John Hancock raising Long Term Care rates 32%

[dgoldenz]

The bells and whistles are critical though, although it seems you feel otherwise. Given that nobody knows whether LTC will face massive rate increases in the future, a survivorship benefit is huge for a healthy couple that is looking at this for 15-25 years down the road. Anyone who sells health insurance or has ever bought health insurance should easily see the value in a survivorship benefit. Just think if they were available and you bought one of those 25 years ago before health insurance costs exploded, spouse died, and now your policy is paid up for life instead of going up 25% a year, meanwhile your spouse is long gone.

Also given that most people would prefer home health care to a nursing home or assisted living facility, 0-day EP for home healthcare is also important to have. I'm sure you know that the HHC benefit also counts towards the elimination period chosen for the base policy, even if the care isn't being done on a daily basis. Do you have a lot of clients that buy an unlimited benefit? Must be some wealthy clients...

 

[JackLenenberg]

How are you coming up with rates for Guardian lower than a comparable policy with John Hancock? The base rates may be similar, but add on a few of the important benefit riders and the Guardian price goes through the roof. See the example I posted and re-run it yourself.

Are you kidding? JH is not priced competitively at all.

Married couple age 60/55 $$200, 3 years each, compound 5%, 90 days

Genworth $2994 A
Guardian $3309 A++
Mass Mutual $3315 A++
Mutual of Omaha $3459 A+
Transamerica $3613 A
John Hancock $3802 A+
State Farm $3844 A++
Prudential $4179 A+
NY Life $5628 A++
Met Life $5816 A+


John Hancock is middle of the road. Genworth Mass Mutual and Guardian are the companies to look at. And many clients will prefer A ++ companies in today's economic climate.

 

[JackLenenberg]

The bells and whistles are critical though, although it seems you feel otherwise. Given that nobody knows whether LTC will face massive rate increases in the future, a survivorship benefit is huge for a healthy couple that is looking at this for 15-25 years down the road. Anyone who sells health insurance or has ever bought health insurance should easily see the value in a survivorship benefit. Just think if they were available and you bought one of those 25 years ago before health insurance costs exploded, spouse died, and now your policy is paid up for life instead of going up 25% a year, meanwhile your spouse is long gone.

Also given that most people would prefer home health care to a nursing home or assisted living facility, 0-day EP for home healthcare is also important to have. I'm sure you know that the HHC benefit also counts towards the elimination period chosen for the base policy, even if the care isn't being done on a daily basis. Do you have a lot of clients that buy an unlimited benefit? Must be some wealthy clients...

I have already stated that I write Genworth Privileged Choice more than any other policy. So, I like for my clients to have the survivorship feature and the 0 day waiting period. But I also recognize that these are hypothetical riders that may or may not benefit the client. At it's core, the most important features of a LTC Policy is the monthly benefit, the pool of money, and the inflation protection. The focus should absolutely be on these features. You have been missing this point. You can not state that Guardian and Mass Mutual are overpriced because you are opting to include Paid-Up Spousal Survivorship and 0 day waiting periods as options. If my client wants to know how much a $1,000,000 10 year term policy costs, and company A is 10% less expensive than company B, until I add disability waiver, and Company A becomes 25% more expensive because it prices the disability waiver too high, I can't assume that my client needs the disability waiver. He may just want the $1,000,000 life insurance policy. I owe it to my client to tell him that company A is 10% cheaper rather than adding riders that change the picture. Now, I also owe it to my clients to discuss the value of the riders, and that is why I write a lot of Genworth. But I don't have my clients walking away thinking they can't get a Guardian or a Mass Mutual policy at a great price if that's what they want.

 

[dgoldenz]

How are you coming up with rates for Guardian lower than a comparable policy with John Hancock? The base rates may be similar, but add on a few of the important benefit riders and the Guardian price goes through the roof. See the example I posted and re-run it yourself.

QUOTE]

Are you kidding? JH is not priced competitively at all.

