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Another LTC Insurer (Conseco) quits the business
Old 12-03-2008, 06:13 PM   #1
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Another LTC Insurer (Conseco) quits the business

The article is here.

Snippets:
" Conseco Inc. officials have said the transfer of many of the insurers' long-term care policies to a new state-supervised nonprofit trust, Senior Health Insurance Co. of Pennsylvania, allows it to concentrate on its core businesses. The policies were a drag on the company's earnings because they were underpriced and required continuing capital infusions to meet the long-term needs of policyholders."

and

"Frank Darras, an Ontario, Calif., attorney who represents policy owners in disputes with insurers, calls the Conseco spinoff "unfounded, unfair and unprecedented. This company took the premiums and promised them independent living in their golden years, and they have kicked them to the curb. The trust can't survive. It is on the ventilator right now."
************************************************** **

- We've exchanged ideas before about the immaturity of this business/product line. It won't be surprising if other companies decide that at least some of their LTC policies are no longer profitable and dump them on the state insurance pools. Holders of those policies will face increase premiums or reduced benefits.

- It does make it hard to know what to do. In our case, we can't afford to self-insure for all LTC eventualities, but buying insurance and then having the company change the rules 20, 30 or 40 years down the line doesn't sound appealing, either.

- The article gives some tips on how a propsective policyholder can investigate the financial soundness of an insurance company. But really, can the average Joe or Jane make sense of the finacial statements of these firms? And is their condition today any real reflection of whether they'll still be managed responsibly for the next four decades?

Luckily, a similar thing could NEVER happen to annuities or other insurance company promises . . .
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Old 12-03-2008, 06:50 PM   #2
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Conseco is run by a bunch of crooks. Nothing those thieving a**holes would do to their customers to make a nickel would ever surprise me.
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Old 12-03-2008, 06:54 PM   #3
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Look at Genworth, formerly the Cadillac of LTC policy writers. Closed today at $1.43.

Ha
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Old 12-03-2008, 06:55 PM   #4
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Quote:
Originally Posted by samclem View Post
The article gives some tips on how a propsective policyholder can investigate the financial soundness of an insurance company. But really, can the average Joe or Jane make sense of the finacial statements of these firms? And is their condition today any real reflection of whether they'll still be managed responsibly for the next four decades?
Luckily, a similar thing could NEVER happen to annuities or other insurance company promises . . .
How long has it been since Conseco's last bankruptcy? And when are they holding their next one?
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Old 12-04-2008, 01:21 AM   #5
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HEY!, Westernskies--one of my daughters worked for Conseco back in 2000, and she agrees with you entirely!
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Old 12-04-2008, 04:35 AM   #6
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I do not trust Conseco in any way for anything. I would never buy anything from them or any subsidiary of them.


The Federal Government needs to step in an regulate the LTC industry and set fairly strict guidelines. Companies need to make a profit... but they should not be able to walk away from those contracts and obligations... even in bankruptcy... those policies need to be first in line.


When it comes to LTC, if a company exits the market... you need to consider your options. If it is financially feasible, I would shop for another insurer. I suspect the dwindling pool of residual policyholder will experience increased premiums just because the risk winds up spread over fewer people.
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Old 12-04-2008, 07:11 AM   #7
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i think the only fair option is for all the policy holders at the minimum to have their premiums returned plus interest. at most have the regulators force Conseco to honor their promises
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Old 12-04-2008, 07:37 AM   #8
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Quote:
Originally Posted by haha View Post
Look at Genworth, formerly the Cadillac of LTC policy writers. Closed today at $1.43.

Ha
Gulp

I purchased a Genworth LTC policy for me & DW a little over 2 yrs ago. Would anyone care to comment as to the prospects of Genworth's survival, spin off of their LTHC or whether I should continue to pay my annual policy?:confused:

Would you cut your losses and look for a better(?) LTC company:confused:
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Old 12-04-2008, 07:42 AM   #9
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i'd be wary of trusting anyone that wants you to pay money up front in exchange for a promise to pay for very expensive care later on
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Old 12-04-2008, 08:47 AM   #10
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I was offered LTC as a new group employee benefit last year. On one hand it was tempting to lock in insurability (no POI required if you signed up when first offered), but on the other hand, it's awfully costly, benefits are changing on these products and there's a lot of counterparty risk. It would have been nearly $200 a month for the two of us for the inflation-adjusted LTC benefit (we're 43 and 40) with very little chance we'd need it before age 60.

