NY Life

[Arthur Rudnick]

Someone (I think it was Bill) asked a couple of weeks ago about a rumor that NY Life was raising their rates. I just read a bulletin that effective 01/01/2012 rates on new policies were increasing an average of 30%. No changes to the actual policy.
Also, they will no longer go through age 85. Top age is now 79.
The largest increases will be at younger ages.

No increase (yet) on existing policy holders.

 

[billberry12]

Thanks Arthur. That was me. Wow! Getting expensive to get this stuff now isn't it.

Bill

 

[Arthur Rudnick]

Getting expensive to get this stuff now isn't it?

Think so?

Why not move up here to NY?
I have a 91 year old aunt that just entered a nursing home in NYC last week. She says "the food is pretty good here"

For $537 a day, they should be serving her filet mignon & caviar 3 times a day.

$150-$200/day policy just doesn't get it, does it?

 

[Guest]

I just read a bulletin that effective 01/01/2012 rates on new policies were increasing an average of 30%. No changes to the actual policy.

You are saying that the 60 year old who bought his policy last December will be paying 30% less than the 60 year old who buys the same policy today (from NYL?)

 

[Arthur Rudnick]

You are saying that the 60 year old who bought his policy last December will be paying 30% less than the 60 year old who buys the same policy today (from NYL?)

You can say that,
Or..............
You can say the 60 year old who bought their policy after 01/01/12 will be paying 30% more for the same policy.

The bulletin says that rate increases will "average 30%". Not sure what that means. It also stated that the larger increases will be for younger applicants. Maybe 40-50 year olds will pay 50% higher rates and those in their 60s+ will see less of an increase. I'm just guessing.

First time in 10 years NYLife increased rates. They were long overdue.

 

[rousemark]

You are saying that the 60 year old who bought his policy last December will be paying 30% less than the 60 year old who buys the same policy today (from NYL?)

probably not.. Most likely they will also raise the premiums on in force policies.

 

[2insureyou]

Most likely they will also raise the premiums on in force policies.

That's quite an assumption to make, based on the information currently available...

From what I've read, they have no intentions of in-force rate increases...

Mass Mutual recently re-priced their product as well. This did not affect existing policyowners, and they do not anticipate being in a position to have to do so. Their balance sheet is still very strong, and NYL's balance sheet is even stronger.

Unless interest rates stay low for more than the projected next two years (which I doubt), AND claims increase substantially above current expectations (which they've likely done some serious soul-searching here, and are reflecting that in NEW policyowners), there is a good chance they will not raise rates on policyowners.

But, who knows? I just think it's quite an assumption to say "they'll likely have an in-force rate increase"

 

[ltcadviser]

I think NY Life will keep in-force rates intact.

 

[Arthur Rudnick]

I think NY Life will keep in-force rates intact.

Please finish your sentence:

"I think NY Life will keep in-force rates intact because......."

Mass Mutual recently re-priced their product as well. This did not affect existing policyowners, and they do not anticipate being in a position to have to do so. Their balance sheet is still very strong, and NYL's balance sheet is even
stronger.

No one is debating the balance sheets of NY Life or Mass Mutual. They are both very strong financial institutions. But, the decision to raise rates on existing LTC policyholders is not based upon the company's financial statement. It will be based on the profitability and claims experience of their LTC divisions.

Only a few years ago, the words "Rate increases on existing policholders" didn't exist (well maybe it did for Conseco & Penn Treaty).

It seems that claims experience & persistency is higher than anticipated and interest rates are lower than expected for every company on the planet. Why would NY Life & Mass Mutual not be faced with the same problems?

 

[BNTRS]

Strong balance sheet or not, they aren't going to risk downgrades over keeping the rates the same, and that's where they head if they start taking losses on their old books. I wonder about Guardian (Berkshire actually) for a while they had a really low priced product, this was actually mentioned in audits of the product, they then did what most everyone else did by rolling out a new product with a much higher price tag, but I can't imagine there is a lot of profitability on that old product book. We know the new product didn't last long before they shut the entire product line down.