Does Genworth Negotiate Changes to Policies in Claim Status

[VolAgent]

Arthur, first rule of contract law. Unless prohibited by law, two consenting parties can agree to anything. If Genworth wants to take the offer, they simply write up the agreement and both parties sign off on it. Is there anything to prevent Genworth agreeing to this?

It is a perfectly valid question to ask claims. And claims is perfectly within their rights to say no.

 

[Arthur Rudnick]

I'm not an attorney, so the only thing I can tell you is what I've seen in my years in the business dealing with LTC insurance contracts.

And, I'm pretty confident in stating that in the history of LTC insurance, "a contract is a contract".

Yes, 2 consenting parties can agree to anything and in this case, the insurance company & the applicant agreed to the terms of the contract.

And, I suppose after the fact (as in this case) the policyholder has the right to ask anything......

And, as you wrote, the insurance company has the right to say "no".

As I stated, in the case we're discussing, the answer is still "no", no matter how many times the question is asked.

Keep in mind that unlike other contracts, (such as business) insurance contracts are regulated and approved by a state's DOI. In no scenario, can a LTC contract be altered without the approval of the DOI. An insurance company cannot change a sentence in a policy with the state's approval.

Bottom line, for what this client wanted, Genworth was the wrong company to go with.

 

[george bolder]

here is why genworth might consider a one time cash settlement of the policy. The insured is 80yrs old. her life expectancy is 10 more yrs. at a rate of 3000 per month they can expect to pay 360,000 dollars to the independent caregiver. supposed the insured is willing to settle the claim for a one time cash payout of 100 thousand dollars. based on her life expectancy of 10 more yrs, this is a good deal for genworth. it is true that the insured might passed away 1yr after receiving the cash settlement and genworth would have payed only 36thousand instead of 100 thousand ... but if the insured lives another 20 yrs then genworth will regret not taking the 100 thousand dollar deal. Everybody knows that the policy does not allow a family member to be the caregiver. we are not talking about that. we're talking about a proposition, and wether or not genworth would consider such a proposition.

 

[Mr_Ed]

here is why genworth might consider a one time cash settlement of the policy. The insured is 80yrs old. her life expectancy is 10 more yrs. at a rate of 3000 per month they can expect to pay 360,000 dollars to the independent caregiver. supposed the insured is willing to settle the claim for a one time cash payout of 100 thousand dollars. based on her life expectancy of 10 more yrs, this is a good deal for genworth. it is true that the insured might passed away 1yr after receiving the cash settlement and genworth would have payed only 36thousand instead of 100 thousand ... but if the insured lives another 20 yrs then genworth will regret not taking the 100 thousand dollar deal. Everybody knows that the policy does not allow a family member to be the caregiver. we are not talking about that. we're talking about a proposition, and wether or not genworth would consider such a proposition.

George,

No insurance company would consider such a proposition. This is not a life insurance policy. You're not going to get a viatical settlement out of an LTCi policy.

A cash settlement like this would:

1) probably violate the insurance laws of the state in which the policy was written.

2) would set a precedent for similar settlements in the future, which would essentially

3) make null and void every actuarial model and reserving methodology for every LTCi policy ever written.


In order for a "lump sum settlement" to become part of an LTCi policy claim would require A LOT more in premium because they would need to set aside a lot more in reserves.

The only policies that would pay a lump sum like you're wanting are critical illness policies or life insurance policies with accelerated death benefit riders.

 

[CALTCAgent]

here is why genworth might consider a one time cash settlement of the policy. The insured is 80yrs old. her life expectancy is 10 more yrs. at a rate of 3000 per month they can expect to pay 360,000 dollars to the independent caregiver. supposed the insured is willing to settle the claim for a one time cash payout of 100 thousand dollars. based on her life expectancy of 10 more yrs, this is a good deal for genworth. it is true that the insured might passed away 1yr after receiving the cash settlement and genworth would have payed only 36thousand instead of 100 thousand ... but if the insured lives another 20 yrs then genworth will regret not taking the 100 thousand dollar deal. Everybody knows that the policy does not allow a family member to be the caregiver. we are not talking about that. we're talking about a proposition, and wether or not genworth would consider such a proposition.

What life expectancy table are you using to get 10 more years?

I'd say the deal you propose is bad for the insurance company.

Factor in having that 100K available to invest over those 10 years, rather than giving it away in a lump sum.

 

[Arthur Rudnick]

George,
This has nothing to do with your proposal, but are you saying that this lady has a lifetime benefit period at $3,000/month?

If that's the case, in my opinion it's a poorly designed policy.
I'm not sure which state she lives in and therefore I'm not sure of the cost of care however, a smarter policy would be one with a monthly benefit of $5,000 and a benefit period of 6-8 years.

The premium would probably be about the same and her coverage would be more meaningful.

And, CALTCAgent is correct. Someone @ 80 years old, in a care situation does not have a life expectancy of 10 years. Possibly someone in excellent health might, but most people at 80 are rarely in excellent health.

You keep coming back with justifications for your various proposals, in spite of the fact neither Genworth nor any other LTC carrier on the planet will re-negotiate their contract.

Where did you get your Health license from, through mail-order? This is just basic LTC-101 stuff that every licensed agent should be aware of.

With that being said, if you still believe that your proposal is "Just a GREAT deal that Genworth would be foolish not to consider", and if you're the agent of record on this policy, why not save a lot of time and further embarrassment and call the claims department at Genworth and run your proposal by them.

Unfortunately, no one on this forum is able to change the terms of the policy for you.

 

[george bolder]

ok thanks .! I will call genworth and report back.

 

[[email protected]]

Have never read of a case where an insurer altered/amended the issued contract unless a claim was in dispute - being denied and a settlement was made. Otherwise the precendet set could be very costly for Genworth and the industry.

Genworth is paying the claim so there is no basis for a complaint to be filed because she wants her daughter paid rather than use an agency/person approved by Genworth when the contract is clear.

Have you looked at Genworth's financials - doubt they want to write any check before they must so even if they could and wanted to - it appears to me as if their cash flow problems might stop them. Besides, playig God is not for me so all I figure is she lives day to day and none of us has a guarantee of how long we will live...she may die tonight...

Finally, hate to bring this up but George hope your notes show that you were clear in explaining to her what is required to be eligible to file and receive benefits.

The only complaint I see as possible is against you for not explaining the how, when, where & why of being reimbursed
for expenses...

Happy Weekend,

MALinehan

 

[djs]

In a former life, when I worked with large contracts, I was taught that the contract is good for today, can always be renegotiated tomorrow. Renegotiations can be tough though, the other party doesn't have to agree.

Bottom line, it doesn't hurt to make a proposal to Genworth. What's the worse that could happen? They say no. In that case, the family member signs up with a home health care agency and works that route.

Absolutely nothing wrong with asking.

Heck, millions of homebuyers are working to renegotiate their mortgage contracts, why not a LTC contract????

Dan

 

[bluemarlin08]

Call Genworth and ask rather than ask a forum their opinion.