Understanding what consumers with older long-term care insurance policies do when facing a rate increase is important for both insurance agents as well as consumers explains the American Association for Long-Term Care Insurance (AALTCI).
"There was some very interesting information shared during the quarterly analyst call hosted by Genworth Financial," explained Jesse Slome, director of the LTC industry organization during a presentation to leading long-term care insurance specialists. The Genworth Financial third-quarter earnings call took place October 30, 2019.
"We field hundreds of calls annually from consumers facing rate increases on their policies and most want to know what to do and what others do," Slome shared. "The information shared by Genworth which has more long-term care insurance policyholders in the U.S. than any other company is highly relevant and revealing."
According to information shared during the call, when the company first implemented rate increases during the time period of 2012 to 2016 about 90% of the policyholders agreed to pay the full premium increase. The company noted that around six or seven percent reduced their policy benefits in order to avoid paying more in premium and roughly three to four percent accepted a non forfeiture option.
The Genworth executives noted that the numbers today have changed. "If we look at our cumulative metrics to date, those that have always paid the full increase are down to the 70-ish percent, around 71%, reduced benefits is about 20% and in non-forfeiture option is about 9%," according to the company's Chief Financial Officer.
"While no one likes to spend more money, it is still clear that consumers value the importance of this protection, even when it costs more," Slome added. "In fact, when we show them how much more an equal new plan of coverage would cost, they better understand their options."
According to Slome, one of the most valuable pieces of information, shared by Genworth is the fact that insurance company has paid some $18.5 billion of claim payments to 280,000 individuals over the past four years. "People tend to overlook that very important fact that long-term care insurance and long-term care insurers pays," he adds.
The Association director noted increased interest in a webpage for consumers facing long-term care insurance rate increases. To access the information, go to http://www.aaltci.org/rate-increase.
The American Association for Long-Term Care Insurance advocates for the importance of long-term care planning. Established in 1998, the organization connects consumers with knowledgeable professionals who are independent advisors for no-cost, no-obligation long-term care insurance quotes and policy comparisons.
The American Association for Long-Term Care Insurance, the American Association for Medicare Supplement Insurance and the American Association for Critical Illness Insurance all advocate for the importance of planning and support insurance professionals nationwide. Jesse Slome, founder and executive director of the organizations, is a leading consumer advocate and author of numerous consumer and professional guides focused on retirement and insurance planning that have been published by governmental agencies and private organizations.