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Genworth LTC rates increasing steeply on 8/1
Old 06-29-2012, 10:17 PM   #1
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Genworth LTC rates increasing steeply on 8/1

LTC is somewhat frequently discussed here, so this seems like something people here would want to know. If you are on the fence about buying LTC insurance, now is the time to buy it. As of 8/1, Genworth (the leading LTC insurer by far) is reducing their couples discount from 40% to 20% and removing their 10% preferred health discount altogether. A preferred health couple that would pay $3000/year for a policy today will pay $4800/year for the exact same policy in one month. Their policies for couples are currently "underpriced" compared to the rest of the market and will likely never be this low again.

Note - this is not a rate increase, just a discount decrease. A single person in standard health will pay the same rates after the changes go into effect.
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Old 06-29-2012, 10:48 PM   #2
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So... next month an industry's flawed product, whose sellers may not be able to meet their commitments, will get more expensive.

I guess the good news is that the industry is beginning to realize that they're not squeezing enough profit out of the revenue.

After a year of talking with John Hancock about my father's LTC claim, I think there's enough waste inefficiency in the system for the companies to fix their own actuarial liabilities without charging higher premiums.
Geriatric financial management update | Military Retirement & Financial Independence

Genworth's courteous advance notification still makes me skeptical that now is the time to rush out and buy. Luckily I'm only 51 years old.
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Old 06-30-2012, 08:20 AM   #3
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Quote:
Originally Posted by dgoldenz View Post
Note - this is not a rate increase, just a discount decrease.
Semantics, IMO. It still walks, talks and quacks like a rate increase.
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Old 06-30-2012, 09:29 AM   #4
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I am shocked, shocked I tell you...

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Old 06-30-2012, 01:41 PM   #5
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Semantics, IMO. It still walks, talks and quacks like a rate increase.
I agree, and agents are also getting screwed with a 15% commission reduction, but it is what it is...for the next 30 days their LTC policies for couples in good health are still priced ~20-50% below the rest of the market. This still won't change anything for standard risk/single people though, so it's not a true rate increase. They made a few other changes such as eliminating the short-pay options and lifetime benefits.
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Old 06-30-2012, 11:13 PM   #6
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But will Genworth be around to perform? Weren't they on the ropes a few years ago?
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Old 06-30-2012, 11:20 PM   #7
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But will Genworth be around to perform? Weren't they on the ropes a few years ago?
Yeah, but boy are they cheap! For another 31 days, anyhow.

I guess it depends what your definition of "leading" is...
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Old 07-01-2012, 12:52 AM   #8
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As I understand these products, you pay the premium annually. So if you "beat" a big increase, your "savings" is only on the first year payment and you will end up paying the larger amounts, plus any additional increases, for the life of the contract. Which means you KNOW you are in for a 50% rate increase for next year, and who knows how much after that.
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