Married couple age 60/55 $$200, 3 years each, compound 5%, 90 days

Genworth $2994 A
Guardian $3309 A++
Mass Mutual $3315 A++
Mutual of Omaha $3459 A+
Transamerica $3613 A
John Hancock $3802 A+
State Farm $3844 A++
Prudential $4179 A+
NY Life $5628 A++
Met Life $5816 A+


John Hancock is middle of the road. Genworth Mass Mutual and Guardian are the companies to look at. And many clients will prefer A ++ companies in today's economic climate.

What do the numbers look like expressed as a monthly benefit instead of daily and with the riders added in? I wouldn't even bother with some of those other companies, even though I sell other lines for them. While Genworth isn't A++ rated, they're in the LTC game for the long haul. We've had several clients get killed by rate increases on TransAm policies that were bought years ago. I'm sure you know how things go when companies abandon their products. Genworth/JH/Guardian would be the companies I would use most unless there was an underwriting issue. Guardian is a great company, no doubt about that, but the price of their 5% compound rider is insane. With the new increases, JH will probably get knocked down a few pegs. Given the rapid increase in medical care costs, I'm a big believer in 5% compound riders. If they want to price those out of their portfolio, so be it. Someone else will take their business.

 

[dgoldenz]

I have already stated that I write Genworth Privileged Choice more than any other policy. So, I like for my clients to have the survivorship feature and the 0 day waiting period. But I also recognize that these are hypothetical riders that may or may not benefit the client. At it's core, the most important features of a LTC Policy is the monthly benefit, the pool of money, and the inflation protection. The focus should absolutely be on these features. You have been missing this point. You can not state that Guardian and Mass Mutual are overpriced because you are opting to include Paid-Up Spousal Survivorship and 0 day waiting periods as options. If my client wants to know how much a $1,000,000 10 year term policy costs, and company A is 10% less expensive than company B, until I add disability waiver, and Company A becomes 25% more expensive because it prices the disability waiver too high, I can't assume that my client needs the disability waiver. He may just want the $1,000,000 life insurance policy. I owe it to my client to tell him that company A is 10% cheaper rather than adding riders that change the picture. Now, I also owe it to my clients to discuss the value of the riders, and that is why I write a lot of Genworth. But I don't have my clients walking away thinking they can't get a Guardian or a Mass Mutual policy at a great price if that's what they want.

I think we're in the same boat here...but I would estimate less than 10% of our clients decide to buy just a base LTC policy versus one with the riders, while most people buying life insurance don't buy the disability waiver since the definitions of disability are much tougher than a separate disability policy which may have a residual/partial benefit. I keep things on an even keel when I show the quotes so they can compare apples-to-apples. If they want to remove some riders, they can see exactly what the price breaks down to.

 

[JackLenenberg]

What do the numbers look like expressed as a monthly benefit instead of daily and with the riders added in? I wouldn't even bother with some of those other companies, even though I sell other lines for them. While Genworth isn't A++ rated, they're in the LTC game for the long haul. We've had several clients get killed by rate increases on TransAm policies that were bought years ago. I'm sure you know how things go when companies abandon their products. Genworth/JH/Guardian would be the companies I would use most unless there was an underwriting issue. Guardian is a great company, no doubt about that, but the price of their 5% compound rider is insane. With the new increases, JH will probably get knocked down a few pegs. Given the rapid increase in medical care costs, I'm a big believer in 5% compound riders. If they want to price those out of their portfolio, so be it. Someone else will take their business.

 

[brewer12345]

Guys, get a room.

 

[JackLenenberg]

With all due respect you are analyzing the cost incorrectly. The price of the compound inflation rider with Guardian is not "insane." It's approximately the same percentage as Genworth or Hancock. In looking at the percentage of premium increase for your hypothetical couple age 70/63 best health $150, 3 years each, 90 day wait Guardian $2897 without inflation, $4680 with 5% compound. John Hancock $2663 without inflation, $4761 with 5% compound; Genworth (Classic Select) $2257 without; $3823 with 5% compound rider.

The proper analysis is to determine the percentage increase in premium by adding the compound inflation rider to the core benefit package.

Guardian 61%
Genworth 69 %
John Hancock 78%

Guardian is actually the lowest percentage wise.

