"The dangers of long-term care insurance"

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills.
Browser
Posts: 4857
Joined: Wed Sep 05, 2012 4:54 pm

Re: "The dangers of long-term care insurance"

Post by Browser »

Even if you can't get unlimited coverage, I agree with the article's author that it makes the most sense to stretch out coverage for a longer period and extend the exclusionary period. You want insurance to cover the highest cost and cover the lowest cost yourself. That's why it makes better sense to have a high deductible on your car insurance and your health insurance, at least up to the limit you can cover yourself without serious financial pain. If you can cover the first year of LTC yourself, I'd rather have a policy with 5-year or longer coverage with a 365-day exclusionary period, assuming the premium difference is not unreasonable. I don't know the statistics, but I'm betting that the cohort that gets past 365 days of LTC might be the one that lasts for 5 years or more; kinda like the life-expectancy cohorts - the longer you stay alive the longer you'll probably still be alive. We might be talking about the Alzheimer's cohort, which can last a pretty long time and devastate one's financial resources.
We don't know where we are, or where we're going -- but we're making good time.
bluemarlin08
Posts: 1561
Joined: Wed Aug 29, 2007 12:18 pm

Re: "The dangers of long-term care insurance"

Post by bluemarlin08 »

I don't know any carriers that are currently offering unlimited benefit periods. One concept folks are considering if they are concerned with a long claim, buying a very high current benefit with compound interest and a long waiting period, and buying the longest benefit period, 10 years with GE. Benefits can be stretched for years past the stated benefit period, what isn't used isn't lost, it's a bucket of money.
edge
Posts: 3833
Joined: Mon Feb 19, 2007 6:44 pm
Location: NY

Re: "The dangers of long-term care insurance"

Post by edge »

First, Genworth's LTC block is old, older than 30 years. Second, LTC is NOT a sliver of its business. Lastly, Genworth does seem to have stabilized.

ChrisC wrote:
dhodson wrote:
ChrisC wrote:
dhodson wrote:
Not at all. You tried to ask a question which you thought had no real answer and i gave you an actual answer and those ideas arent impossible. LTCi is not a small sliver for genworth who is the biggest player in the ltci market. Genworth's stock a few years ago got pretty close to zero in 2009 if im not mistaken. GE used to own that business but spin it off to genworth. Im not sure why you think insolvency cant be restricted to this line of insurance.


You peaked my interest here. Genworth stock is now trading at $15. http://finance.yahoo.com/news/genworth- ... 04791.html. Reports indicate Genworth has 33 percent of the LTCi market, but I can't find out how much of its operations or revenues are derived from LTCi. I can't imagine that LTCi product for Genworth represents such a huge part of its operations or revenues, though it could drag down earnings if very unprofitable. I tried looking at its SEC filings and I can't decipher the information about its lines of insurance business operations.

I never said that insolvency can't be caused by dire financial consequences in a line of business that constitutes a significant part of its revenue or operations. I was saying that I thought LTCi wasn't a big part of the major players insurance product line such that dire consequences there wouldn't plunge it into insolvency.

Do you have information that LCTi operations on its balance sheet could expose it to insolvency if its LTCi product line blew up?
What kind of information are you looking for?
You dont think that a company that has 33% of the market could be taken down if LTCi blew up?
You believe the other companies that left the market made a mistake (and typically were charging higher premiums at the time from my observation)?
Have you looked what happened in Japan after a longer period of low interest rates?
Nobody knows what the future holds but the risks just arent the same as they are with other products. Guarantee is based on the ability of the company to pay that guarantee period.
You're the one who posited the idea that carriers with a product line of LTCi could be insolvent and not pay claims. And yes, I don't think that a company with 33 percent of the market could be taken down if LTCi blew up unless its business model was predicated substantially on that product line. I asked before do you know how much of Genworth's operations or revenues are based on LTCi? Again, with the recency of the product, I doubt its more than a "sliver" of its operations or revenues. I'd be surprised if it's more than 15 percent but I could be wrong. Genworth seems to doing well on its mortgage insurance and life insurance product lines.

