John Hancock Increases Long Term Care Rates by 90%

[scagnt83]

Where is Scott to tell us we are full of it and that everything is just fine in LTC land?

From his activity and interest in the "agent got arrested for selling annuity"; I think he has droppd LTCI and moved over to Annuities.... lol
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Thanks for the links....I dont understand how a state insurance department can allow a 90% increase in premiums in one year.

If the company can prove that its actuarialy (is that a word?) needed, then its legal.

They are allowed to raise rates to remain solvent on that block of business.

The Feds low rates are not helping the LTCI industry at all. And honestly imo are a large part of all of LTCIs troubles.

 

[VolAgent]

From his activity and interest in the "agent got arrested for selling annuity"; I think he has droppd LTCI and moved over to Annuities.... lol

He's probably planning to get into annuities once LTCi collapses and he's pissed that Glenn seems to be ruining annuities for other agents.

 

[tlmarketing]

From his activity and interest in the "agent got arrested for selling annuity"; I think he has droppd LTCI and moved over to Annuities.... lol
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If the company can prove that its actuarialy (is that a word?) needed, then its legal.



They are allowed to raise rates to remain solvent on that block of business.

The Feds low rates are not helping the LTCI industry at all. And honestly imo are a large part of all of LTCIs troubles.

So wouldn't there be an opportunity for class action type suits that attack the underwriting practices and pricing assumptions made by john hancock?

They have said that they were wrong with their assumptions, pricing, etc....if they had priced correctly from the beginning, their premiums would have been higher, and more consumers might have passed on buying....saving thousands in premiums..

 

[Crabcake Johnny]

Class action suits? So the law firm gets $560 Million and each class member get a checks for $15.60?

 

[tlmarketing]

Class action because the reality is that individual consumers cant take on John Hancock as JH would put the financial hurt on them....Consumers are misled by ltc companies promising benefits based on a price and yes everyone knows rates can change, but to increase 90% should be criminal.

 

[Crabcake Johnny]

Wanna know what would put a financial hurt on them? If their agents grew a set of balls and stopped writing for companies that pulled this kind of crap.

 

[Norwayguy]

Anyone know if/how this effects people purchasing via the Federal LTC program for Federal employees there is a company called LTC Partners and was a partnership between John Hancock and 1 other carrier I know on renewal the other carrier dropped out and John Hancock is all that's left.

 

[Mr_Ed]

Anyone know if/how this effects people purchasing via the Federal LTC program for Federal employees there is a company called LTC Partners and was a partnership between John Hancock and 1 other carrier I know on renewal the other carrier dropped out and John Hancock is all that's left.

no effect.

it's a completely different policy.

 

[sellinmachine]

Wanna know what would put a financial hurt on them? If their agents grew a set of balls and stopped writing for companies that pulled this kind of crap.

Amen to this!!

footnote; I always wanted to get every salesman regardless of product to put away their pens for 72 hours just to prove to public and corp. that we were necessary, rather than a necessary evil.

 

[Arthur Rudnick]

So wouldn't there be an opportunity for class action type suits that attack the underwriting practices and pricing assumptions made by john hancock?

They have said that they were wrong with their assumptions, pricing, etc....if they had priced correctly from the beginning, their premiums would have been higher, and more consumers might have passed on buying....saving thousands in premiums..

If you wanted to bring a class action against an insurance company for raising their rates due to bad assumptions, you'd have to bring a class action suit against every LTCi carrier on the planet.

Every company claims their rate increases are justified.
Their 4 main excuses are:
1) Policyholders are not dropping their policies as expected.
When this business started back in the early 1980s, it was a brand new product with no actuarial history. Actuaries looked at Medicare Supplementals for their statistics and saw that 8% of all policyholders dropped thier coverage. So, they used an 8% lapse rate.

The problem is that the actual lapse rate was much less @3%-4%. Carriers like nothing more than having a policyholder pay premiums for 10 years and lapse their coverage without the company paying claims. The difference of that 4%-5% cost the carriers a fortune of unexpected claims.

2) Second on the list is that policyholders are going on claim sooner, younger & longer than anticipated. People are living longer and therefore spending more time in a LTC situation. (Which, actually shows you the value of a LTC policy)

3) Third up is the unanticipated lower interest rates. The company's reserves are sitting in accounts earning substantially lower interest than anticipated.

4) And finally, certain benefits of a policy were also based on false assumptions. It turns out that the costs for inflation riders, particullarly the 5% compound was way underpriced as was the lifetime/unlimited benefit option.

These 4 reasons are carbon copy for every company's bulletins to both agents and policyholders as to why these increases are justified.

Eventually they will get it right. Let's just hope when they do, it will be priced where it's affordable.