CNBC: Long-Term Care Insurance Becoming Less Accessible for Consumers

The ability for consumers to afford a long-term care insurance policy is diminishing as the industry weathers some rough conditions resulting in skyrocketing premiums and discontinued coverage by some major players. 

As the industry begins to analyze trends among policyholders and claimants, it’s adjusting its product and pricing accordingly. Some providers are even dropping out of the game and no longer offering new policies. 

That doesn’t bode well for some consumers—especially women—and many companies are now requiring “enhanced underwriting,” or health screening by in-house medical professionals, to assess applicants’  insurability, says the article.

Advertisement

CNBC reports:

Long-term care policies have only been offered on a large scale since the 1980s, meaning insurers are just now seeing clear claims patterns emerge. From their perspective, it’s an ugly picture: more people than expected are holding onto their policies until they can file a claim, and years of rock bottom interest rates have kept insurers from earning a decent return on policies whose benefits increase three to five percent a year.

The results: a number of providers have left the business, and others are jacking up rates: California’s public pension fund, CalPERS, recently won approval for an 85 percent increase over two years. Some, like John Hancock, a subsidiary of Manulife, are offering stripped down plans that keep prices in check but cover less.

Now companies are starting to differentiate among potential customers in new ways to ensure that premiums better reflect policyholders’ risk profiles.

The changes are jarring. Genworth, a leading provider of long-term care insurance, has already begun charging single women more for policies. On April 29 John Hancock will follow suit, and the rate hikes could be as high as 40 percent.

…Patrice Goldfarb, a certified senior advisor and an employee benefits consultant, is adamant on the need for single women to jump in. She says that when she first heard of companies proposing to raise rates for women, “the first thing I did was send a massive blast email to everybody I could think of saying to buy the insurance before rates go up.”

However, Goldfarb also says consumers may actually need less long-term care insurance coverage than they’d expect, according to CNBC, citing studies that show consumers’ LTC insurance claims typically cover less than three years of care.

Read more.

Written by Alyssa Gerace

string(113) "https://reversemortgagedaily.com/2013/04/29/cnbc-long-term-care-insurance-becoming-less-accessible-for-consumers/"

Share your opinion