Genworth Long Term Care

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jim3
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Genworth Long Term Care

Post by jim3 » Tue May 02, 2017 2:18 pm

I have a Genworth long term care policy that I have been paying into for 20 years.They are raising my premium by 10%, which I can afford. But am I putting bad money into bad money because of their deteriorating financial condition.Thanks

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nedsaid
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Re: Genworth Long Term Care

Post by nedsaid » Tue May 02, 2017 2:23 pm

My broker told me that Genworth is being purchased by a Chinese firm. The deal should close in the second quarter of this year. Not sure how this will affect your long term policy. I am a shareholder of Genworth.

Long term care policies suffered from a triple whammy: low interest rates, fewer people than expected dropping their policies, and people living longer. That is why I didn't buy in, I felt that the insurance industry didn't price these correctly in the first place and I didn't want to get faced with big premium increases at a time I could least afford it.

Can't give advice on your particular situation, whether you should hang on to your policy or not.
A fool and his money are good for business.

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Artful Dodger
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Re: Genworth Long Term Care

Post by Artful Dodger » Tue May 02, 2017 3:33 pm

I agree the ratings are not great. Nedsaid gave the reasons for the problems. Many companies have quit selling coverage altogether, and raised rates too. If they were to go under, and i don't think we are alnywhere close yet, the standard procedure would be for the state's departments of insurance to step in and assign the policies to other carriers in the market. As a last resort they would be covered by your states' guarantee fund. If the China deal goes through, we could see a ratings upgrade which would at least restore some confidence.

Genworth can work through this, but will need some rate increases. I am in the same situation, and have compared my current plan to what it would cost me now to buy another policy, and would pay up to 50% more than I'm paying now.

My brother just went through a LTC claim with Genworth for his wife, and everything went through fine. I worked with them 12 years ago (when they were still GE capital) and had no problems. I see the need, and will continue.

Dottie57
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Re: Genworth Long Term Care

Post by Dottie57 » Tue May 02, 2017 3:48 pm

Artful Dodger wrote:I agree the ratings are not great. Nedsaid gave the reasons for the problems. Many companies have quit selling coverage altogether, and raised rates too. If they were to go under, and i don't think we are alnywhere close yet, the standard procedure would be for the state's departments of insurance to step in and assign the policies to other carriers in the market. As a last resort they would be covered by your states' guarantee fund. If the China deal goes through, we could see a ratings upgrade which would at least restore some confidence.

Genworth can work through this, but will need some rate increases. I am in the same situation, and have compared my current plan to what it would cost me now to buy another policy, and would pay up to 50% more than I'm paying now.

My brother just went through a LTC claim with Genworth for his wife, and everything went through fine. I worked with them 12 years ago (when they were still GE capital) and had no problems. I see the need, and will continue.
I hope Genworth survives. I have LTC policy. It will help if I need to go to nursing home. It won't pay. for all, but it will pay for 3 years.

IowaFarmBoy
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Re: Genworth Long Term Care

Post by IowaFarmBoy » Tue May 02, 2017 6:12 pm

I've got one with Genworth, too, and have been apprehensively watching the situation. Ours is about 10 years old (purchased at age 48) and no increases yet. We just paid our annual premium so we are good for another year. I suspect the policyholder's state may make a difference since I think the rate increase would need to be approved by the state insurance commission. We are in Illinois.

I'm expecting an increase at some point and we'll have to see what our options are at that point. If we are offered a reasonable level of reduced coverage for the same cost, I think we will go that route. Our ability to fund LTC ourselves improves as time goes by- more money put away and less years at risk. When I did the initial analysis, one of the motivating factors for me was how much an early and extended long term care need could derail our retirement plans. I felt like at 85, we could handle whatever LTC we needed but if one of us developed a severe problem in our mid 50's, it could be a real problem.

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sergeant
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Re: Genworth Long Term Care

Post by sergeant » Wed May 03, 2017 1:58 am

IowaFarmBoy wrote:I've got one with Genworth, too, and have been apprehensively watching the situation. Ours is about 10 years old (purchased at age 48) and no increases yet. We just paid our annual premium so we are good for another year. I suspect the policyholder's state may make a difference since I think the rate increase would need to be approved by the state insurance commission. We are in Illinois.