If I add the waiver of premium for home care as the rider to Guardian's policy just to make it apples-to-apples the numbers change to $3216/$5468---70% increase. Either way, still in the range of Genworth, and still less expensive to John Hancock.

dgoldenz, I hope this makes sense for you. If you have any questions, or if I can help you, please feel free to give me a call. I have well over $1,000,000 of long term care premium on the books, so this is not my first rodeo.

What you did was add all the optional riders to Guardian's policy to drive up the base price to $6000, and then you felt the compound inflation was expensive because it then took the premium to $10,000. Just because the dollars were now higher, doesn't mean that Guardian charges a lot for the rider. Compound 5% inflation will add 60%-70% premium to every policy. Guardian is no different than Genworth. The analysis is the premium percentage, not the dollars. As I have mentioned, you can't go to Guardian looking to buy the fluff. But it doesn't mean that Guardian doesn't include the important options like inflation any different than Hancock or Genworth. And come next month, John Hancock is gone.

 

[bbbamI]

Guys, get a room.

 

[JackLenenberg]

I think we're in the same boat here...but I would estimate less than 10% of our clients decide to buy just a base LTC policy versus one with the riders, while most people buying life insurance don't buy the disability waiver since the definitions of disability are much tougher than a separate disability policy which may have a residual/partial benefit. I keep things on an even keel when I show the quotes so they can compare apples-to-apples. If they want to remove some riders, they can see exactly what the price breaks down to.

Bottom line is I just wanted to point out to you that you were mistaken in your belief that ALL mutual companies were priced twice as high as Genworth and John Hancock. The fact remains that Northwestern is a mutual company that IS outrageously expensive for LTC. Mass Mutual and Guardian are two mutual companies that are VERY well priced, and often times better priced than JH. Of course everything depends upon age and health of the client, and respective underwriting. The primary objective is to advise the client properly and get the application approved, whichever company you go to.

Thanks. Class is now out of session for summer break.

 

[Bestwifeever]

It's like watching Nascar, in a way. Round and round they go.

 

[REWahoo]

Let's just hope they both keep turning left...

 

[hogwild]

The rates are public information, but you would still need to get them from somewhere. You can request them from each insurance company based on a given set of parameters, but it's not something you will find posted publicly online unless you are an agent. There are many variables and optional riders with LTC and unless you know what you're looking at, you may not have an apples-to-apples comparison. Companies like Mass Mutual, Guardian, and Northwest Mutual will have much, much higher rates than JH and Genworth.

I bought LTC policies for my wife and I 6 years ago. I got quotes from 3 or 4 companies, but State Farm has a quote calculator on their site: www.statefarm.com. I didn't buy there policy, but I did use the calculator to run the various options for comparison.

Just an FYI for anyone interested.

 

[Independent]

I bought LTC policies for my wife and I 6 years ago. I got quotes from 3 or 4 companies, but State Farm has a quote calculator on their site: www.statefarm.com. I didn't buy there policy, but I did use the calculator to run the various options for comparison.

Just an FYI for anyone interested.

Thanks, it seemed to work for me. I wonder if anyone else can point to an online quote system for LTC insurance?

 

[chinaco]

AARP / Genworth quote. https://longtermcare.genworth.com/SimpleEngine/private/loginAARP.do

 

[stephenandrew]

Genworth

Several years ago, I purchased a LTC policy for myself and wife from Genworth througth a broker. I have had for maybe 4 years now, and to date, the policy premiums have not changed. Two interesting thigns: (1) about 6-9 months ago, I got a letter from Genworth--a reminder of sorts that my LTC premiums were not guaranteed. They were not raising my rates, but letting me know that those premiums could be increased. I obviously have taken that as a sign that a rate increase is likely/possibly (you choose the word). Also, the broker that sold me policy (USAA) told me they no longer sell/reprsent Genworth. I asked why and he told me that it was because Genworth no longer met their financial standards. (Someone here posted the AM Best Rating of several companies--I think Genworth's was the lowest among those posted.) Now USAA's somment to me could just be a bunch of bunk--it might be because Genworth cut their commissions, but I have always found USAA to be pretty professional and reputable, so I take them at their word. Anyway, the lower rating made me think that was nother reason why the might soon be increasing thier rates.

