John Hancock Increases Long Term Care Rates by 90%

[Bob_The_Insurance_Guy]

Even tho this does not surprise me, or effect me, IT ANGERS THE STUFFIN' OUT OF ME. Last Co. that I wrote biz for I was captive. LTC was their lead marketing product. They provided leads, so guess what I sold.

I did not beleive at the rates that we were charging then
that the biz was sustainable. One rainy aft. sat in a house while man and wife argued loudly over it. Sat there to watch, ultimately wrote one, one refused. Once I left with the one app, inside the house got noisy before I reached my car, no surprise, either.

One day asked my Dist Mgr how long it took to get off advances. He did'nt have a clue, he'd been there 5 years, and still on it he said. That sugg ested the drop rate was also high.

Today, I see that co.'s logo on website, I move on immediately! Irregardless of any other co,s offered! It does make a statement, ladies and gentlemen.

SellinMachine,

This has nothing to do with the topic; however, may I suggest www.toastmasters.org

 

[tlmarketing]

Care to guess what happens if the increase is denied?



You are kidding, right?

Increasing Premiums on Term Life Insurance Policy, Estate Planning, Retirement, Fraud - AARP



Misled? How so?

Do you think the carriers intentionally pulled a bait and switch because they knew it would result in a lot of positive PR?

Your statement is completely out of touch.



And you can prove this how?



For starters, you can't compare health insurance actuarial projections to life insurance.

Secondly, you must not be aware of the history of some life carriers that made:

- dividend projections that did not meet final results
- cash value (UL) that did not meet projections
- sales based on disappearing premiums
- sales based on income tax considerations such as the 4 of 7 rule

I could go on but clearly you need to understand more about the industry before you go running off your mouth.

Or in this case, your keyboard.

ooh...sounds like this touched a nerve....are your renewals based on the new higher premiums your clients now pay???

bottom line is the insurance companies screwed up by either making mistakes or intentionally under pricing in order to drive sales...
- - - - - - - - - - - - - - - - - -

If you wanted to bring a class action against an insurance company for raising their rates due to bad assumptions, you'd have to bring a class action suit against every LTCi carrier on the planet.

Every company claims their rate increases are justified.
Their 4 main excuses are:
1) Policyholders are not dropping their policies as expected.
When this business started back in the early 1980s, it was a brand new product with no actuarial history. Actuaries looked at Medicare Supplementals for their statistics and saw that 8% of all policyholders dropped thier coverage. So, they used an 8% lapse rate.

The problem is that the actual lapse rate was much less @3%-4%. Carriers like nothing more than having a policyholder pay premiums for 10 years and lapse their coverage without the company paying claims. The difference of that 4%-5% cost the carriers a fortune of unexpected claims.

2) Second on the list is that policyholders are going on claim sooner, younger & longer than anticipated. People are living longer and therefore spending more time in a LTC situation. (Which, actually shows you the value of a LTC policy)

3) Third up is the unanticipated lower interest rates. The company's reserves are sitting in accounts earning substantially lower interest than anticipated.

4) And finally, certain benefits of a policy were also based on false assumptions. It turns out that the costs for inflation riders, particullarly the 5% compound was way underpriced as was the lifetime/unlimited benefit option.

These 4 reasons are carbon copy for every company's bulletins to both agents and policyholders as to why these increases are justified.

Eventually they will get it right. Let's just hope when they do, it will be priced where it's affordable.

As far as #3 is concerned, John Hancock stated "our decision to increase premiums on certain policies is solely related to the future claims anticipated on these policies and not to the recent recession, interest rate environment, or any other investment related reason."

 

[sellinmachine]

Bob, I always accept and appreciate constructive criticism. Thank you!

 

[Mr_Ed]

tlmarketing,

you posted to a consumer who visited this board yesterday to expect a 60% to 90% premium increase on the policy he is planning on purchasing soon.

that is an outlandish, ignorant, and irresponsible statement.

i've sent you a private message and also publicly asked you to give one reason why he should expect a 60% to 90% increase on his premium. you haven't answered.

I am asking you again:

Why do you think a policy purchased today is likely to have a 60% to 90% premium increase? please give one reason why he can expect a 60% to 90% increase in his premium.

If you can't give one good reason, then delete your post.





Originally Posted by tlmarketing
Make sure you factor big premium increases into your budget for the future....60-90% maybe a good reference point for increases.

 

[somarco]

are your renewals based on the new higher premiums your clients now pay???

Nope, I don't sell LTCi.

Just offering an INFORMED contribution not one based on ignorance or emotion.

bottom line is the insurance companies screwed up by either making mistakes or intentionally under pricing in order to drive sales...

Perhaps this business isn't for you.

 

[xrac]

20%-90% increase..... OUCH!!!!!!!!!!!

The higher increases are for the compound inflation riders.

Links (Al, the articles give rate examples)

How is a 90% long-term care rate hike OK? - Chicago Sun-Times

Long-term-care insurance may go way of the dinosaur - InvestmentNews.

Minnesota seniors facing a spike in long-term care cost | StarTribune.com



Genworth is asking for an 18% increase in most states...

2012 premiums are up an average of 10% over 2011.

LTCI is not looking good these days.

Dropouts are:
Met
Pru
Allianz
Unum
Guardian
CNA
who am I leaving out??
who will be next????

Sounds like Long Term Care Insurance is going the way of the Doh Doh or the Passenger Pigeon

 

[Crabcake Johnny]

tlmarketing,

you posted to a consumer who visited this board yesterday to expect a 60% to 90% premium increase on the policy he is planning on purchasing soon.

that is an outlandish, ignorant, and irresponsible statement.

i've sent you a private message and also publicly asked you to give one reason why he should expect a 60% to 90% increase on his premium. you haven't answered.

I am asking you again:

Why do you think a policy purchased today is likely to have a 60% to 90% premium increase? please give one reason why he can expect a 60% to 90% increase in his premium.

If you can't give one good reason, then delete your post.





Originally Posted by tlmarketing
Make sure you factor big premium increases into your budget for the future....60-90% maybe a good reference point for increases.

Do you feel it's a client's right to know what's been happening to the industry in general over the past few years?

 

[Mr_Ed]

Do you feel it's a client's right to know what's been happening to the industry in general over the past few years?

Of course.
That's not what tlm posted.

 

[Crabcake Johnny]

I agree and would never tell a client to "expect" a 60% increase. That said, it's absolutely true that not only is the industry is a bit of turmoil, but a few carriers themselves have stated that it's a new market and basically "figuring all of this out" is a bit of a challenge.

In a way, LTCi clients are guinea pigs. And just like guinea pigs, some experiments go great - some not so great.

 

[rousemark]

I am hard pressed to believe that it has taken them over 20 years to spot the utilization and lapse rate trends in this product.