I also don't really trust the long-term solvency and sustainability of the products, because I'm not convinced insurers really know how to price them properly yet.
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Old 12-04-2008, 09:24 AM   #11
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Quote:
Originally Posted by Fastfade View Post
Gulp

I purchased a Genworth LTC policy for me & DW a little over 2 yrs ago. Would anyone care to comment as to the prospects of Genworth's survival, spin off of their LTHC or whether I should continue to pay my annual policy?:confused:

Would you cut your losses and look for a better(?) LTC company:confused:
Look at Northwestern Mutual for LTC. They're the only ones I trust right now in the market.........
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Old 12-04-2008, 09:27 AM   #12
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Weiss Ratings: Strongest and Weakest Long-Term Care Insurers
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"Hey, for every ten dollars, that's another hour that I have to be in the work place. That's an hour of my life. And my life is a very finite thing. I have only 'x' number of hours left before I'm dead. So how do I want to use these hours of my life? Do I want to use them just spending it on more crap and more stuff, or do I want to start getting a handle on it and using my life more intelligently?" -- Joe Dominguez (1938 - 1997)

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Old 12-04-2008, 09:49 AM   #13
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Originally Posted by haha View Post
Look at Genworth, formerly the Cadillac of LTC policy writers. Closed today at $1.43.

Ha
You should clarify that there is a huge difference between the investment value of an insurance company and their ability to pay claims.

Genworth can trace their problems directly to their mortgage insurance business, not LTC.
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Old 12-04-2008, 10:14 AM   #14
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Thanks all for the comments and to Ziggy for the helpful link.

I'm 64 & DW is 62 and our annual Genworth LTC premium is ~$3500 (w/5% annual inflation-adjustment ).

If you never need this insurance it's well worth the price...but, perhaps I should consider taking a $7k loss now and going with a strong rated company rather than fret over Genworth for the next 20+ yrs. (not to ignore saluki9's comment)...alas, the travails of our golden years
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Old 12-04-2008, 05:09 PM   #15
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Originally Posted by samclem View Post
- It does make it hard to know what to do. In our case, we can't afford to self-insure for all LTC eventualities, but buying insurance and then having the company change the rules 20, 30 or 40 years down the line doesn't sound appealing, either.
.
I'll agree. The problem with LTC insurance is that the probability of filiing a claim goes up as you age, but the premiums are level. This means you're "investing" a lot in the insurer in the early years, without any chance of selling your position if you don't like the way things are playing out.

Life insurance has the same risk profile, but we have regs for it that require non-forfeiture benefits. If LTC had similar regs, I could buy knowing that I can stop paying premiums, get a reduced paidup benefit, then move my future premiums to another company.

Since that's not going to happen, I've figured that I can self-insure today - I'm 61. We've got a pile of assets that are intended to provide 30 years of retirement income, half of them would cover one person in a nursing home for quite a while. If our health stays decent, we can buy LTC when we get closer to the high claim years. If it doesn't stay decent, and one of us ends up with a long term stay at an older age, I'll hope that Medicaid is still around.
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Old 12-04-2008, 11:37 PM   #16
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Since that's not going to happen, I've figured that I can self-insure today...
Sigh. We're self-insuring by default, but I suppose a belt & suspenders isn't such a bad idea.

I haven't researched Tricare to see where their coverage runs out and where LTC insurance would kick in.
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Old 12-05-2008, 09:40 AM   #17
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LTC has risks of two types. First, there is the risk of the issuing company getting out of the business or going insolvent.

Second, the risk of significant price increases.

LTC is sold under state Accident and Health Insurance Codes. Customers are grouped into pools which are associated with the year the insurance was purchased for the particular product purchased. Each pool is priced based on the results of that particular group of insureds. As the pool gets older if the results are worse than expected in the initial pricing, then prices go up. (Doesn't work in reverse)

What can happen is that as a pool ages, and prices go up, healthier people may drop the coverage causing the price to go up faster. It would be interesting to see what people are paying who have had a LTC policy for ten years or more.
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Old 12-06-2008, 05:26 AM   #18
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Some insurers are beginning to offer life insurance with an LTC rider.

A Combo Policy For Long-Term Care
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Old 12-06-2008, 08:10 AM   #19
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Is Your Long-Term Care Policy Safe?
U.S.News & World Report
(December 05, 2008)

FWIW, I found this an informative & interesting article.

Is Your Long-Term Care Policy Safe? - The Best Life (usnews.com)
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Old 12-07-2008, 04:39 AM   #20
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Pennsylvania should look for a viable insurance company to buy the book of business and take it over. People will have premium increases... but that is better than half of them losing out.

If a viable insurance company did not take over the book... I would be considering exiting (if I were younger) unless they figured out how to make it viable.
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