John Hancock Increases Long Term Care Rates by 90%

[Arthur Rudnick]

Another view from Terry Savage.......

http://www.dailyfinance.com/2012/03/20/long-term-care-less-an-insurance-nightmare-as-premiums-nearly-d/

 

[Crabcake Johnny]

I think what carriers need to realize this this isn't some McDonalds product like the McPizza that doesn't work so you pull it from the menu.

These, in some cases, are seniors on fixed incomes who have paid into the policy for 10 years, then come to an impossible situation of having to cancel and losing every dime AND obviously no LTC protection or deep into their budget and ante up.

 

[somarco]

Carriers are not obligated to make coverage affordable (whatever that is) and they lack the ability to print money to subsidize losses.

The product is what it is and the market is constantly adjusting and consolidating.

With consolidation, blocks from carriers that underpriced their product is absorbed by larger carriers that may or may not have done likewise.

I know someone has the answer, but there was one LTCi carrier that not only had low rates but was supposedly notorious for writing almost anyone that could fog a mirror. Carrier name escapes me. Wasn't Conseco, but they had their issues too.

Point is, those blocks have been absorbed by someone and the contractual losses must be covered.

Eventually the market should stabilize but until then premiums will rise and carriers will exit the market.

 

[Arthur Rudnick]

I know someone has the answer, but there was one LTCi
carrier that not only had low rates but was supposedly notorious for writing almost anyone that could fog a mirror. Carrier name escapes me. Wasn't Conseco, but they had their issues too.

AIN/Penn treaty?

The product is what it is and the market is constantly adjusting and consolidating.

At the end of the day, the product WILL survive. However, it's no longer for lower to middle income, it moved into the middle income + bracket.

And, if not a LTC policy, what are the alternatives?
(No "Hybrid policies are the answer" please)

 

[tlmarketing]

AIN/Penn treaty?

At the end of the day, the product WILL survive. However, it's no longer for lower to middle income, it moved into the middle income + bracket.

And, if not a LTC policy, what are the alternatives?
(No "Hybrid policies are the answer" please)

That's absolutely right, it is no longer for the middle income group.

The problem is that consumers who planned carefully and thought they were ideal clients for long term care based on the pricing at time of sale.....are screwed because they can't afford it now at current pricing levels..

I wonder how many would have even purchased LTC if it was priced correctly from the beginning?

 

[Mr_Ed]

That's absolutely right, it is no longer for the middle income group.

The problem is that consumers who planned carefully and thought they were ideal clients for long term care based on the pricing at time of sale.....are screwed because they can't afford it now at current pricing levels..

I wonder how many would have even purchased LTC if it was priced correctly from the beginning?

They can either reduce their inflation benefit and keep their premium the same or take the nonforfeiture offer and have a small paid up policy.

 

[Crabcake Johnny]

....or

it's remotely possible this is not an issue that can be handled by private insurance. It may come to pass that affordable coverage cannot be offered to obtain the large client base needed to offset claims.

The more the rates go up, the fewer policy holder carriers will have. It needs to be the exact opposite. They need a very large base of younger healthy people and that will only happens if premiums remain very affordable.

If not, then it's simply a issue that we, as a society, will have to tackle.

 

[Mr_Ed]

....or

it's remotely possible this is not an issue that can be handled by private insurance. It may come to pass that affordable coverage cannot be offered to obtain the large client base needed to offset claims.

The more the rates go up, the fewer policy holder carriers will have. It needs to be the exact opposite. They need a very large base of younger healthy people and that will only happens if premiums remain very affordable.

If not, then it's simply a issue that we, as a society, will have to tackle.

just like the CLASS Act

 

[tlmarketing]

They can either reduce their inflation benefit and keep their premium the same or take the nonforfeiture offer and have a small paid up policy.

So what recommendation would you make if your client received a 90% increase in their john hancock long term care rates....would you:

1. Recommend that they reduce their compound inflation from 5% to 2.7% as John Hancock offered?

2. Would you be concerned about making such a recommendation to reduce compound inflation from 5% to 2.7% if John Hancock's own site shows costs increasing at 3.5% per year?

3. Would you recommend nonforfeiture knowing that the reduced benefit would amount to 1.4 months of nursing home care....when the original policy offered a 4 year benefit?

 

[VolAgent]

just like the CLASS Act

Man, this has to be NADM alter ego.