John Hancock Increases Long Term Care Rates by 90%

[tlmarketing]

So in other words, you have no clue how LTCi blocks are rated or managed.

Thanks for telling me what I already suspected.

Yes bob, that is what this thread is about......how ltc blocks are rated or managed.....

 

[somarco]

after 20 years, claims are just starting to pile in now. Everything up until now has been guess-work by the actuaries.
As previously stated, all of the early actuarial assumptions were wrong.

LTCi, like disability and even workers comp, is long tail business. Sometimes you have no idea how your block is going until it has 10 years or more on the books.

This is especially true with new lines of business.

When AIDS became a concern (about 20 years ago) life and health carriers over-reacted and raised rates more than was necessary.

But then AIDS had the opposite effect on the life settlement business and many marketers that jumped in that business thought AIDS patients would die quickly, leading to higher than expected returns.

AIDS somewhat quickly evolved into a disease that not only could be diagnosed quickly but, in many cases, treated somewhat inexpensively. AIDS patients lived years, sometimes 20+ before the disease finally took them down.

In the last 20 years since LTCi has been around there is more awareness of the product and sales have increased significantly over the early days when premium blocks were much smaller and spread over multiple carriers.

Also during that time people are living longer, spending more time in SNF's or at home.

In other words, the market has changed dramatically in almost every way that can and does impact loss ratio's and in turn, premiums.

The early assumptions were accurate based on data that was known at the time. Historical data led to a complete restructuring of the market and rate basis.

To say the early assumptions were wrong simply fuels the fire for those who are uninformed and clueless about blocks of business, especially health insurance blocks.

 

[Arthur Rudnick]

To say the early assumptions were wrong simply fuels the fire for those who are uninformed and clueless about blocks of business, especially health insurance blocks.

If the actuaries initially assumed their lapse percentage at 8% and the actual lapse rates turned out to be 3%, wouldn't you call that a wrong actuarial assumption?

 

[Crabcake Johnny]

So....we would then assume that John Hancock's current LTCi rates are significantly higher now that they know what's up.

Can anyone run a rate and check? Can anyone here comment on today's Hancock rate based on last years?

 

[Mr_Ed]

So....we would then assume that John Hancock's current LTCi rates are significantly higher now that they know what's up.

Can anyone run a rate and check? Can anyone here comment on today's Hancock rate based on last years?

Here's the $64,000 question:

What do we learn if the current rates are at least 90% higher than the older rates?



talking horse

 

[Crabcake Johnny]

So I guess that's where this thread will die. Since John Hancock now realizes that their old rates were indeed too low, we would expect new business rates to be much higher. Much higher citing their 90% increase in IL and 40% in MD.

Anyone wanna guess at the answer?

 

[Mr_Ed]

So I guess that's where this thread will die. Since John Hancock now realizes that their old rates were indeed too low, we would expect new business rates to be much higher. Much higher citing their 90% increase in IL and 40% in MD.

Anyone wanna guess at the answer?

There's nothing to guess about it.
anyone who's sold LTCi (even just a few policies) over the last 10 years knows that comparable benefits today cost about 100% more than comparable benefits of policies that were sold 7 to 10 years ago.

that's why it is wholly irresponsible (and ignorant) of tlmarketing to tell a consumer who buys a policy today to expect a 60% to 90% increase over his/her lifetime.

current policies already have that "90% increase".

the talking horse.

 

[Arthur Rudnick]

So I guess that's where this thread will die. Since John
Hancock now realizes that their old rates were indeed too low, we would expect new business rates to be much higher. Much higher citing their 90% increase in IL and 40% in MD.

The 90% increase on existing policyholders was only on a small block of business in PA.
The average increase on all policyholders was 40%.

 

[Crabcake Johnny]

That was how I spotted the "also ran" carriers. Low new biz rates, then the rate increase would be 30%+ with an excuse, but check their latest rates and they didn't budget.

 

[Mr_Ed]

The 90% increase on existing policyholders was only on a small block of business in PA.
The average increase on all policyholders was 40%.

99% of my clients did not even get the 40% increase.

By changing their 5% inflation benefit to 4.2% or 3.9% (depending upon the state) they avoided the premium increase completely.

And, they did NOT lose any of the 5% inflation growth that they already had in their policy. The change in the inflation growth did NOT impact the several years of growth their benefits have already experienced.


the talking horse

(I'm the end of the horse that talks.)