Changes Coming in Long Term Care

Over the last part of 2012, we saw many dramatic changes in the Long Term Care Insurance world. Specifically, some carriers left the market place, some carriers eliminated certain benefits and plans and other carriers repriced their policies to bring them in line with their actual experience.

The latest big change concerns rates and underwriting; carriers are looking at moving to gender-specific rates (rates for women will definitely be higher as they live longer and are more likely to use the insurance.)  Insurability is changing to more life-based underwriting.  Genworth is the first to announce these changes with the launch of Privileged Choice Flex 2, April 2013. It will most likely launch in the Interstate Compact states first, then in the other states as it is approved.  When it is launched in a particular state, it will be the only Genworth LTCI product available.

 The good news is that with this new product, Genworth will be returning to the higher first-year agent compensation which was reduced last July.

However, there will never be a better time to insure your single female clients.  Act now!

Here are some other changes Genworth is making with this new product:

  • Adding 4% Compound Inflation
  • Eliminating 7-yr. Survivorship Option
  • Reducing maximum age from 79 to 75
  • Lifetime benefit multiplier will be discontinued
  • Redefining ‘couples’, eliminating relatives and restricting to 2 people
  • Applying claims offset on all compound benefit increase options
  • Informal care available for homemaker and chore care services only

Underwriting changes:

  • Will require paramed for all applicants (this could be a good thing as it may reduce the need for phone interviews and medical records at younger ages.)
  • Will require family history (insure your clients with family history of dementia, Alzheimers, Parkinson’s and other genetic diseases now!)
  • Four new underwriting categories:
    • Preferred Best
    • Preferred (10% higher premiums than Preferred Best)
    • Select

We have given you all the information available at this time. Genworth has promised more next month. So stay tuned

About Jeffrey Berson

40 years in and around the industry has made Insurance a part of my DNA. I have had the pleasure of working with and for some of the greatest minds in our industry. My "Bersonal" View is an attempt to capture some of the best ideas, the best concepts and the best practices in a way that can lead to success for others. It will certainly be my point of view, so please...don't take it "Bersonal".
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