Let's not conflate its market share with its base of operations and revenues. Johnson Controls might dominate market share in automotive batteries, but even if that segment blew up, it would likely absorb that shock as it has multiple business and product lines. Moreover, I doubt the insurance regulators would permit over concentration by any carrier in LTCi in light of the product.

I don't believe other companies left the market made a mistake; there are so many factors as to why companies exit a particular business line; nonetheless, uncertainty over underwriting and pricing the product, with faulty actuarial considerations (like underestimating lapse rates), might have caused some to exit. Evidently, others who remain might see gold where some others see fool's' gold or didn't like the fit for them.
ChrisC
Posts: 1475
Joined: Tue Jun 19, 2012 9:10 am
Location: North Carolina

Re: "The dangers of long-term care insurance"

Post by ChrisC »

edge wrote:First, Genworth's LTC block is old, older than 30 years. Second, LTC is NOT a sliver of its business. Lastly, Genworth does seem to have stabilized.

Yep, I stand corrected. http://www.bloomberg.com/news/2014-01-3 ... -unit.html.
jwa
Posts: 219
Joined: Sat Aug 04, 2012 3:53 pm

Re: "The dangers of long-term care insurance"

Post by jwa »

dhodson wrote:Those same regulators approved the previous assumptions/pricing.

You do realize insurance companies have gone under in the past and this is without any of the ltci issues mentioned in this thread and some people have lost money?

I can't recall who posted it but a while back someone posted a link indicating that when insurance companies needed the state insur guaranty, clients were made whole 94% of time for annuities and 96% for insurance.

Obviously in these cases the regulators didn't prevent the problem from happening and couldn't make everyone whole. Why do you think this just can't happen for this type of insurance.

There is a problem in how you are looking at it. State Guaranty Funds are set up that carriers in that line of business have to contribute when another carrier has gone under. The name Guaranty Fund is a misnomer in that there isn't a pool of money set aside but that the other carriers in that line of business have to contribute AFTER a competing carrier has gone bankrupt.

Why is it important when I mention in that line of business? If I have an auto claim and my auto insurer just went under Northwestern Mutual could care less about the guaranty fund because they do not provide auto insurance. If a life insurance company goes under and now my annuity is at risk, GEICO could care less because they are not a provider of annuity products. Here is the danger as I see it. There are a very few number of insurors providing long term insurance these days which means each has a large book of business. If one goes under, how confident can we be the other long term insurors are going to be able to pony up to protect the policyholders of the now defunct company without putting themselves in danger of going under as well?

I would not buy a long term product if I take comfort in the fact that I would be taken care of if my long term care insuror just went bankrupt.
gdavidg
Posts: 5
Joined: Thu Feb 06, 2014 7:47 pm
Location: SW Washington State

Re: "The dangers of long-term care insurance"

Post by gdavidg »

I am on the fence on LTCi. Good info and interesting points made here. Looking into it for wife and I.

Premiums $4500/yr total for both wife and I, $130/day coverage, 4 years coverage/ 3% compounded inflation coverage, Genworth

Thinking of setting a $90K bucket to take annual payments out of if wife and I go ahead with LTCi.

Niece is CFP who has $275k of our assets managed and would sell us this policy. the policy rate is not guaranteed, it could go up as much as 50% if state insurance regulator allows it & if they charge all the LTC owners the same increase.

The fact that it could have huge increases in premiums without and increase in payout scares me. Our total invested assets are about $1.5 M, have rental house ($170K value, owe $18k), house ($260K value, free and clear) having a hard time deciding if to self insure.

if we self insured would set up say a bucket of $200k in VTSMX or something like that since time horizon is likely out many years.

