Q: If JH is seeking said rate increases, as an example, then how important/valid is the advice to always look toward a company that has both feet solidly placed into the market - i.e. JH, Genworth, etc?? Based on my (not so recent) experience and the excellent posts within this topic I understand that the topic of potential future rate increases needs to be a part of the discussion during the sales process. It appears to be impossible (currently) to have any confidence in what to expect regarding preium rate stability. With this being said my BIG question is: Do smaller, late-commers into the LTC market have any advantages over the huge players like JH, etc?? - or is it still just disadvantage, disadvantage, disadvantage? Have the Auto Owners & Country Life's of the world, surely among a miriad of others, learned anything from the big boys? If the new kids on the block do not have a stable of worrisome policies on the books is it reasonable to argue that there might be an advantage to considering new players? I'm guessing the variiables/data needed to make such a judgement simply aren't available but I wanted to see if any of you had feedback. Always appreciated - Mike in Michigan

Mike,
Good question......

One would think that the newcomers to the market would have a better idea on setting accurate rates based on claims-paying statistics and history from the industry. After all, they do have over 30 years of history to look at.

But in spite of that, a carrier may enter the market and low-ball everyone else in order to get the business. And, down the road be forced to file for a rate increase.

The problem with smaller carriers (such as your example: Auto Owners & Country Life) is that they have such a small block of business a few major claims could wipe out their reserves.

Not sure what the answer is but at the end of the day, personally, I would rather deal with a larger, more established carrier.
Arthur

when you talk to the Northwest Mutual rep (A++)......you will hear that they have never raised their rates and likely never will.....since as a mutual company are not bound to the stockholders the way the other carriers are. They can of course raise their rates if they want to, but you will get the impression that you may simply not keep getting the big fat dividend checks that they (supposedly) currently send to their policy holders if times get tough. So in reality, in this case, the rate stability could actually be better.....but it is also likely that you paid a lot more to get in the door in the first place. They use the same suitability form with the 20% hypothetical increase question of course.

everyone has an angle.

Yankee,
You're right, NWM has never raised rates on existing policyholders and you're also correct that their rates are much higher than other carriers. Their agents focus on their dividends (which are used to lower the following years premium) but the last time I did some checking (about 3 years ago) their dividends for LTCi only amounted to a couple of hundreds a dollars a year. And they are way more than a couple of hundred dollars a year than other carriers.

Remember the good old days.......
When we all said "No carrier has ever had a rate increase on existing policyholders"? Today, that cannot be siad.

In New York, Pru, Medamerica, Guardian, Mass Mutual, NWM, NY Life & Transamerica have never had rate increases on existing policyholders.

But we all know that somewhere down the line we'll no longer be able to say that.
Arthur

More good responses - thanks.

Thanks for the info.
What about Unum's Group LTC offering? I've been told that it provides guaranteed issue (no questions asked) for amounts up to $200 per day with 6 year duration, as opposed to the multi-life programs that have "simplified issue" underwriting with the 3 - 5 health questions. I also heard that they've never raised rates on an existing group customer.

Looking for more info from anyone that has sold a Unum group plan. Pros v cons?

Thanks!

There is no such thing as a guaranteed issue group long-term care policy that does not ask any qualifying questions.

So now it is Genworth's turn to raise rates on older policies (again)....albeit not as bad (up to 18%) as Hancock's announcement. At least the current product rates are staying the same for now.

Hi Herman,
I heard the same:
18% on Priv Care Select I & II. It's just being filed.
Arthur