John Hancock Increases Long Term Care Rates by 90%

[Mr_Ed]

Man, this has to be NADM alter ego.

I haven't laughed so hard in a long time.

 

[billberry12]

tlmarketing,

I would do #2, and be glad I had some coverage.
Bill

 

[Mr_Ed]

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?

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

Absolutely. That is a great option. They do NOT lose the 5% growth they've had over the past 10+ years. The only thing that changes is that from the next policy anniversary the benefits would by 2.7%. All of the previous 5% compounded growth remains in their policy.




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?


Not at all. Their policies have been growing at 5% compounded growth for over 10 years. Hence, their policies have grown faster than the actual rate of the cost of care. In other words, they have MORE coverage now than they did when they purchased the policy, compared to the cost of care then versus the cost of care now; reducing the inflation benefit is perfectly reasonable.



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?


I'm not sure how you calculated "1.4 months of nursing home care". The policy's maximum benefit would be reduced to the sum of premiums paid. But, that option rarely makes sense especially since it makes a lot of sense to just reduce the inflationi benefit to 2.7%.


nadm's alter ego.

 

[Arthur Rudnick]

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.

When LTCi first took off in the mid-90s, the average age of new policyholders was 68 years old. Today, the average age is about 56.

If you do proposals for a couple in their mid 50s, you will find that premiums are fairly affordable.

 

[GreenSky]

My LTC is a Met Life group plan through Disney. Just was given notice that subject to regulatory approval, we should expect a 45% increase January 2014.

It's SO cheap even with the increase it's a great deal.

The actual increase percentage should not be the total issue. The price in comparison with other carriers is a bigger issue.

Rick

 

[Mr_Ed]

My LTC is a Met Life group plan through Disney. Just was given notice that subject to regulatory approval, we should expect a 45% increase January 2014.

It's SO cheap even with the increase it's a great deal.

The actual increase percentage should not be the total issue. The price in comparison with other carriers is a bigger issue.

Rick

voice of reason, as always.

 

[GreenSky]

voice of reason, as always.

You must be new around here.

Rick

 

[somarco]

Arthur, Penn Treaty was the carrier I could not recall.

Probably having a senior moment.

Two more ADL's to go . . .

 

[Arthur Rudnick]

Probably having a senior moment.
Two more ADL's to go . . .

I hope one is not changing your diapers..............

 

[bluemarlin08]

So who will be next? Hancock took cases others rejected, as did Penn Treaty, what do you think Mutual Of Omaha will be doing soon because they are now the dumping ground for borderline cases.