Genworth LTC Insurance Changes

[LTC Connection]

Hi all,
We are new to the LTC Insurance Forum. There is a lot of great information here. We wanted to share this information that we learned about yesterday......

Genworth Financial Inc. stated on their 2nd quarter earnings call yesterday
-wants to raise rates on a majority of its older policies by 50% over 5 years and many of the oldest "new generation" LTCI by 25% over 5 years.
-Introduce a new family of LTCI products in 2013 that will require blood tests and other laboratory tests common in life insurance underwriting
-charge different rates for men and women, to reflect gender-related differences in use of LTC services
-eliminate lifetime benefits options
-to incorporate new assumptions about the returns on the investments backing LTC policies.

There are no further details other than this that we know about.

Not good news, but hopefully helpful to be aware of before clients start bringing it up...

Catherine Dove
LTC Connection

 

[Arthur Rudnick]

Thanks for the heads-up..........

The above has been confirmed.

Genworth is presently in the filing stages in all states.

NOT a good thing.

 

[ltcadviser]

Better than asking for 90%.

 

[csalter]

I don't know what this means for me. I know that they Genworth has to raise rates for a whole class of policy holders. However, does that mean all people with a certain policy? Would I be a part of the "new generation" even if my policy is over a year old now?

This seems so unfair to those seniors who are living on a fixed income. I know that in California, our Insurance Commisioner is not as prone to let raise so high. I think 50% over 5 years is a lot. I hope California continues to make sure that insurers are fair.
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Since I am not an insurance guy, I would love to hear how the new prices from the LTC companies with lower prices like Genworth, Mutual of Omaha compare to the higher price companies like New York Life and Northwestern Mutual. Have the prices increased so much that NYL and NWM don't look so expensive anymore?

 

[Arthur Rudnick]

originally posted by csalter

I don't know what this means for me. I know that they Genworth has to raise rates for a whole class of policy holders. However, does that mean all people with a certain policy? Would I be a part of the "new generation" even if my
policy is over a year old now?

This seems so unfair to those seniors who are living on a fixed income. I know that in California, our Insurance
Commisioner is not as prone to let raise so high. I think 50% over 5 years is a lot. I hope California continues to make sure that insurers are fair.
- - -
- - - - - - - - - - - - - - -
Since I am not an insurance guy, I would
love to hear how the new prices from the LTC companies with lower prices like Genworth, Mutual of Omaha compare to the higher price companies like New York Life and
Northwestern Mutual. Have the prices increased so much that NYL and NWM don't look so expensive anymore?

First the insurance company files rate increase requests with each appropriate DOI. It's up to each state's DOI to approve, deny or modify the requests. NY & CA are 2 of the toughest states in allowing approvals as requested.

That by itself, sometimes causes a problem. If a state denies the company's request, then the company can have a potential problem down the road. They are required to maintain mandated Reserves by each state's DOI and if the Reserves are in jeopardy, it's not good for the company, nor the policyholder. That's where you have the potential of carriers exiting a market, leaving future policyholders with less options.

Personally, I don't believe that you should have a concern with receiving a rate increase on a Genworth policy purchased only a year ago. However, if not soon, history says that somewhere down the line you may be hit with one.

Just because a company charges higher premiums does not necessarily mean that they offer a better product. Every few years a company comes out with a new product or reprices their existing one and jacks up the premium. Right now, even with the earlier announced policy changes, a couple in good health will usually still find Genworth or Mutual of Omaha the most competitive product on the market. BUT, that will surely change in the future.

 

[ltcadviser]

I don't know what this means for me. I know that they Genworth has to raise rates for a whole class of policy holders. However, does that mean all people with a certain policy? Would I be a part of the "new generation" even if my policy is over a year old now?

This seems so unfair to those seniors who are living on a fixed income. I know that in California, our Insurance Commisioner is not as prone to let raise so high. I think 50% over 5 years is a lot. I hope California continues to make sure that insurers are fair.
- - - - - - - - - - - - - - - - - -
Since I am not an insurance guy, I would love to hear how the new prices from the LTC companies with lower prices like Genworth, Mutual of Omaha compare to the higher price companies like New York Life and Northwestern Mutual. Have the prices increased so much that NYL and NWM don't look so expensive anymore?

In many states, NY Life's rates are the highest nationwide. (except in California where NY Life is OK) Northwestern are average rates at best. Not inexpensive, but not smoking crack rates like NY Life, either.

 

[bluemarlin08]

So how are you LTC agents going to handle these changes? Do you continue to recommend GE, do you explain the AARP program, are you going to team up with a career GE agent?

 

[billberry12]

I think Genworth has probably laid down the law to their career agents about teaming up with non-AARP brokers to get a deal. I could be wrong. Think about it. The main purpose of the AARP relationship for Genworth, IMHO, is to be in a situation to offer a plan that no one else can offer but them. Partnering with "non- AARP/Genworth Retail agents" would be contradictory to the value of the relationship. And AARP would probably flip out if they found that was happening. That could jeopardize the Genworth/AARP marriage, and could end in a nasty divorce. I just don't think Genworth will allow this to happen.

Of course this is simply my speculation here. None of this is based on facts, but it is food for thought.

To answer your question, I plan to keep doing what I have been doing. Compare all the plans available, find the best value for the prospect and recommend it. What else is there to do?

 

[bluemarlin08]

You could get an AARP number but still must team up with a career agent and split the business, that's what I am doing.

 

[billberry12]

I was not aware that you could get an AARP number. How do you go about doing that? It was my understanding that only Career agents could have AARP numbers.