MedAmerica has stopped selling one type of long-term care insurance (LTCI) policy in California but is continuing to sell another type of LTCI policy in the state.
The company said it will stop selling the CareDirections Simplicity line in California but will continue to sell the FlexCare product there.
MedAmerica introduced the CareDirections Simplicity line in California in 2003.
The company decided that it had to increase rates on the product and does not want to raise rates on LTCI products that are still the market, the company said in a letter to producers.
"We do not believe it is good business to sell a client a product one day and raise their rates the next, and therefore, do not want to be in the business of raising rates on products that are currently being sold," the company said.
The company is discontinuing sales of the product April 19, the company said.
The FlexCare product, the product that remains on the market, offers a FlexCash rider that can pay a 75 percent or 100 percent cash benefit for care in all settings except a nursing home, the company said.
The claims experience for the CareDirections Simplicity line has been fine, but a high persistency rate has been a concern, and the low interest rate environment has been another factor, the company said.
"MedAmerica is 100 percent committed to cash LTCI," the company said.