Another Major LTC Player Making Sweeping Changes

[scagnt83]

Besides, a 100 billion dollar A+ company is hardly safe"

Exactly. This is what the coolaid drinkers just dont fully grasp. And what indy agents are so quick to jump on. Having worked at NYL as a career agent, it makes me sick thinking back to some of the things said (even by regional VPs and national VPs) about perfectly fine competitors.

When career agents imply that it is somehow "unsafe" to have a policy with a competitor, or that their company is "the most likely to pay out", etc etc, that is what most indy agents take exception to.
How can you call an investment grade rating "unsafe"? How can you call most any insurance guarantee unsafe considering the reserve requirements and the SGA backing?? Even if the original company isnt there, your policy and benefits most likely still will be.

 

[ltcadviser]

In taking a neutral position, what Genworth is doing should not be a big surprise.

There are only a few major players left and most (with some exceptions) are competitively priced, for basically the same product.

However over the years, history tells us that there always seems to be one company "under-priced".

Every 3-4 years carriers pull their products off the market and replaces them with the same policies, but with a few minor changes. That gives them the opportunity to raise their rates on new products. Everytime that happens, there's usually a 15%-30% rate increase. Over the past 8 years, some companies have done that more than once.

I recall Unum, (who had the only cash-benefit policy on the market at the time) they always seemed to charge less than most reimbursement policies. Over the previous 3-4 years, Unum never had a rate increase but other carriers did. That led me to believe that for the product they were offering, (which was better than any other policy) they appeared to be "under-priced" and I felt the actuaries were probably headed back to the table to discuss a new policy at higher rates.

One of the few good moves that I've done was to buy a Unum, cash-benefit policy for my wife and myself. And what do you know? A few months later, Unum requested a 30% increase in every state.

The funny thing is, (thank you NYS DOI) NY refused the entire rate increase!

So, I'm sitting with a policy that I bought about 8 years ago and it's priced so low, it's an embarrassment to tell people my benefits and premium.

Genworth determined that it was time to look for a rate increase. Thankfully, it's also not on existing policyholders, we've already seen enough of that.

I guess they took the middle grounds (like others have recently) and reduced comp, limited benefits: no more lifetime benefit, no more Preferred Health rate, no 10-pay (although I don't see the downside for a company getting a lot higher premium in a much shorter period of time) and they also reduced their partner discount.

And, don't forget they tightened up on their underwriting.
That's also a big thing.

Personally, I think what Genworth is doing is a smart move.

I'm not sure if this is something we'll start to see more often, but Genworth has some pretty smart people running the company and I would guess they have a pretty good view of the LTC landscape. Other carriers see it as well.

It's going to be an interesting next few years in the industry.

Arthur, wasn't UNUM an indemnity policy and not a cash policy?

 

[billberry12]

Just in case anyone cares, Genworth's new changes only effect the Genworth product. It does not effect the AARP My future My Plan polices, which is what the Career agents sell. So the career AARP agents still have the price/benefit advantage (for now). I feel sure next year we will see more expensive AARP plans to match the new Genworth product, if Genworth can get the"powers that be" at AARP to approve the contracts.

 

[ltcadviser]

Just in case anyone cares, Genworth's new changes only effect the Genworth product. It does not effect the AARP My future My Plan polices, which is what the Career agents sell. So the career AARP agents still have the price/benefit advantage (for now). I feel sure next year we will see more expensive AARP plans to match the new Genworth product, if Genworth can get the"powers that be" at AARP to approve the contracts.

Oh, you have to be effin kidding me.

 

[bluemarlin08]

That's correct, however, if you are part of the ambassador program you can sell the AARP product but have to apply for a special code from Genworth, I did this yesterday.

 

[ltcadviser]

That's correct, however, if you are part of the ambassador program you can sell the AARP product but have to apply for a special code from Genworth, I did this yesterday.

What is the ambassador program?

 

[bluemarlin08]

It's a program where you are licensed through a career agent.

 

[CALTCAgent]

It's a program where you are licensed through a career agent.

So he gets an override?

How much less is the comp versus independent?

 

[Arthur Rudnick]

Arthur, wasn't UNUM an indemnity policy and not a cash policy?

Unum had a policy named "Total Home Care". It was a cash-benefit and paid on an indemnity basis.

Same as Simplicity except:
Simplicity pays cash for all levels of service, Unum pays cash only for home care. (Like Pru's cash benefit option)

Unum pays at the end of the month and Simplicity pays on the 1st of the month.

At the same time, Unum also had their reimbursement policy.

 

[ikeman07]

So.... cutting discounts/benefits and lowering your commissions. Man, when I'm wrong i guess I'm wrong. Here I thought Genworth was crazy for their pricing structure and didn't see how it was plausible for them to continue as they were... but you all were correct in calling me stupid for such a crazy assessment. I mean they have 60% of the market and have to be just killing it... unless they didn't price correctly in the first place? Either way, I have learned a valuable lesson in that you guys are way smarter than me about this stuff.

Enough said!!!!!!!!!