Citing an array of classic problems – including interest rates, morbidity, mortality, and persistency – long-term care and general insurance behemoth MetLife announced this week that it will be leaving the long-term care marketplace completely. And coming on the heels of recent announcements last month by GenWorth and John Hancock of significant premium increases on large blocks of their policies, it would seem that the long-term care insurance marketplace is in a bit of turmoil. Does this mean the industry is in trouble, or is this actually a sign of stabilization?
For many years, the no-load space for life insurance products has been very limited, to a large extent because fee-based advisors were perceived as being a very weak target market by the traditional insurance companies.
However, a new entrant to this marketplace is raising the stakes on the pricing and transparency of permanent life insurance, and is starting to get some attention as a result!
The pitch goes something like this: “You are eligible for more insurance than you currently have, giving you “excess capacity” for insurance on your life. Why don’t you sell that capacity, since you’re not using it anyway, and put the extra money in your pocket to meet your own goals?” And if it wasn’t against public policy, the strategy might even work!Read More…