MetLife to Sell Banking Unit to Avoid ‘Too Big Too Fail’ Regulation

via www.insurancejournal.com

MetLife, the largest life insurance company in the United States, has put its banking operations up for sale to avoid the “too big to fail” regulatory scrutiny that analysts have said was likely.

MetLife said Thursday it may sell MetLife Bank’s depository business, which includes savings and money market accounts. The company said it will still write home mortgages; life insurers tend to like mortgages as part of a diversified investment portfolio.

MetLife has hired Deutsche Bank, which ran the recent sale process for larger online bank ING Direct USA, to handle the sale. One industry source said many of the companies that lost out on ING Direct may look at MetLife Bank, among them Ally Financial and CIT Group.

NEW YORK, May 24, 2010 (BUSINESS WIRE) — MetLife announced today a new life insurance needs assessment tool and simple tips that mark the beginning of a major initiative to change the way Americans think about and purchase life insurance. MetLife’s new online tool — the Life Insurance Needs Calculator — provides clear guidance for how much life insurance consumers really need and, importantly, how much it will cost. Ten Simple Life Insurance Tips will make it easier for them get started. By removing purchase barriers and simplifying the life insurance purchase process, Americans will be better able to easily and affordably protect their families.

Nearly six in ten middle class households (59%)(1) — defined as Americans ages 25-44 with household incomes under $100,000 — recognize the need for more life insurance protection and half of these households intend to buy coverage in the next year.

“Buying life insurance is challenging for even the most motivated,” said Beth Hirschhorn, senior vice president and chief marketing officer for MetLife, the largest U.S. life insurer. “Of those people who say they will buy life insurance, research shows that more than 80% will fail in their attempt.”

Consumers who are motivated to purchase life insurance often don’t succeed for several reasons, among others:

– They turn to the Internet for information and grow confused because they get widely varying recommendations regarding how much and what kind of life insurance they need.

– They often assume coverage will cost too much for their budgets and the lack of easy-to-find cost information drives many out of the buying process early on.

– Those who actually do apply for coverage often confront a complicated and cumbersome process that can be more time-consuming and complex than expected.

Life Insurance: How Much and How Much ($$)

To help overcome these barriers no matter where individuals end up buying, MetLife has introduced a new online tool to provide clear guidance about life insurance.

MetLife’s new Life Insurance Needs Calculator (www.metlife.com/straightstory) makes it easy for individuals to learn about the right amount of life insurance for their family’s needs based on their personal situations. To design the new tool, MetLife worked with hundreds of consumers and incorporated learnings from months and months of research. With this tool, MetLife had one goal in mind: providing consumers with a unique user experience that’s intuitive, relevant and groundbreaking in its simplicity. The new tool poses a handful of questions that are easy to understand and easy to answer. What’s more, the tool deconstructs the recommended coverage amounts so that consumers understand how the recommendation was calculated and what it will cover.

MetLife’s online Life Insurance Instant Quote Tool, which complements the new Life Insurance Needs tool, makes it easy for individuals to get a no obligation quote without having to enter personal information (and without any sales pressure). The “Click to Call” and “Click to Chat” features embedded in the tools help consumers get immediate answers to questions that might pop up along the way, in whatever way they are most comfortable.

“What’s good for the consumer is good for MetLife. By spending months ‘walking in our customers’ shoes,’ we recognized the buying process was less than ideal. That’s why we are changing the customer experience now with more improvements to be introduced in the near future,” added Hirschhorn.

Life Insurance: 10 Simple Tips to Get Started

For those who are interested in purchasing life insurance but don’t know how to begin, below are ten simple tips to get started:

1. If you have children or people who depend on the money you earn, you need life insurance. Its primary purpose is to protect your income. Life insurance helps those you care about keep on living as they would if you were still earning a paycheck.

2. Basically, life insurance replaces your paycheck if you aren’t there to earn it. 60% of annual income times years to retirement is a quick way to estimate how much money that means over your working life.

3. Some life insurance is better than no life insurance. A good starting place is coverage equal to outstanding debt + 5 years of salary. Outstanding debt could include mortgage, car payments and student loans.

4. Life insurance is less expensive than you think. A healthy 35-year-old can pay as little as $30 a month for $500,000 of term coverage. Since life insurance does get more expensive as you get older, it may make sense to buy as much coverage you need while you’re young and healthy.

5. Life insurance is a smart financial move. Spending 1% of your annual salary protects years of income. To get the amount of coverage MetLife recommends, you can expect to pay about 1% of your annual salary on the annual cost of term life insurance.