Me 62 in March, wife 63 now.
dhodson
Posts: 4117
Joined: Mon May 24, 2010 3:03 pm

Re: "The dangers of long-term care insurance"

Post by dhodson »

jwa wrote:
dhodson wrote:Those same regulators approved the previous assumptions/pricing.

You do realize insurance companies have gone under in the past and this is without any of the ltci issues mentioned in this thread and some people have lost money?

I can't recall who posted it but a while back someone posted a link indicating that when insurance companies needed the state insur guaranty, clients were made whole 94% of time for annuities and 96% for insurance.

Obviously in these cases the regulators didn't prevent the problem from happening and couldn't make everyone whole. Why do you think this just can't happen for this type of insurance.

There is a problem in how you are looking at it. State Guaranty Funds are set up that carriers in that line of business have to contribute when another carrier has gone under. The name Guaranty Fund is a misnomer in that there isn't a pool of money set aside but that the other carriers in that line of business have to contribute AFTER a competing carrier has gone bankrupt.

Why is it important when I mention in that line of business? If I have an auto claim and my auto insurer just went under Northwestern Mutual could care less about the guaranty fund because they do not provide auto insurance. If a life insurance company goes under and now my annuity is at risk, GEICO could care less because they are not a provider of annuity products. Here is the danger as I see it. There are a very few number of insurors providing long term insurance these days which means each has a large book of business. If one goes under, how confident can we be the other long term insurors are going to be able to pony up to protect the policyholders of the now defunct company without putting themselves in danger of going under as well?

I would not buy a long term product if I take comfort in the fact that I would be taken care of if my long term care insuror just went bankrupt.
i understand and know all that. In fact thats why i personally think its more risky especially when you consider the limits of the guaranty assoc and the concentration of polices under so few companies.
drjazz
Posts: 60
Joined: Sun Mar 23, 2014 11:45 am

Re: "The dangers of long-term care insurance"

Post by drjazz »

An article in today's Barron's touted a product called Lincoln MoneyGuard; it appears to be a hybrid whole life/long term care policy; you pay a single premium and you're covered, so no worries about premium increases in the future. There is a death benefit and you/your estate get the premium back if you don't make a claim. You still are limited to a maximum dollar amount of coverage so it does not address the long tail nightmare of 20 years in a NH for Alzheimer's. I wholeheartedly agree with Browser that for many a policy with a long (eg one year) waiting period and no limit on duration of coverage on the back end would be much more useful; I'm not sure any such products are available. I googled Lincoln MoneyGuard and was directed to what appeared to be a wealth managers forum where there was a lot of chatter about the great commissions generated by sales of this product. It seems to me if one can afford to self insure the maximum payout of Lincoln Money Guard there is little reason to purchase it.
Another major limitation of most if not all LTC policies is the limitations on home care coverage. They will typically pay for in home services provided by a licensed agency/provider. This is critical fine print. In New Jersey, and I suspect other states, licensed home health care aides have severe restrictions on what they are allowed to do; for example they are not permitted to give the patient their medications (even pills!) The result is that the family either has to accept that and be available to give the meds or hire an unlicensed, "off the books" aide whose salary will not be covered by the insurance. Having lived through this process I can tell you it is not pleasant and at times frightening; if anyone wants the gory details you can pm me. With this in mind I think an old fashioned SPIA is a better option for those who can't afford to self insure because the policy holder gets cash and can spend it as he/she sees fit.
I think it's telling that most of the insurance companies who used to write this have left the market and the remaining ones are offering products that seem more designed to generate profit and limit their risks rather than address customer's real needs.
adamthesmythe
Posts: 5761
Joined: Mon Sep 22, 2014 4:47 pm

Re: "The dangers of long-term care insurance"

Post by adamthesmythe »

As I see it the main concern is having a need for a very long period in a nursing home (tail risk). My understanding is that if you have enough money for some time in a nursing home, and then run through all your assets, then Medicaid will pick up the cost after that point.

HOWEVER this means that you have spent down all your assets and a spouse would not have much left.

