The news that John Hancock has hiked premiums of its long-term care insurance policies by 40% has roused the inner pessimist in agents, according to NU Online News Service on Thursday. While there has been no outcry, expectations are down for future sales. Peter Gelbwaks, president of Gelbwaks Executive Marketing Corp., Plantation, Fla., said in a statement that the hefty increase, coupled with John Hancock’s decision to temporarily suspend group LTC policy sales, “doesn’t bode well” for the LTC industry.
Marianne Harrison, president of John Hancock Long Term Care, a division of Manulife Financial Corp., in Toronto, said in another NU Online News Service article that the company is planning to file for rate increases in all states in September. Suspension of group LTC sales is to accommodate a review of claims in that market. The company’s most recent claims study showed that claims had doubled since its 2006 study, and among policyholders 80 and over, had quadrupled.
While this “reinforce[ed] the value of the product to policyholders,” said the company, it created a pricing issue, particularly since the lapse rate was lower than expected.