Prudential Rate Adjustments

[Arthur Rudnick]

Looks like Pru has finally joined the party.
This was just announced yesterday:

Pru will be filing to adjust their rates on their current LTC3 product going forward. They will also be filing for rate increases on their original ILTC1 series and their last series, LTC By Design. Additionally, they will be removing a few benefit options and adding a few. Below are the details of what's being filed for their LTC3 product:

5% Cmpd inflation rider - 40% increase
5% Cmpd 2x rider - 22% increase
3% Cmpd rider - 11% increase
5% Simple rider - 16% increase
Both GPO and No Inflation will remain the same
90 day elim period will increase by 6%
30 day elim period will increase by 9%
2 & 3yr benefit periods will remain the same
All higher benefit periods will increase by 9%
The 150% home care rider will increase by 21%


They will be discontinuing the offering of the following on their LTC3 product:

No more full cash benefit rider
No more flex cash rider
No more Lifetime (Unlimited) benefit period - max will be 10 years
These above changes will take on April 6th.

They will be adding the following to their LTC3 portfolio:

1 year benefit period in the states that will allow it
2% and 4% Compound inflation options

The increase they're filing on their first generation product (ILTC1) will average 23%. 18% on reimbursement plans and 32% on cash plans

The increase they're filing on their last product, LTC By Design, will average 18%. 15% on reimbursement plans and 30% on cash plans

 

[billberry12]

Re: Prudential

Well, that's about all them now isn't it?

 

[Arthur Rudnick]

Re: Prudential

There's still a few who have never raised rates on existing policyholders.
In NY, there's:
MedAmerica
NY Life
Transamerica
NW
Mass Mutual
Guardian (on the way out)
Mutual of Omaha
State Farm

 

[Fisher]

Re: Prudential

Whatever happened with Hancock raising their rates 40%? I recall hearing about that around September of last year but never saw any news about it actually happening.

 

[Arthur Rudnick]

Re: Prudential

They filed for a rate increase in September, 2010. They never offically posted any specific rate increase %. Not sure where the 40% number came from. You never heard it from them.

 

[Fisher]

Re: Prudential

They filed for a rate increase in September, 2010. They never offically posted any specific rate increase %. Not sure where the 40% number came from. You never heard it from them.

As I recall it was from an article in National Underwriters, Arthur.

So was the increase ever actually implemented? I have a client with an LTCi product from JH and we've been watching for an increase announcement but to date have seen nothing.

 

[Arthur Rudnick]

Re: Prudential

In November, the NY Times ran an article on LTCi that mentioned MetLife was leaving the business and talked about rates being increased for Met, Genworth & Hancock. The article claimed that Hancock was asking for an increase of up to 80% with an average of 40% on existing policyholders. I believe that's where the 40% number came from. It never came from Hancock.

Hancock filed for an increase in September and as far as I know, to date nothing has been approved. Each state's DOI must review the request and make a decision on whether to approve an increase and if so, how much. I highly doubt any state will approve an increase that high.

NY's DOI takes the most time for approval and I'm guessing it will be at least 24 months before a decision will be made. We're still waiting for them to make a decison on UNUM's filing of 30% in May, 08.

 

[Mr_Ed]

Re: Prudential

As I recall it was from an article in National Underwriters, Arthur.

So was the increase ever actually implemented? I have a client with an LTCi product from JH and we've been watching for an increase announcement but to date have seen nothing.

The 40% was an "average".

Some of their policyholders will not get any premium increase at all. I had one of my clients call me up and say that she had gotten 3 phone calls from agents in her town telling her to dump her JH policy because she was going to get a rate increase of 40%. One of the agents even came into her office and gave her a copy of the article that "proved" she was going to get a 40% rate increase.

She called me and asked me what to do. I explained to her that:

1) JH was not requesting rate increases on ANY one who has her policy series. She was surprised to hear that.

2) JH is not requesting and has never requested any premium increases on ANY policy they've sold that has her type of inflation benefit. She was very surprised to hear that.


Fisher,

How long ago did your client buy the policy?
What inflation benefit is in it?

 

[Fisher]

Re: Prudential

Thanks for the info guys.

Fisher,

How long ago did your client buy the policy?
What inflation benefit is in it?

I haven't laid eyes on the actual policy, Nadm. I'm just aware that he has it.

 

[Mr_Ed]

Re: Prudential

Thanks for the info guys.



I haven't laid eyes on the actual policy, Nadm. I'm just aware that he has it.

If he has a Leading Edge policy, he won't get any premium increase.

If he bought a Custom Care policy between 2003 and 2007 he'll probably get a 22% increase.

If he bought a CC policy between 2007 and 2008, he'll probably get a 17% increase.

If he bought it 2009 or after, there should be no increase.

And, again, if it's a Leading Edge policy, regardless of when it was purchased, there won't be any increase.


sao