I'm expecting an increase at some point and we'll have to see what our options are at that point. If we are offered a reasonable level of reduced coverage for the same cost, I think we will go that route. Our ability to fund LTC ourselves improves as time goes by- more money put away and less years at risk. When I did the initial analysis, one of the motivating factors for me was how much an early and extended long term care need could derail our retirement plans. I felt like at 85, we could handle whatever LTC we needed but if one of us developed a severe problem in our mid 50's, it could be a real problem.
Excellent post. I rarely see people write about LTC as clearly as you just did. OP, you haven't thrown any money away. If you would have needed the care the LTC policy would have provided a benefit. I didn't throw money away the last 25 years on my home insurance just because my house didn't burn down. I don't know enough about your financial situation to make any recommendation on if you should continue with your policy.
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rgs92
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Re: Genworth Long Term Care

Post by rgs92 » Wed May 03, 2017 5:21 am

I don't understand how these companies can increase the premiums. I got a John Hancock policy 15 years ago through work and the premiums can't go up w/o my permission (to buy extra coverage). And the coverage terms are fixed. I don't think I would have bought the policy if the premiums were open ended. That would be like an adjustable rate mortgage but even worse.

nova1968
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Re: Genworth Long Term Care

Post by nova1968 » Wed May 03, 2017 9:18 am

The Purchase of LTC is a debatable issue. My take is the if you have a 400K plus house paid for and you are not planning on leaving a substantial amount to heirs its a risk worth taking. Especially with the increase in rates and uncertainty. If you end up with Alzheimer's disease or are confined to a nursing home you probably unlikely to enjoy the benefits of your assets anyways. Travel, Restaurants, Cars, Sporting events, Recreation Etc. are not likely to be pursued.

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jazman12
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Re: Genworth Long Term Care

Post by jazman12 » Wed May 03, 2017 9:25 am

jim3 wrote:I have a Genworth long term care policy that I have been paying into for 20 years.They are raising my premium by 10%, which I can afford. But am I putting bad money into bad money because of their deteriorating financial condition.Thanks
If you can afford to fund LTC then self fund it now. Cost of LTC is astronomical if it is needed for an extended period of time. I'm paying over 200/day for my dad who could require care for a long period of time. Any subsidized amount would allow us to extend his care.
Act soon... time is running out

Dinosaur Dad
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Location: Connecticut

Re: Genworth Long Term Care

Post by Dinosaur Dad » Wed May 03, 2017 9:27 am

I'm trying to figure out the LTC issue also. Experience with my mother, who had a protracted illness from age 76 to her death at 87, showed me how it certainly can help (she had a policy with Travelers that paid for in-home care).

But in reading this forum, it's very much a process of identifying how much risk you have and your financial situation...it's really like any other insurance in that way. In my case, I'm looking at setting aside a block of investments dedicated to provide long-term care, with the hope that I won't need this money for a while (I'm 60). But that also means that I'm accepting the risks of medical care inflation, investment return, etc. And if I did in fact suffer a protracted illness like my mom, that's a bit of a scary proposition, although as others have noted, other expenses will go down at that point. I've also read somewhere the the average stay in a nursing home is 2-4 years.


here's a good article on the subject:

https://www.forbes.com/sites/wadepfau/2 ... 33e0954ceb
"Take calculated risks - that is quite different from being rash." | General George S. Patton

mrc
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Re: Genworth Long Term Care

Post by mrc » Wed May 03, 2017 9:48 am

IowaFarmBoy nails it for us too. My spouse and I bought policies with Genworth in 2003 (ages 43/52). Coverage is very good from what I understand — much better than can be found now. In Maryland, LTC premium increases are capped at 15%. Our premiums didn't change for 12 years. Then, in 2015, 2016, and 2017 rose 15% each year. I anticipate that will continue. The premiums remain affordable for now, but may become too high at some point. Looking back, since 2003, with a LTD and LTC policy in effect, we slept well. We know now one of us won't need long term care at age 55, perhaps for 30 years.

Going forward, we're willing to take our chances with Genworth's solvency and ability/willingness to pay claims. We would likely accept more limited benefits to keep premiums in line before outright dropping the policy. For now our piece of mind having the policies in place are greater than middle-of-the-night thoughts that Genworth wouldn't (or couldn't) honor a claim.