I have read (see http://www.nolo.com/legal-encyclopedia/ ... anning.htm) that one can buy a spouse a single-premium annuity to provide some income. There are some restrictions (see the article). Note that this is not an attempt to hide assets from Medicaid (which is illegal, in addition to unethical).

Provided you do not feel the need to provide an inheritance to other heirs, this seems to be a reasonable way to manage tail risk.

Comments??
dhodson
Posts: 4117
Joined: Mon May 24, 2010 3:03 pm

Re: "The dangers of long-term care insurance"

Post by dhodson »

There is no problem with that assuming you have a large enough stash to buy a large SPIA.

one difference with LTCi, you are parting with a lower sum of money
jebmke
Posts: 25271
Joined: Thu Apr 05, 2007 2:44 pm
Location: Delmarva Peninsula

Re: "The dangers of long-term care insurance"

Post by jebmke »

adamthesmythe wrote:Provided you do not feel the need to provide an inheritance to other heirs, this seems to be a reasonable way to manage tail risk.
So is a lawn chair and a bottle of tequila at low tide.
Stay hydrated; don't sweat the small stuff
User avatar
Steelersfan
Posts: 4125
Joined: Thu Jun 19, 2008 8:47 pm

Re: "The dangers of long-term care insurance"

Post by Steelersfan »

More bad news for Genworth, the largest provider of LTC insurance. Those who have solid, old contracts may not suffer too much, but newer policies are going to be less attractive.


The financial security company reported a loss of $844 million yesterday, driven by costs tied to its long-term care insurance operation, according to Bloomberg, adding that CEO Tom McInerney apologized today for his prior remarks about the business.

"The turnaround in this business will be more difficult and prolonged," McInerney said, adding, "Despite this setback, we remain steadfast in our commitment to transform this business."


http://www.thestreet.com/story/12944049 ... -miss.html

And:

Standard & Poor’s Ratings Services lowered the company’s long-term counterparty credit and senior unsecured debt ratings into junk-grade territory Friday, dropping it to “BB+” from “BBB-.” The rating agency also lowered its financial strength ratings on its life insurance subsidiaries. S&P said its outlook on Genworth is negative, which means it could be downgraded again soon.

http://www.timesdispatch.com/business/l ... b2370.html
LongerPrimer
Posts: 903
Joined: Thu Jun 05, 2014 10:01 pm

Re: "The dangers of long-term care insurance"

Post by LongerPrimer »

we have LTCi. now 12 years. Current ages 64/67. We believed in the projections. We believed in achieving our retirement goals AND dying with a small estate. I dont believe in supporting those who could ' ve and should've done the possible.

when we bought the look back was 3 years. A few years later it changed 5 years. Anyone want to make a future projection?

OP states the possible risks in owning. Understand the possible risks on the obverse side. :| :annoyed
Alan S.
Posts: 12629
Joined: Mon May 16, 2011 6:07 pm
Location: Prescott, AZ

Re: "The dangers of long-term care insurance"

Post by Alan S. »

The LTC market has never been healthy and from the outset suffered from overly optimistic claims and earnings projections. And the trend is definitely in the wrong direction, as illustrated by the Genworth announcement. I would describe the current market for LTC as somewhere between unhealthy and dysfunctional.

The first effect of this is that the financial assets range of recommended buyers begins to restrict. On the lower assets range are those who would end up on Medicaid fairly quickly without coverage, and on the higher end are those who have sufficient assets to self insure the exposure. This range would now be the smallest in breadth that it has been since LTC insurance was heavily marketed. Underwriting restrictions and price increases will continue to shrink this range until it disappears.

