Genworth LTC Strikes Again

[athena53]

One good rider on the policy is,if one dies the other has no premium.
I almost get the idea that state insurance commissions approve just about everything.
Should not be my problem if 20 years ago their actuaries were stupid,or had a cracked crystal ball.
Oldmike

As an actuary (but property-casualty, so not involved in pricing this coverage), I'd like to point out that they had limited data. You can find out what the likelihood of the average person is for needing LTC but now you're dealing with the population that chooses to purchase insurance. They're likely healthier and expecting to live a long time- or maybe Alzheimer's runs in the family. There's also a segment that in the past data might have held on and stayed out of LTC for as long as possible (with significant support from friends and family), but now they have insurance to they go into LTC. VERY hard to get this right with a new product.

I'm sure the states really wanted this product to be available- it might mean fewer people relying on Medicaid. They also tend to micro-manage every assumption in your pricing that might overstate the premiums and gloss over anything that might make the premiums inadequate.

My employer was a sub of a company I'll call Giant Enterprise. They sold off most of their insurance businesses at one point- but the buyers didn't want the LTC segment.

 

[reneeh63]

LTCI was grossly mispriced and the insurance companies are raising rates. With inflation raging, expect continued increases. One policy started at $450 20 years ago, now it's $750. The other policy started at $1325 14 years ago and is now $2300. Neither of these 2 policies had any premium increases until about 6 years ago, now they do just about every year.

For some perspective, I looked up the cumulative inflation since 2000 and it was ~68%.

$450 * 1.68 = $756
$1,325 * 1.68 = $2,226