I am glad we got in when we did, because it's not an easy decision now. Looking back, we were protected from a devastating loss during our most vulnerable asset accumulation time. If we had to drop tomorrow, it would still be money well spent.
If it’s not long term it’s small talk

Limoncello402
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Re: Genworth Long Term Care

Post by Limoncello402 » Wed May 03, 2017 4:28 pm

I'm in the same position. My Genworth policy has gone up 43% in the seven years I've held it, with my current renewal $3400. I'm 60. It is a generous policy and I've been happy to have it up to now, but with the recent increase I don't know whether to continue, drop it all together, or cut back on what it covers. I created a chart that projects an 8% annual premium hike, a 10%, and a 15% just to see the kind of premiums I'll be paying at age 70, 80, 85. It is eye opening for sure! For example, keeping my current coverage and assuming an 8% yearly premium rise (not at all unlikely) I will be paying $6800. at age 70, $14,702. at age 80, and $21,600 at age 85. Given the state of LTC, I think premiums could rise much more.

I didn't realize until this year that paying LTC premiums would be a big part of my retirement budget, up there with health care insurance and property taxes. Of course, my 5% compound policy means that even as I pay these big premiums my coverage remains generous. Still, with the assumption of an 8% annual increase, I would have paid nearly $268,000. in total premiums to Genworth by the time I'm 75. That's a lot of money for something I may never need to use.

I honestly don't know what to do. I keep going back and forth on this. My premium is not due for another month, so I am reading all I can.

Gigihsu
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Should I keep or cancel my Genworth Long Term Care Insurance?

Post by Gigihsu » Fri Mar 09, 2018 3:49 am

My employer offers group LTC insurance through Genworth. I just received a letter from Genworth regarding increasing the coverage. Right now my daily benefit amount is $200. With a 20% increase in premium, the daily benefit amount will be increased to $232.

I am 44-year-old.

I don't have to accept the coverage increase. My coverage will stay the same. However, if I reject two consecutive offers, I won't be eligible for future benefit increases. I already declined the coverage increase once a couple of year ago. If I don't accept the premium/coverage increase now, I can't increase it later, and the policy will be useless anyway.

Most importantly, I am very concerned about Genworth's financial health and its pending sale to a China real estate firm. I don't have confidence in Genworth.

I've been paying for LTC insurance for the past 8 years. If I cancel the policy, I can't never get the premium back. However, should I consider it lesson learned and not keeping Genworth LTC?

ny_knicks
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Re: Genworth Long Term Care

Post by ny_knicks » Sat Mar 10, 2018 12:57 am

LTC insurance market is a complete failure. These policies aren't profitable for insurance companies and they would love to get them off their books. Problem is they can't. No one will buy them.

I would bet there will continue to be substantial rate increases year over year. As more people drop coverage the model becomes even less sustainable.

Not sure what I would do but if you're in reasonable health and can see the writing on the wall that in 3-5 years it will be too expensive to continue paying the premiums I would probably take my chances and drop it now.

Jackson12
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Re: Genworth Long Term Care

Post by Jackson12 » Sat Mar 10, 2018 1:17 am

rgs92 wrote:
Wed May 03, 2017 5:21 am
I don't understand how these companies can increase the premiums. I got a John Hancock policy 15 years ago through work and the premiums can't go up w/o my permission (to buy extra coverage). And the coverage terms are fixed. I don't think I would have bought the policy if the premiums were open ended. That would be like an adjustable rate mortgage but even worse.
Many John Hancock policy premiums can't go up for a single individual ( you) without your permission but can go up for a class of policyholders. Are you sure your policy premiums can't rise rise for your specific class of policyholders?
Perhaps buying through your employer gave you special provisions. If so, you're indeed fortunate.

Jackson12
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Re: Genworth Long Term Care

Post by Jackson12 » Sat Mar 10, 2018 1:30 am

If.a ltc imsursnce compny goes bust, each state has a guaranty association and the insurance regulator in the company’s home state steps in. .

. If the company is liquidated, then the guaranty association coverage would kick in. All states provide at least $300,000 in coverage for long-term-care insurance, and some states have higher limits (see www.nolhga.com NOLHGA.com for links to each state’s guaranty association). You’ll receive benefits from the guaranty association as you would from the insurer, up to your state’s limits.

I called the department at our state's insurance commissioner's office whuch oversees ltc policies, appproves or denies requests for premium increases, etc. I was told that policyholder who purchased Genworth policies in a specific state was protected by that state's guaranty coverage.

If the policyholder moved to a new state, the policy guarantee is covered by the state guaranty in the state where the policy was originally purchased

I did not ask about what happens if a Chinese company purchases a Ltc company based in the United States.
https://www.kiplinger.com/article/insur ... iness.html

Gigihsu
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Re: Genworth Long Term Care

Post by Gigihsu » Sat Mar 10, 2018 8:02 pm

Thanks for all the replies, and all the useful information on the guaranty associations.

