Rate hikes. Temporary suspension of sales. What do these announcements mean for the long term care insurance industry?
John Hancock recently announced that it would be applying for rate increases averaging 40 percent for its in-force LTCI policies. This comes after an announcement that the company was temporarily suspending group LTC sales. These actions, especially from a company rated No. 1 in eight out of 10 categories in our 2010 LTCI carrier report card, may not bode well for the long term care insurance industry.
Then there was that mess back in July, when Conseco raised LTCI rates in California by 35 percent. But as it turns out, large LTCI rate increases have been happening for some time. Just last month, Congressman Frank Pallone, Jr. said he was investigating premium hikes, starting with four companies — not including John Hancock— that he said raised rates for New Jersey customers 25 percent to 35 percent. And three years ago, CNNmoney ran a story about someone who bought an LTCI policy from Equitable Life & Casualty, only to see their rates jump 30 percent the following year.