6. Make sure you know how much life insurance you get at work. Buy additional coverage — through work or with a personal policy — to meet your unique needs.

7. Life insurance needs change over time because of life events such as a new family member, a new job, a move or even a pay raise at work. Review your coverage annually.

8. If you don’t have life insurance, term insurance is an easy and inexpensive way to get started. Because term life insurance runs out at the end of the term, use it to protect needs that you can anticipate such as paying off a mortgage or funding college for your children. Permanent life insurance may also be an appropriate component of your lifetime financial plan.

9. Life insurance is a guarantee. The financial strength and reputation of the company you buy it from matters. Ask around and do some research before you buy.

10. There is no substitute for good advice. The more you know about life insurance basics, the more control you have over deciding what’s right for you. To find out how much life insurance is right for you if you want death benefit protection and living benefits, or to leave a financial legacy, you need to talk to a professional.

(1) Strategic Research Insights Macromonitor Consumer Study

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SOURCE: MetLife, Inc.

Closing the Underinsured Gap:

• Step 1: Evaluate Your Plan

• Step 2: Enhance Your Group Life Benefits Package

• Step 3: Educate—Promote the Value of Insurance

MetLife presented the results today of a study that researched the importance of employers helping maximize the value of group life insurance benefits. The report, “Three Steps to Closing the Underinsured Gap: Evaluate, Enhance, Educate,” is offered by MetLife as a tool to highlight the workplace as a key source for driving change of the underinsured.

Graham Cox, vice president of group life products for MetLife, said that Americans are largely underinsured and the workplace can be pivotal in turning that tide around.

“More than half of working Americans look to the workplace for their financial protection products,” Cox said in a statement. “A perfect opportunity exists for employers to take some steps today that can have long-lasting effects. Targeted communications, educational tools and access to supplemental amounts of coverage through the workplace – even when 100% employee-paid – can encourage employees to obtain the right amount of coverage for their personal needs.”

The full report can be found here in PDF format: Three Steps to Closing the Underinsured Gap

The study was comprised of responses from 1,000 widows and widowers, with the deceased spouse between the ages of 25- and 60-years-old at time of death.

MetLife Bank announced a new pricing option last week for homeowners who take advantage of their reverse mortgage products, which are typically most popular among seniors. The new option will make additional funds available to borrowers at a lower cost, allowing them to fund a more comfortable retirement.

This new reverse mortgage pricing option will eliminate the origination fee and servicing fee,  homeowners could receive additional loan earnings anywhere from $3,500 to $10,000.

“This pricing option will allow seniors who desire to take their loan proceeds in an up-front lump sum to unlock even more of their equity to fund their retirement,” said Craig Corn, vice president at MetLife Bank in charge of the bank’s reverse mortgage business. “Savings will vary by the individual case,” he said, “but senior borrowers can end up with a lot more money in their pockets.”

A reverse mortgage is a FHA-insured product that allows senior homeowners ages 62 or older to borrow against accumulated home equity without having to make regular monthly payments of principal and interest.

For more information: MetLife

NEW YORK, Mar 16, 2010 (BUSINESS WIRE) — MetLife, Inc. (MET 43.35, +0.32, +0.74%) announced today that its life insurance subsidiary, Metropolitan Life Insurance Company, approved an aggregate payment amount of approximately $1.5 billion in policy dividend payments to eligible life insurance policyholders for 2010.

“This dividend payout not only reflects MetLife’s financial strength and stability, but also our commitment to our policyholders, today and for the future,” said Todd Katz, executive vice president of MetLife U.S. Business. “This dividend payout demonstrates that our disciplined practices and focus on the long-term continue to serve our policyholders well.”

Eligible life insurance policyholders include MetLife clients with certain in-force permanent life insurance policies, primarily whole life, and certain term life insurance policies.

Life insurance policy dividends are based on the performance of participating policies, including investment returns, mortality, persistency and expenses, among other factors, and are therefore not guaranteed.

MetLife is a subsidiary of MetLife, Inc. (MET 43.35, +0.32, +0.74%), a leading provider of insurance, employee benefits and financial services with operations throughout the United States and the Latin America, Europe and Asia Pacific regions. Through its subsidiaries and affiliates, MetLife, Inc. reaches more than 70 million customers around the world and MetLife is the largest life insurer in the United States (based on life insurance in-force). The MetLife companies offer life insurance, annuities, auto and home insurance, retail banking and other financial services to individuals, as well as group insurance and retirement & savings products and services to corporations and other institutions. For more information, visit www.metlife.com.

SOURCE: MetLife, Inc.