Insurance firms are being pressured by low interest rate environment, which is leading to restructuring of certain life insurance products, including long-term care insurance.
In addition, LTCI policy holders are also being hurt due to steep rise in premiums, partly due to increased longevity of policyholders and lower cancelations of policies.
Long-term care insurance, an insurance product sold in the United States and United Kingdom, helps provide for the cost of long-term care beyond a predetermined period. Long-term care insurance covers care generally not covered by health insurance, Medicare, or Medicaid.
Long-term care insurance generally covers home care, assisted living, adult daycare, respite care, hospice care, nursing home and Alzheimer's facilities. If home care coverage is purchased, long-term care insurance can pay for home care, often from the first day it is needed. It will pay for a visiting or live-in caregiver, companion, housekeeper, therapist or private duty nurse up to 7 days a week, 24 hours a day (up to the policy benefit maximum).
Shares of MetLife were down 96 cents, or 2.35 percent, at $39.96 in Thursday morning trade on the NYSE.