That said, if you already have a policy you need to determine the risks of continued premium increases along with the financial health of the insurer, and should explore the options provided should you stop paying premiums. It could be that a combination of paid up insurance and self insurance is the better option than investing more premiums. And if you do not presently have coverage, the situation is simpler. Do not purchase a policy until the market has stabilized for at least 5 years, and for many the added age purchase point will have long passed by the time the market stabilizes, if ever. One open question in all this is whether there will be any govt bailouts in some form to keep insurers from abandoning the market altogether. As you know, the LTC provision attached to the ACA was doomed from the start and never got off the ground.

In it's current form, LTC insurance should generally be avoided. But the exposure is not going away, so planning and most likely saving is needed for those that can.
bluemarlin08
Posts: 1561
Joined: Wed Aug 29, 2007 12:18 pm

Re: "The dangers of long-term care insurance"

Post by bluemarlin08 »

From an agents perspective, this recent financial announcement from the largest player in the industry is very disturbing. It seems their earnings projections, length of claims projections and lapse projections just might be too much to overcome without large rate increases. Rates are pricing many folks out of the market so revenues will decline and a death spiral could happen. Without insurance as an option there will be more pressure on an unhealthy entity like medicaid.
dhodson
Posts: 4117
Joined: Mon May 24, 2010 3:03 pm

Re: "The dangers of long-term care insurance"

Post by dhodson »

If I'm not mistaken, today they announced suspension of sales in 2 states.
User avatar
baw703916
Posts: 6681
Joined: Sun Apr 01, 2007 1:10 pm
Location: Seattle

Re: "The dangers of long-term care insurance"

Post by baw703916 »

Piling on here:

http://www.bloomberg.com/news/2014-11-1 ... s-ceo.html
an analyst wrote:Our preference would be for Genworth to put LTC into runoff in a closed block.
Most of my posts assume no behavioral errors.
JustCurious304
Posts: 49
Joined: Thu Sep 25, 2014 4:35 pm

Re: "The dangers of long-term care insurance"

Post by JustCurious304 »

Another "danger" is trying to collect on long-term care insurance. I had an elderly relative in assisted living who had dementia, but not Alzheimer's. He didn't quite fit the being deficient in the required number of daily living skills either, in John Hancock's opinion. I now regret buying my CalPERS policy and did not opt to pay almost double in premiums to keep the inflation protection which would have started next year.
skepticalobserver
Posts: 1115
Joined: Tue Jul 29, 2014 11:29 am

Re: "The dangers of long-term care insurance"

Post by skepticalobserver »

Genworth, a big LTC player, has recently had its bonds downgraded to junk. The story goes that their LTC business is worthless. Apparently, bad underwriting is the cause. I wonder how much of it was bait and switch—they kept raising the premiums.

Also, Genworth policies were very popular with the salesman. Anybody know what the commission structure is?
User avatar
Steelersfan
Posts: 4125
Joined: Thu Jun 19, 2008 8:47 pm

Re: "The dangers of long-term care insurance"

Post by Steelersfan »

skepticalobserver wrote:Genworth, a big LTC player, has recently had its bonds downgraded to junk. The story goes that their LTC business is worthless. Apparently, bad underwriting is the cause. I wonder how much of it was bait and switch—they kept raising the premiums.

Also, Genworth policies were very popular with the salesman. Anybody know what the commission structure is?
I doubt if their commission structure is any diferent than other financial products sold to individuals.

Genworth, and the other LTC players, just fell victim to bad assumptions by their actuaries about how long people would live after qualifying for LTC (longer), how many people would drop coverage over the years before using their LTC policy (less), and how fast long term care costs would rise (more).

So now they've got this boat anchor of old policies that is dragging them down.

And having better estimates of current and future trends for those three things, new policy offerings that are priced too high for most people to afford them.
dhodson
Posts: 4117
Joined: Mon May 24, 2010 3:03 pm

Re: "The dangers of long-term care insurance"

Post by dhodson »

Steelersfan wrote:
skepticalobserver wrote:Genworth, a big LTC player, has recently had its bonds downgraded to junk. The story goes that their LTC business is worthless. Apparently, bad underwriting is the cause. I wonder how much of it was bait and switch—they kept raising the premiums.

