The passing year was a painfully educational year for the people involved with selling, writing and administering private long-term care insurance (LTCI) coverage
Just as members of the LTCI community were starting to get the hang of getting consumers to think about the need for planning for long-term care (LTC) expenses, the community that underwriting the coverage is trickier than originally expected; that policyholders who suspect that they might need LTCI benefits hang on to their policies with a titanium grip; and that LTCI businesses suffer when interest rates hover near 0 percent for years at a time.
Here’s a look at the five most frequently read stories we ran in the LTCI section in our Health Channel from Dec. 18, 2011, to Dec. 18, 2012.
Executives at Genworth Financial have been fighting tooth and claw to keep the LTCI market vibrant, and they said in August that they would have to make pricing and product design changes to adapt to changing times.
Martin Klein, then the company’s acting chief executive officer, said Genworth had to improve the profitability of the products.
“These products need to provide value not only for policyholders but also for shareholders,” Klein said.
In May, a Pennsylvania state court judge, Judge Mary Hannah Leavitt, suggested in an order that the state insurance commissioner ought to try harder to rehabilitate Penn Treaty Network American Insurance Company (PTNA) and a major Penn Treaty subsidiary, American Network Insurance Company.
Penn Treaty helped create the modern LTCI market.
Eugene J. Woznicki, the chairman of Penn Treaty, said he hoped to get the companies back into the LTCI market.
Penn Treaty is posting copies of case pleadings on its website. At press time, the most recent case document posted was an order relating to approval of transcripts.
3. Your Uninsurable Long-Term Care Insurance Client: When No Means It’s Time To Come Up With More Ideas
Stuart Armstrong, a financial planner in Needham Heights, Mass., scratched an itch that clearly needed scratching with an article about how financial professionals can help clients who understand the need for LTC planning but have trouble qualifying for traditional LTCI coverage.
Armstrong pointed out, for example, that couples using life or annuity products to prepare for LTC expenses may need to use a different risk profile and investment time frame for the LTC planning assets and the retirement planning assets.
A giant insurer pulled back from the individual LTCI market and later from the group market.
Prudential said it was dropping individual LTCI coverage because of the challenging economics in the LTCI market.
William H. Byrnes and Robert Bloink warned financial professional readers that even those who have been selling LTCI might have to cope with LTCI market consolidation by recommending that some clients consider life or annuity products that offer LTC-linked riders or other features aimed at consumers who are planning for LTC expenses.