In 2006, at age 62, my wife and I took out a long-term-care insurance policy with Metropolitan Life. Premiums could have been raised incrementally, but until last year, there were no interval increases.
We were notified in 2021 that in each of the coming three years, unless we cut back on our coverage, premiums would be increased yearly so that in 2025 the yearly premium would be more than double the original rate. Our most recent premium, after cutting back on the coverage, was increased about 25%.
I wrote my representatives in the Vermont House and Senate and was told to write to the Vermont Department of Financial Regulation, which had to approve any rate increases requested by insurance companies. I did that and received a long letter explaining why the premium increases had been approved. The short answer is this: Met Life made mistakes. This is from the letter:
While DFR has established processes to mitigate rate disruption for Vermont consumers, we must also have a process that allows LTCI companies to charge adequate premiums to remain solvent and meet their promise to their policyholders.
For me, this seems disingenuous, leaving out “and pay executives what they demand.” Met Life’s online records show that the head of this division, Michel Khalaf, has seen his salary grow from 2017 to 2022 from roughly $11 million to $18 million per year. I wouldn’t argue that those figures give a complete picture of how well Met Life is doing, but I am guessing that few executives or other high-level employees at Met Life have suffered. Policyholders will.
Many of us will cancel our policies, lose the money we’ve put in, and see if we can change our retirement plans to fill the gap that long-term-care insurance was supposed to take care of. Part of the DFR’s letter regarding the Met Life increase explains that Met Life’s original premium calculations included an expected number of clients who would drop out of the policy. The calculations were wrong. Too many people kept up their policies. The coming premium increases should solve that problem.
I believe Vermont’s Department of Financial Regulation has let us down.
Don Herzberg
Norwich
