Mutual of Omaha Joins The Party

[billberry12]

healthagent, My wife and I purchased our long term care policies when we were in our early 50's, about 10 years ago. If I had waited until now, the premium for the same coverage would cost three times as much. I have since become uninsurable, so LTCI would not be an option now if I had waited.

I have not had any rate increase, but I am positive I will. If my rate has only doubled, when I reach seventy, what they were when I got the plans, I will be a very happy camper. If they triple, I will still feel I have a bargain at age 70.

I don't know exactly what your beef is, but I've been selling LTCI 11 years, and everyone I write a policy for is aware that the rates will more than likely go up. It's just a matter of when and how much? They still see the need for the coverage, because the need is very real.

 

[Arthur Rudnick]

"I don't think the Health Insurance applications have that form do they Arthur? Why do we have it in the LTCI industry, and they don't in the health insurance industry? "

Good question Bill. Maybe because in Health, rate increases are almost automatic and consumers expect them every year. Carriers file, the DOI approves, end of story......

In LTCi, the industry had no increases for years and the consumer fell into a false sense of security (as did agents & brokers). When the sh** hit the fan about 5 years ago, I think it was the carriers that added that form to protect themselves from potential lawsuits from consumer groups claiming that they were mislead into believing that premiums would never go up. Even though it was clealy stated on the first page of the contract.

Just a guess, but I think it's the old....CYA syndrome.


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"...well then I'm only left to assume that you don't understand how insurance agents will explain that away in order to land that commission. Oh wait, agents would never do that.

And, your point is???

 

[Mr_Ed]

Depends on how honest you want to be with your clients. My health clients knew going into the application that rates increase around 12% annually. They knew it was a game of musical chairs.

What are the LTC clients being told? Is a 55 year old under the impression that he'll keep that policy at current rates until he's in his 70's? Or is he being told to expect "X" percent in rate increase so by the time he's 70 he'll likely be paying double the rates.

None of the leading LTC insurers have "doubled" anybody's premiums. gimmeadoublebreak.

All the rate increases are public info. You don't have to make wild accusations about rate increases.

Just go read it for yourself.

The TX DOI website is easiest to read:

Long-Term Care Company Rate Increase Histories


But the CA DOI website is more detailed and thorough:

Long Term Care Insurance Rate History

 

[scagnt83]

Come on scagnt83. I have rate increases on my medical insurance each year. Does that mean the health insurance industry is insolvent? Homeowners and auto go up too. Been doing it long as I can remember, and those industries didn't do down insolvent.

Those industries are nothing like LTC.
The probability of a person maxing out an LTC policy at some point vs. HI is much higher, not to mention the retention rate for HI isnt even half that of LTC. The carriers did not account for these things when pricing the products.... they have admitted this repeatedly.

And the recent rate increases hitting the LTC industry are unheard of!! Has your HI ever increased 30%-50% like JH just did recently?? And some of those policies had just had a rate increase a year or two prior....

 

[GreenSky]

Those industries are nothing like LTC.
The probability of a person maxing out an LTC policy at some point vs. HI is much higher, not to mention the retention rate for HI isnt even half that of LTC. The carriers did not account for these things when pricing the products.... they have admitted this repeatedly.

And the recent rate increases hitting the LTC industry are unheard of!! Has your HI ever increased 30%-50% like JH just did recently?? And some of those policies had just had a rate increase a year or two prior....

Let's see....didn't Anthem in CA ask for a 39% increase last year? Blue Shield increased some of their plans about that recently.

My small group clients have received increases of almost 20% each of the past 2 years.

One LTC plan that pays like a DI is MedAmerica. They have not had a rate increase in 10 years.

How can we explain that?

Rick

 

[scagnt83]

Let's see....didn't Anthem in CA ask for a 39% increase last year? Blue Shield increased some of their plans about that recently.

My small group clients have received increases of almost 20% each of the past 2 years.

One LTC plan that pays like a DI is MedAmerica. They have not had a rate increase in 10 years.

How can we explain that?

Rick

Yes, and the huge HI increases can be attributed to the bureaucracy of government intervention in what was once a free market...... the increases in LTC are due to Actuarial miscalculations...

 

[billberry12]

Have you had your meds today?

 

[scagnt83]

every company requires an applicant's signature advising them that premiums can go up in the future, along with a listing of previous increases by policy series.

And when clients actually pay attention to it they really start to get second thoughts...

JH actually had an 80%-110% on one line of policies in 2005..... not a great selling point
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Have you had your meds today?

Refer to my previous post; if you think increases like that are due to "inflationary measures" instead of actuarial miscalculations your the one that needs the meds buddy

 

[billberry12]

Let's see now, 6 years ago on policies written 10 years before at least. That averages how much per year over 16 years. About the same as health insurance it seems. Like I said, what's your beef?
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It seems your have some ax to grind with LTCI actuaries. Does it really matter why the rate increases were needed. They were needed.You blame the increases for health insurance on government intervention. An increase to the consumers is an increase, whatever the cause.
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Oh, and I do take lots of meds, buddy. They keep me alive.

 

[scagnt83]

Try 8 years.
And one of those policy lines had just received a 30% increase 2 years earlier..... while this is an extreme example, it is not isolated.


I have no axe to grind; I have sold, and do sell, LTC policies.
I think the 10 pay policies are a good product along with MoneyGuard type products.


But anyone who believes that the carriers assumptions were not way off is not listening to the carriers.


I never said LTCI was bad, and the claims paying ability of most all the policies is certainly not in question. But the future landscape and structure of LTCI certainly is in question.


I said the carriers actuarial assumptions were grossly incorrect.
The carriers have admitted this to some extent themselves.
You say it doesnt matter why its increasing at an alarming rate.... well it matters to the future of LTCI!! Why do you think companies are dropping out of the race and pricing themselves out of the race?

And from a retirement planning standpoint, HI & non LTC care is already a big enough wildcard to plan and budget for; how does it make sense for a pre-retiree to purchase an already pricey policy that they are unable to properly budget for on a long term basis... while I dont dispute the need for LTCI, the industry has some very big hurdles to overcome before its a product thats feasible on a larger scale.