Also, Genworth policies were very popular with the salesman. Anybody know what the commission structure is?
I doubt if their commission structure is any diferent than other financial products sold to individuals.

Genworth, and the other LTC players, just fell victim to bad assumptions by their actuaries about how long people would live after qualifying for LTC (longer), how many people would drop coverage over the years before using their LTC policy (less), and how fast long term care costs would rise (more).

So now they've got this boat anchor of old policies that is dragging them down.

And having better estimates of current and future trends for those three things, new policy offerings that are priced too high for most people to afford them.
The cost of the care isnt an issue though, most of these polices already have fixed benefit amounts. What is an issue is that they also made bad assumptions regarding interest rates for their investments.
User avatar
Topic Author
Taylor Larimore
Posts: 32839
Joined: Tue Feb 27, 2007 7:09 pm
Location: Miami FL

Premiums can be raised on long-term care policies.

Post by Taylor Larimore »

So now they've got this boat anchor of old policies that is dragging them down.
Bogleheads:

I don't understand why Genworth's long-term care policies are "dragging them down."

It is my understanding that long-term care policies have a clause in their contracts allowing them to raise future premiums if necessary.

Can anyone explain Genworth's difficulty?

I own, and receive income, from a Genworth single-premium immediate annuity (SPIA).

Thank you and best wishes.
Taylor
"Simplicity is the master key to financial success." -- Jack Bogle
dhodson
Posts: 4117
Joined: Mon May 24, 2010 3:03 pm

Re: "The dangers of long-term care insurance"

Post by dhodson »

There are several reasons but not all states have approved the rate increases and when they do increase rates there seems to be a selection issue where healthier people are more likely to drop the policy which further puts their assumptions out of whack. All these companies need new money as well to keep operating but I imagine sales are tougher with all the negative press.
User avatar
baw703916
Posts: 6681
Joined: Sun Apr 01, 2007 1:10 pm
Location: Seattle

Re: "The dangers of long-term care insurance"

Post by baw703916 »

Taylor,

Just to be clear, the analyst's report that I linked above (and we should apply all the usual caveats about analysts) doesn't say that Genworth as a whole is financially shaky, but rather that their LTC insurance book is "worthless" meaning the total value of the company would be the same if it didn't exist.

I do wonder if a lot of the problems of the insurance industry have to do with bond interest rates being so low, that insurance companies' investments (consisting largely of bonds) have meager earnings.
Most of my posts assume no behavioral errors.
gerrym51
Posts: 1679
Joined: Sat Apr 27, 2013 1:44 pm

Re: "The dangers of long-term care insurance"

Post by gerrym51 »

My state is one of the 3 states that has refused genworths requests to up premiums for old policies.from what i have been able to learn these are policies prior to 2003.

we bought ours in late 2003. we have never had an increase .

I have watched GE then Genworth over the years because we own the policies-obviously.

the usual -modus operandi- for them all over the country is to create a new product-not as good as past policies-give it a fancy name and jack up the prices for them.

it's only a recent development -say in the last 4 years-for them to ask for increases on old policies.

they are the largest by far seller of LTC-i did not say they are the largest company overall.

since they sell so many policies they put pressure on a state to give them increases by suspending sales of new policies in a certain state. they've done it before-and i'm sure they will do it again.

i'm sure at some point my state-massachusetts-will come to some agreement with them and begin selling them again here.
skepticalobserver
Posts: 1115
Joined: Tue Jul 29, 2014 11:29 am

Re: "The dangers of long-term care insurance"

Post by skepticalobserver »

The costs of LTC have been sharply trending upwards for sometime. Where were Genworths’ underwriters? Was GNW hoping to make up in sales what they lost in profits? This doesn't pass the smell test. You can't blame this all on low interest rates.

Note GNW is headed back into penny stock territory.

