John Hancock

[Arthur Rudnick]

Rumor has it that Hancock is working on a new policy that will not offer a traditional elimination period. Instead, there will be a choice of deductibles:
$25,000, $50,000 or $100,000.

Thoughts?

 

[Mr_Ed]

Rumor has it that Hancock is working on a new policy that will not offer a traditional elimination period. Instead, there will be a choice of deductibles:
$25,000, $50,000 or $100,000.

Thoughts?

Genworth's Cornerstone Advantage used to have something similar. The deductible was 50x the Daily Benefit.

I appreciate any carrier that is willing to offer something new.

 

[yankee466]

Rumor has it that Hancock is working on a new policy that will not offer a traditional elimination period. Instead, there will be a choice of deductibles:
$25,000, $50,000 or $100,000.

Thoughts?

If the purpose of LTC insurance is to avoid catastrophic loss....then this is certainly an option for some. It would of course have to be a cost effective option. Then again, I have personally never sold a Mutual of Omaha plan with a 365 day elimination period yet....but I imagine others have.

 

[csalter]

Well, on the surface it would seem reasonable since the elimination periods would require one to come out of pocket in many cases. However, I believe that hearing those types of numbers would scare people away from LTCi even more than it does now. People already don't want or feel they need to buy this insurance as it is.

Living in California, it sounds like earthquake insurance. Do you know how many people shy away from that because of the ugly deductible. To hear 90 day elimination period at $7,000 a month is one thing, but to hear $20,000 is another. It just sounds expensive.

Don't they think about what regular people feel and think?

 

[Arthur Rudnick]

previously posted by csalter

Well, on the surface it would seem reasonable since the elimination periods would require one to come out of pocket in many cases. However, I believe that hearing those types of numbers would scare people away from LTCi even more than
it does now. People already don't want or feel they need to buy this insurance as it is.

Living in California, it sounds like earthquake insurance. Do
you know how many people shy away from that because of the ugly deductible. To hear 90 day elimination period at $7,000 a month is one thing, but to hear $20,000 is another. It just sounds expensive. Don't they think about what regular people feel and think?

With premiums as high as they are, this is just another way the carriers are trying to lower the cost. However, I'm not sure this will fly. As mentioned by Mr_Ed, this was tried once before with Genworth a few years ago on their Cornerstone Advantage policy series. Due to lack of sales, it was discontinued.

When you think about it, an elimination period in days is the same thing. With a 90-day elimination period and the cost of care running at $200-$250, the deductible is about $20,000. Some carriers offer a 365 day elimination period and if care were needed, the out-of pocket could run $80,000.

A point to consider is that with a specific deduction, that will always be the amount of your out-of-pocket. It's $50,000 out of pocket regardles of the cost of care. With an elimination period in days, the cost of care in 20 years will be much higher than it is today.

Hanock has a history of innovative policy options. Most have been a little off-the-wall, but you have to give them credit for trying.

Maybe one day they'll get it right.

They will offer deductibles of $25,000-$100,000, which will lower the premium. Keep in mind that insurance is "risk sharing". The more risk on the policyholder, the lower the premiums.

To live in CA without earthquake insurance, or to live near the water without flood insurance (Hello Hurricane Sandy) is a risk that on the surface is not worth taking.

 

[ltcadviser]

Arthur, some carriers have calendar day deductibles; some carriers offer 0 day home care EPs as an inexpensive option and subtract days from the facility waiting period if home care is utilized. A day is thus not always equal to a certain amount of $ exposure. CSALTER is 100 percent correct. A consumer hearing 90 days is different from a consumer hearing $25000 or $50000. Why doesn't John Hancock simply roll out a linked benefit UL policy like Lincoln or Pacific Life. Seems like it would be a better fit for where JH wants to be in this marketplace.

 

[Arthur Rudnick]

previously posted by ltcadviser

Seems like it would be a better fit for where JH wants to be in this marketplace.

Jack,
I'm not sure if Hancock knows where it wants to be in the LTC market.

 

[ltcadviser]

Or if Manulife knows where it wants JH to be.