 

[chinaco]

Ratings are important.

LTC insurance is one of those products that mitigates the risk of unexpected health care costs. Often, the increases in insurance premium winds up being the unexpected cost.

IMO - It is worthwhile to consider it if you can get a decent deal with a strongly rated company.

But it is only one tool. There are other ways to try to protect oneself from the financial impact as well as the financial impact to the surviving spouse.

No matter how you approach it... You either take the risk and hope for the best or you try to mitigate the risk (which will cost money).

We have taken a proactive approach... Understanding the issues, your options, and developing a plan (before you find yourself or a spouse needing LTC) is the best approach.

Some have discussed the use of Life Insurance to protect the surviving spouse from poverty. It seems some people use Irrevocable Trusts. Some states have better rules that enable the spouse to keep more. It seems that some state allow the spouse to keep the house and some amount of assets and income. Some states let the spouse have half the assets, others have a low dollar cap.

This is another one of those situations where spreading the risk broadly across a large population is an important component of reducing costs.... but it seems few are willing to pay to mitigate the risk. For the majority of the population... the tax payers bear the burden.

 

[JackLenenberg]

John Hancock Premium Estimator

John Hancock sample long term care premium estimator

Long-Term Care Insurance Plans and Information - John Hancock Long-Term Care

 

[bamsphd]

Does any company offer a single premium option?

My ideal policy would have a long, say 5 years, exclusion period, but an unlimited inflation adjusted benefit after that exclusion. Basically, I want to self insure for the likely cases, but pay someone to cover the long shot case where my wife or I live for a very long time. However, I'm totally unwilling to buy into a deal where the other side can change the price anytime they want during the next few decades before there is much chance I will get any benefits!

 

[Banned LTC Salesman]

Does any company offer a single premium option?

My ideal policy would have a long, say 5 years, exclusion period, but an unlimited inflation adjusted benefit after that exclusion. Basically, I want to self insure for the likely cases, but pay someone to cover the long shot case where my wife or I live for a very long time. However, I'm totally unwilling to buy into a deal where the other side can change the price anytime they want during the next few decades before there is much chance I will get any benefits!

A few of the top long term care insurers offer single-pay policies. Most of them include a refund of premium upon death.

 

[East Texas]

First of all, I apologize for resurrecting an old thread. It seems to be the most relevant one on the board for this information.

I just received my annual renewal notice from John Hancock. My premium did not change. Either they did not get their Texas filing done in time or my policy (written in 2004) was outside the scope of their increase.

I pay a flat $1,515 each year for a lifetime policy with a 60 day elimination and 5% compound inflation. My new monthly benefit is a little over $5,000.

I think the lifetime provision was discontinued shortly after I bought my policy. I should reach the break-even point between the premium and the coverage in about four more years so I'll be paying less premium for higher coverage. In ten more years I'll have about $100,000 annual coverage for the same premium.

I wish John Hancock would create a robust website for the LTC customers. In this technology age, it's strange for such a large business to have such a bland website. It's the only company with whom I do business that only takes checks and only corresponds by USPS. I have to call them after the check processes to get an updated benefits summary. I just don't get it....

 

[Duke of Sands]

We have Hancock LTC insurance through USAA and pay automatically each quarter using a credit card. Strange that Hancock direct wouldn't have the same.

 

[East Texas]

We have Hancock LTC insurance through USAA and pay automatically each quarter using a credit card. Strange that Hancock direct wouldn't have the same.

Mine is through USAA also. This is the odd thing - you can pay quarterly by credit card; but, not annually. I get a reduction in premium for paying annually so I'm not about to give that up.

Does JH send you an updated benefits statement each year or do you have to call and request it (I have to call)?

 

[Duke of Sands]

Good point on the annual payment discount. Just couldn't bring myself to cough up that big a lump every yr. Have only had it for a year but have not rec'd an updated benefits statement as yet.

 

[East Texas]

Good point on the annual payment discount. Just couldn't bring myself to cough up that big a lump every yr. Have only had it for a year but have not rec'd an updated benefits statement as yet.

I call JH the day after my renewal date to get an updated benefits statement. It has been my experience you don't get one unless you call.