June 2013:LTC-Guide News and Updates.

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John Hancock has announced “gender-distinct pricing, reflecting the male/female differences in the probability of benefit usage.” 

Gender-distinct pricing is not in affect in California.  (I am checking to see if CA has regulations against gender-distinct pricing.)  Only the Compact states of: Alabama, Alaska, Colorado, Georgia, Idaho, Illinois, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Nebraska, New Hampshire, New Mexico, North Carolina, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, Tennessee, Texas, Utah, Vermont, Virginia, Washington, West Virginia, Wisconsin, Wyoming.   Additional states will be included upon approval. However, Montana will remain with unisex rates, as it does not permit gender-distinct rates.

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Genworth has announced effective July 1 their LTCi Privileged Choice Flex and Privileged Choice Flex Partnership will be available in California on July 1, 2013. 

They are working on CA approved brochures and Illustrations.  Limited CA marketing materials will be approved by June 17^th. 

Contact: Charles@LTC-Guide.com for details and updates.

LTCi Update and/or Comment: Full-Gale Warning

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Storm clouds are on the horizon for Long-Term Care Insurance.  This year Guardian, Prudential and MetLife left the market.  Unum eliminated their Small Group LTCi program.  John Hancock came back into California, however, at a greatly increased premium.

Much of the turmoil is due to the Federal Reserve keeping low yields on the bonds portfolio’s making it difficult to maintain reserves sufficient to cover liabilities that increase by 5% annually.   This compounded by the fact that insured’s do not voluntarily lapsed their coverage at the previously anticipated 6% rate.  Most carriers are seeing less than a 1.5% lapse rate.  (You buy LTCi - You keep LTCi)

Genworth, the largest underwriter of LTCi, is not immune to the fiscal crisis.  They have cut agent’s commissions by 15%, are eliminating unlimited benefits and limited pay options.  In some states Genworth has reduced couples discount from 40 to 20% and eliminated preferred rating discounts.

Now there is talk of charging separate rates for men and for women who buy individual LTCi coverage instead of charging one blended unisex rate.  This will mean higher prices for women. Why?  Women tend to live longer, spend more time receiving long-term care services, and, if they are married, tend to be more likely than men to end up needing formal LTC services, not being able to depend on a spouse to provide the care.

LTCi will survive.  For now, baton down the hatches, set your sea anchor or find a safe harbor and prepare to ride out the storm. 

Conclusion: 

Don't wait for the policies to get better or less expensive, or for others to provide for you.  If it is affordable buy it.  You'll never be younger and probably not healthier than you are today.