Genworth Files for Long Term Care Insurance Rate Increases on Certain Policies
According to a press release published by Genworth Financial, the company has begun filing for in force rate increases on some of their past long term care insurance products.
Which Policies are Affected?
The company, who is currently one of the leading long term care insurance providers in the nation, announced in yesterday’s press release that certain Privileged Choice and Classic Select plans purchased between the years of 2003 and 2012 are the products targeted for rate increases.
Genworth’s premium increase requests range from 6% to 13% and “will help offset lower than priced-for returns, primarily due to improvements in life expectancy and lower-than-anticipated lapse rates”.
These requests are being filed in addition to the in force rate increases requested by the Fortune 500 company just last year, for which they are still awaiting approval.
Pat Kelleher, President and CEO of Genworth’s U.S. Life Insurance Division, explained the reasoning behind the filings more in depth: “The premium rate increases we have begun filing for represent another step toward improving the performance of our long term care insurance business. We continue to proactively manage this business by closely monitoring emerging experience on in-force policies. Where appropriate, and subject to regulatory review, we will seek smaller rate increases beginning earlier in the product lifecycle with the intent of avoiding larger rate increases in the future which we feel is a better approach for consumers and regulators.”
While any rate hike is typically not a move welcomed by policyholders, this method could help increase the affordability of policies in the future and avoid massive increases of 50-100%, which many companies have been forced to implement due to inaccurate claims predictions. These increases have caused some people to reduce coverage in order to afford the premiums and a very small percentage to drop coverage altogether.
As noted in the press release, lengthened life expectancies and improved medical technology have led to higher than expected claims rates. In addition, the growing cost of health care poses a threat to insurance companies, who must keep pace with price in order to remain solvent.
Though many avoid buying long term care insurance due to higher premiums, in the long run, this choice could end up devastating your finances. The increase in rates is not a good reason to forgo long term care insurance; if anything, it is an indication to consider a policy.
Are You Prepared for the Cost of Care?
If you think the cost of long term care insurance is expensive, wait until you are faced with the cost of long term care. A single month of care can run anywhere from $1,000 to $8,000, depending on the type of care received, the chosen care setting, and the geographical location, which has a big impact on cost of care.
The risk of needing long term care remains whether you buy long term care insurance or not, so planning ahead is the wisest option for those with assets to protect. If you have questions about the different options, request more information and we will be in touch shortly to provide you with a side-by-side comparison of the top providers and plans.