Genworth Financial Inc. is moving away from the long-term care insurance (LTCI) community’s traditional focus on selling products designed to protect buyers from the full cost of long-term care. Genworth (NYSE:GNW) says it will take a two-track approach when it releases new LTCI products later this month.
One group of products will offer traditional LTCI coverage with a total benefits value starting at $100,000. The other group, aimed at budget-conscious consumers, will offer significantly less coverage but have monthly premiums starting at less than $100.
Elena Edwards, president of Genworth Long Term Care, says the company has been talking to regulators and consumers as well as to distributors about way to improve its LTCI products. In the past, consumer groups and others have emphasized the need for consumers to plan for the risk that dementia or other chronic conditions could force them to use expensive nursing home care for years.
In recent years, low interest rates and information about the performance of actual LTCI blocks of business have pushed up the cost of LTCI coverage sharply, limiting the number of people who have the means to buy policies with rich benefits. LTCI program managers at Genworth say they think buying coverage with a lower level of benefits may make good sense for consumers who hope to rely mainly on home care.