John Hancock has sold over 1.2 million long-term care insurance policies since 1987.  Most of those policies were sold between 2002 and 2012.  During that 10-year span John Hancock offered some of the best (in many cases, THE BEST) LTC insurance policies on the market.  I have hundreds of clients who have purchased great long-term care insurance coverage from John Hancock.

For nearly every year of that 10-year span, John Hancock has been the #1 or #2 leader in number of new policies sold.  Sadly, they developed a radically new policy about 4 years ago and their sales have plummeted. In the past six months John Hancock’s sales have accounted for less than 7% of the new LTCi policies purchased.

Yesterday, in most states, 13 different companies sold long term care insurance.  Today, John Hancock announced that they would stop selling new long-term care insurance policies, reducing the number of active sellers to 12.  For those of us familiar with the deficiencies in their new product offerings, this announcement was not a surprise.  Their announcement listed several reasons for this decision including:  “macro-economic trends”, “changes in the distribution landscape”, “capital requirements”, “consumer demand”, blah, blah, blah, blah, blah.

Here’s a little background:  About 4 years ago, John Hancock created a “new and innovative” long-term care policy.  After close examination of the “innovations” we concluded that the product offered much weaker inflation protection than the rest of the industry AND the policy was priced considerably higher than the rest of the industry.  Higher premiums for less benefits!!!  We did not recommend the “new and innovative” policy to any of our clients.

After sales for that policy flopped, John Hancock tried again with another “new and innovative” approach to long-term care insurance, in the Spring of 2015.  This new policy had lower premiums than their previous policy, but the new policy had premium increases that were projected to occur almost every year!!!!  Other leading long-term care insurance companies offer policies with premiums that are designed to remain level for life (especially in states that have the new Rate Stability Regulations).  Why buy a policy that has premiums that are planned to increase every year when you can buy one that doesn’t have planned premium increases?  Needless to say, we did not recommend this “new and innovative” policy to any of our clients.

As I mentioned in my blog last January:  “Consumers now realize that the long-term care policy offered by their auto insurance company may not be the best choice for them. Consumers now understand that the long-term care policy their financial advisor sells may not be the policy that is best for them.”

Today’s long term care insurance policies offer more benefit choices than ever before.  Companies that offer competitive LTC policies are experiencing growth in sales.  Companies that don’t, aren’t.