Arthur Rudnick
Guru
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John Hancock to Re-enter California Individual Long-Term Care Insurance Market
Both policies provide comprehensive coverage for long-term care provided in all settings – such as the home, an assisted living facility, an adult day-care center or a nursing home – as well as care giving and care planning support.
"We are excited for our long-term care insurance to be available again in California," said Marianne Harrison, president, John Hancock Long-Term Care Insurance. "Having these policies available will give advisors and consumers strong options to consider when thinking about this coverage. Both policies provide robust coverage but each has different features that might fit better with consumers’ varied situations."
For example, John Hancock’s California Partnership policy carries the special benefit of Partnership policies which allow individuals who have them and have exhausted the benefits to protect some of their assets from the Medi-Cal spend-down requirements.
Or, a feature of Custom Care III (non-Partnership only), which will be unique in California, is its CPI compound inflation option. This type of inflation, which lessens the cost of the premium compared to that associated with a traditional compound inflation option, links annual benefit increases to the changes in the Consumer Price Index.
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Comments..........
One word on the the "CPI Inflation Option"
Hancock will claim:
1) Depending upon age it's 50% to 75% less expensive than a 5% Compound inflation rider. That's a good thing.
2) With a 5% inflation rider (either Simple or Compound) if the Consumer Price Index went up 2%, the benefits would increase by 5%. But, if the Consumer Price Index went up by 8%, the benefits would lose 3% with the 5% rider.
However, with a CPI rider, if the Consumer Price Index went up 8%, your benefits would increase by 8%. Another good thing.
In reality:
1) Hancock has increased their rates so much, even with the CPI rider, their premiums are higher than other carriers with a 5% compound rider
2) For the past 3 years, the Consumer Price Index has increased an average of 2.2%. However, the Consumer Price Index does not include the cost of LTC services. Those costs are part of the Medical Index, which are separate and normally run 2%-3% higher than the CPI.
So...... Those policyholders with Hancock's CPI option have seen their policy's benefits increase over the past 3 years an average of 2.2%, while the Medical Index, which includes the cost of LTC services has increased by over 5%. THAT'S a bad thing!
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[FONT=Times New Roman,Times New Roman][FONT=Times New Roman,Times New Roman]Both California Partnership and Traditional Policies Will Be Available [/FONT][/FONT]
[FONT=Times New Roman,Times New Roman][FONT=Times New Roman,Times New Roman]BOSTON, MA (Feb 1, 2012) – John Hancock today announced that its individual long-term care insurance would be available in California, beginning February 27, including both its new California Partnership policy and Custom Care III (non-Partnership).
Both policies provide comprehensive coverage for long-term care provided in all settings – such as the home, an assisted living facility, an adult day-care center or a nursing home – as well as care giving and care planning support.
"We are excited for our long-term care insurance to be available again in California," said Marianne Harrison, president, John Hancock Long-Term Care Insurance. "Having these policies available will give advisors and consumers strong options to consider when thinking about this coverage. Both policies provide robust coverage but each has different features that might fit better with consumers’ varied situations."
For example, John Hancock’s California Partnership policy carries the special benefit of Partnership policies which allow individuals who have them and have exhausted the benefits to protect some of their assets from the Medi-Cal spend-down requirements.
Or, a feature of Custom Care III (non-Partnership only), which will be unique in California, is its CPI compound inflation option. This type of inflation, which lessens the cost of the premium compared to that associated with a traditional compound inflation option, links annual benefit increases to the changes in the Consumer Price Index.
_____________________________________________
Comments..........
One word on the the "CPI Inflation Option"
Hancock will claim:
1) Depending upon age it's 50% to 75% less expensive than a 5% Compound inflation rider. That's a good thing.
2) With a 5% inflation rider (either Simple or Compound) if the Consumer Price Index went up 2%, the benefits would increase by 5%. But, if the Consumer Price Index went up by 8%, the benefits would lose 3% with the 5% rider.
However, with a CPI rider, if the Consumer Price Index went up 8%, your benefits would increase by 8%. Another good thing.
In reality:
1) Hancock has increased their rates so much, even with the CPI rider, their premiums are higher than other carriers with a 5% compound rider
2) For the past 3 years, the Consumer Price Index has increased an average of 2.2%. However, the Consumer Price Index does not include the cost of LTC services. Those costs are part of the Medical Index, which are separate and normally run 2%-3% higher than the CPI.
So...... Those policyholders with Hancock's CPI option have seen their policy's benefits increase over the past 3 years an average of 2.2%, while the Medical Index, which includes the cost of LTC services has increased by over 5%. THAT'S a bad thing!
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