I hope the state insurance funds don’t get stuck with these policies.
dhodson
Posts: 4117
Joined: Mon May 24, 2010 3:03 pm

Re: "The dangers of long-term care insurance"

Post by dhodson »

Neither state nor federal money is used with the state guaranty association.

These polices have daily limits on what they pay so it wouldn't matter if health care skyrocketed (at least beyond the inflation rider offered).

Yes the interest rate matters bc they invest very conservatively. If they could make 20% on their investments going forward instead of where things have gone then much of the problem would likely disappear if not get better.
gerrym51
Posts: 1679
Joined: Sat Apr 27, 2013 1:44 pm

Re: "The dangers of long-term care insurance"

Post by gerrym51 »

I think people are misinterpreting this. Genwoth stock is not valueless and they have plenty of money. what they have said is that the LTC division is basically valuless to future profits because they don't make enough profits in that division.

they are far from poor.
Leesbro63
Posts: 10581
Joined: Mon Nov 08, 2010 3:36 pm

Re: "The dangers of long-term care insurance"

Post by Leesbro63 »

So, based on what we know, are Genworth annuitants currently at greater-than-usual risk or is the LTC division "lockboxed" from the other Genworth divisions (including annuities)?
gerrym51
Posts: 1679
Joined: Sat Apr 27, 2013 1:44 pm

Re: "The dangers of long-term care insurance"

Post by gerrym51 »

genworth could still go bankrupt-but it would be because all their other business went bankrupt at the same time. the LTC division is not lockboxed. if a company go es belly up the government assigns the policies to another provider and payments go to them. in these cases rates can sometimes go up

However other big companies have gotten out of selling 'new policies". they still cover and service people who have already bought plans.

what does happen is that if they do this no new money is coming into the ltc part of a company. they have to finance from other parts.

because ltc insurance is not a growth industry and big companies can't make money on it some of them write off the value of the divisions and then as time goes by fewer and fewer people are left holding policies.

eventually company is totally out of it.

as a company gets out of it they sometimes hire companies that are still running LTC to service their remaining clients.

the people who want to get LTC coverage are the ones who now have fewer providers and higher prices to pick from
skepticalobserver
Posts: 1115
Joined: Tue Jul 29, 2014 11:29 am

Re: "The dangers of long-term care insurance"

Post by skepticalobserver »

Yes, state insurance funds are not state funds, so to speak. For the most part they are quasi-public entities, walled-off from state treasuries. And that’s a problem--how much of a hit can these funds take?

As to GNW’s value, the analysts always put a good spin on things; otherwise they’d be looking for work. Bloomberg’s take on GNW: http://www.bloomberg.com/news/2014-11-1 ... s-ceo.html
dhodson
Posts: 4117
Joined: Mon May 24, 2010 3:03 pm

Re: "The dangers of long-term care insurance"

Post by dhodson »

There really aren't any funds. They have the power to get the other solvent companies to pony up at least up to the limits. One of the problems with a big company having problems is that there aren't a bunch of other strong ltci companies to bail them out if necessary.

Nobody knows what will or wont happen IF genworth went south. It would be uncharted territory. I personally wouldn't worry about any policy below the state guaranty limits (for annuities as mentioned). Above the limits, I personally would be hesitant to purchase one but I wouldn't lose a lot of sleep IF I had one. My guess is that they would spin the ltci business off similar to what GE did to them.
Leesbro63
Posts: 10581
Joined: Mon Nov 08, 2010 3:36 pm

Re: "The dangers of long-term care insurance"

Post by Leesbro63 »

For people who bought policies years ago before GENWORTH was separate from GE...isn't this a kind of fraud? People bought GE policies with the expectation that the full faith and credit of GE was behind it. Then it got spun off and now something much less strong than GE is behind it. Of course many of us have seen these insurance footsie games before. But seriously, isn't there some sort of consumer protection that the the deep pocket who you pay more for will continue to be a deep pocket years later into the policy ownership?
Post Reply