I think my current rate (with the current coverage) is locked for several more years accordingly to our group policy.

I am trying to decide whether to accept the coverage increase. Right now the benefit amount is $200 per day. To increase it to $232, I will have to pay 20% more in premium. If I don't accept the new term now, there won't be future benefit increase.

I think $200 won't go far in the future although I don't really want to pay 20% more now (44-year-old). On the other hand, keep paying for a policy that I feel is worthless is not wise either.

How much daily benefit amount is appropriate for LTC?

R. ANDERSON
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Re: Genworth Long Term Care

Post by R. ANDERSON » Sun Mar 11, 2018 10:30 am

The March 2018 edition of AARP Magazine reports that 48% of people 65 years old and older will spend less than one year for paid care and 19% more will need it for 1 to 1.99 years. Source: U.S. Dept. of Health and Human Services. Average cost of a year in a nursing home in a semi-private room is $85,800 with TX being lowest at $54,800 and CT being $150,200. Source: Genworth. 63% will spend $0 in life time out of pocket long term care expenditures. 13% more will spend from $1 to $50,000. Source Dept. of Health and Human Services. In the nineties more than 100 insurers sold these LTC policies. Now, only 15 do. Seems appropriate to put "some" money aside for your care or that of a family member. The March 2018 edition of AARP Magazine has the entire article titled: 5 Things You Should Know About Long Term Care Insurance.

Jackson12
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Re: Genworth Long Term Care

Post by Jackson12 » Sun Mar 11, 2018 12:10 pm

Gigihsu wrote:
Sat Mar 10, 2018 8:02 pm
Thanks for all the replies, and all the useful information on the guaranty associations.

I think my current rate (with the current coverage) is locked for several more years accordingly to our group policy.

I am trying to decide whether to accept the coverage increase. Right now the benefit amount is $200 per day. To increase it to $232, I will have to pay 20% more in premium. If I don't accept the new term now, there won't be future benefit increase.

I think $200 won't go far in the future although I don't really want to pay 20% more now (44-year-old). On the other hand, keep paying for a policy that I feel is worthless is not wise either.

How much daily benefit amount is appropriate for LTC?
In my area, a nursibg home runs about $90,000 a year, semi- private room, decent care. So $200 a day would certainly be a big help. Isn't there an inflation rider on your coverage ? A certain annual percentage increase in benefits?

Dottie57
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Re: Genworth Long Term Care

Post by Dottie57 » Sun Mar 11, 2018 2:06 pm

Dottie57 wrote:
Tue May 02, 2017 3:48 pm
Artful Dodger wrote:I agree the ratings are not great. Nedsaid gave the reasons for the problems. Many companies have quit selling coverage altogether, and raised rates too. If they were to go under, and i don't think we are alnywhere close yet, the standard procedure would be for the state's departments of insurance to step in and assign the policies to other carriers in the market. As a last resort they would be covered by your states' guarantee fund. If the China deal goes through, we could see a ratings upgrade which would at least restore some confidence.

Genworth can work through this, but will need some rate increases. I am in the same situation, and have compared my current plan to what it would cost me now to buy another policy, and would pay up to 50% more than I'm paying now.

My brother just went through a LTC claim with Genworth for his wife, and everything went through fine. I worked with them 12 years ago (when they were still GE capital) and had no problems. I see the need, and will continue.
I hope Genworth survives. I have LTC policy. It will help if I need to go to nursing home. It won't pay. for all, but it will pay for 3 years.
I have a Genworth policy too. Limited to a total dollar amount and a daily max. The policy is not cheap but I can afford it. Hope I don't have to use it .

Gigihsu
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Joined: Tue Apr 03, 2007 4:35 pm

Re: Genworth Long Term Care

Post by Gigihsu » Sun Mar 11, 2018 3:56 pm

Jackson12 wrote:
Sun Mar 11, 2018 12:10 pm

In my area, a nursibg home runs about $90,000 a year, semi- private room, decent care. So $200 a day would certainly be a big help. Isn't there an inflation rider on your coverage ? A certain annual percentage increase in benefits?
My policy doesn't have an inflation rider or a built-in annual increase. I'm concerned that I might be stuck with the $200 coverage if I don't increase the coverage now.

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Chicken lady
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Re: Genworth Long Term Care

Post by Chicken lady » Sun Mar 11, 2018 5:02 pm

Both my husband and I have LTC insurance with Genworth. I've read all these LTC links and conclude that if the insurance helps you sleep at night and you can afford it, then it's worth it. For us, we both watched and cared for parents with dementia - each parent lived to be quite old (80+) so for us, it's a bet that one or both of us might need to use the insurance at some point.

