John Hancock Custom Care 3

[Arthur Rudnick]

New York just approved CC3 and it will be available for sale on 9/19. Software is not yet available, but I'd guess rates are going to be 10%-20% higher than CC2 Enhanced.


CC2 insured to age 84
CC3 insures to age 79

CC2 had a 5% Simple inflation rider
CC3 does not offer a 5% Simple, but they added a CPI to age 75, (making a bogus inflation rider even more bogus)

CC2 allowed for licensed, independent caregivers
CC3 will only allow for independent caregivers if the policyholder lives more than 40 miles from a licensed home health care agency and in that case, will only pay 75% of the benefit

On the Eliminaion Period:
CC2 had 1 Service Day equals 7 days towards satisfying the Elimination Period
CC3 has 1 Service Day equals 1 day toward satisfying the Elimination Period
(I do not believe there's a Calendar-Day option)

CC2 had a Waiver of Elimination Period for Home Care as a rider at 9% additional premium
CC3 has the rider available at 15% additional

CC2 offered a spousal/partner discount if only one spouse/partner applied
CC3 Offers no discount offered unless both spouses/partners apply, are approved and accepted

 

[scagnt83]

What could they possibly be thinking?

That their past assumptions for lapse ratios, benefits usage, & medical inflation were grossly miscalculated.

Its a way to step back from the LTCI industry without "officially" exiting.

They will loose volume, but they will still pick up policies on name recognition; and with the adjusted benefits the new policies will help to hedge the old ones.


No real surprise if you ask me. I would expect to see the same with others as time goes on.

 

[Arthur Rudnick]

"What could they possibly be thinking?"

"That their past assumptions for lapse ratios, benefits usage, & medical inflation were grossly miscalculated".

 

[billberry12]

All I can say is, I am sure glad I don't depend on JH to make a living in the LTCI business. I've said all along they were moving along like Metlife did just before they exited the business. I don't think JH will leave the business, but whatever business they do from this point forward should be profitable for them.

 

[scagnt83]

In all due respect to Hancock, I've been hearing this same BS for years.

If I owned a business and my accountant didn't have a clue as to how figure my costs, I'd fire his ass!

Hancock has been in the LTC business since 1986. One would think that by now, they would know what the heck they were doing and how to price their product correctly.

Who are their actuaries, Larry, Moe & Curly?

OK, I'll give them the benefit of the doubt about not knowing persistency & actual claims for the 1st 20 years,

Yeah, but it seems to be industry wide.

Maybe they knew and were just lowballing to gain business; either way it is not a good thing for the LTCI industry.

Also, medical inflation has grown exponentially over the past 15 years. (and I dont mean just the cost of care, but the amount of care as well)


I heard a month or two ago from one of their top producers that he was told JH would be "dropping out of LTCI"..... I guess the subpar product is how they are doing it.

 

[Arthur Rudnick]

"Yeah, but it seems to be industry wide"

Granted, rate increases are industry-wide. However, I don't recall any carriers that raises rates and at the same time guts their product.

 

[yankee466]

any idea what the USAA and Ameriprise agents are pushing these days if JH is so pricey for everyone? These people must really think CPI is the cat's meow if they try to sell JH at all.


Clark Howard recommends USAA for LTC coverage...which means he knows nothing about LTC since they only send out JH and GNW proposals.

 

[billberry12]

These days it's hard for me to trust any recomendations from well-known names. Seems most of them are recomending for a fee, or percentage of sales. What kind of recomendation is that?

 

[Arthur Rudnick]

As far as I know, USAA is doing Hancock & Genworth and I think Ameriprise is only Genworth.

To the uninformed agents (those who only do a few LTC policies a year, which is where the majority of the business is done) CPI sounds wonderful.

It's substantially less than 5% simple & 5% cmp and that's all those who dabble in LTCi look at.

 

[Trubi]

Don't forget the big issue with Hancock. They now have the entire Federal Program. Remember Met dropped out & Hancock was overjoyed to have 100% of that block???? All of that business, which was under priced was dumped into them & they need to reserve for all of it together with their regular business. Hancock does still have a market. The slightly overweight that will come in standard with them, the 75+ single market and their captive agents