I wish I had a crystal ball - we concluded that we could probably pay for 1/2 of in-home care privately. Since we know the type and intensity of care each of our parents needed as their condition deteriorated, we are fairly clear eyed about the potential costs (adjusted for inflation over time).

We pay insurance for cars, our home, a business and some rental property. Though I'm not thrilled about the cost to insure these properties, I would never drop the insurance because I didn't think I would be able to recoup my money via the claims process. Having that insurance helps me sleep at night - for me, LTC insurance is not different. It's insuring against the odds that you need to use it.

IowaFarmBoy
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Re: Genworth Long Term Care

Post by IowaFarmBoy » Sun Mar 11, 2018 6:16 pm

Well, we finally got our long expected premium increase notice from Genworth. I thought I would share to help build the group knowledge. As I mentioned in a previous post, when we purchased I really worked to make this insurance against catastrophic costs- I went with the longest elimination I could get at the time and went pretty long on the years of benefits.

Current Policy:
Purchased 12 years ago at age 48. Premium has been $1696 annually. Sunk opportunity cost of $28, 246 at 5% return.
Daily benefit started at $150, has grown to $269 with 5% annual increase.
8 years of total benefits that can be used by either my wife or I in any combination.
1 year elimination period so there is a significant chance we will never need to use.
Waiver of premium when benefits are being paid.

Options: (all have 5% annual benefit increase and same provisions except amount and duration)
Current Policy: Benefits unchanged, cost goes to $2570 annually. 50.1% increase.
Option A: Daily benefit drops to $222, cost goes to 2124.
Option B: Daily benefit drops to $226, years drops to 4. Cost drops to 1687.
Option C: Daily benefit drops to $104, cost drops to 993.

What am I going to do?
We are 60 now. Plan to work another 3-5 years. Will have defined benefit pension and SS that should allow us to maintain current standard of living in retirement. We have significant retirement savings that we really shouldn't have to touch other than inflation, unexpected medical costs and splurges. So we have quite a bit of capability to self fund.

As I mentioned before, one of my big concerns is that if one of us needed care soon for an extended period, it could significantly deplete our savings at the beginning of a potentially long retirement. In 10-20 years, I shouldn't be as concerned about this.

I looked at some numbers comparing premiums to potential total benefit payout. Assuming we use all 8 years of care, I took a look at starting benefits at 61, at 80 and at 90. I calculated an opportunity cost of the premiums assuming a 5% return on investments. I have a chart for all the options but I couldn't figure out how to get it into a post cleanly so I am only showing the current plan.

For the current plan:
Drawing at 61: Opportunity cost of premium 2698, Max benefit 938,903.
Drawing at 80: Opportunity cost of premium 89,238, Max benefit 2,491,191.
Drawing at 90: Opportunity cost of premium 179,303, Max benefit 4,057,888.

At this point, I am leaning either toward staying with the current plan or going with A. We plan to keep something. I am able to transfer a lot of risk ( roughly $1M in today's dollars) for not really that much premium. We can afford the premium without jeopardizing other goals. The total opportunity cost at 90 is still only half to three-fourths of the projected cost for a year of care at that point so it doesn't feel like it is that expensive. I'm not crazy about the increase but it seems like this is the best option for us at this point.

The unknown in all this is what will happen to premiums in the future but we can adjust as that happens. I also haven't factored in the potential tax savings for deducting LTC costs if we were to pay them out of pocket but I would guess that would net somewhere around 20% in savings.

Gigihsu
Posts: 59
Joined: Tue Apr 03, 2007 4:35 pm

Re: Genworth Long Term Care

Post by Gigihsu » Tue Mar 13, 2018 10:49 am

Jackson12 wrote:
Sat Mar 10, 2018 1:30 am
If.a ltc imsursnce compny goes bust, each state has a guaranty association and the insurance regulator in the company’s home state steps in. .

. If the company is liquidated, then the guaranty association coverage would kick in. All states provide at least $300,000 in coverage for long-term-care insurance, and some states have higher limits (see www.nolhga.com NOLHGA.com for links to each state’s guaranty association). You’ll receive benefits from the guaranty association as you would from the insurer, up to your state’s limits.
I am reading up the materials from my state's department of insurance. I understand they definitely protect the people who are currently receiving the benefits. What if Genworth goes bust while we are not receiving the benefit but have been paying the premium for all these years?

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