Financial Advice for Retirement, Social Security, IRAs and Estate Planning

Turmoil in Long-Term Care Insurance

Published on: Oct 02 2010

Last month John Hancock announced substantial premium increases on existing policies, with increases averaging 40%. Hancock attributed the increases to unanticipated longer life expectancies and higher-than-anticipated claims. Hancock expects the increases to go in effect in January 2011. But at least some insurance analysts disagree. They say key states (Florida, California, New York) are not likely to approve the full increase. The result would be reduced earnings for Hancock and its parent company, Manulife. But the companies won’t be at risk.

Hancock increased individual policy rates two years ago but otherwise hasn’t increased rates on existing policies, say insurance industry sources.

The Hancock move is consistent with actions taken by other LTC insurers. Claims and life expectancies are higher than were priced into the policies. Some insurers are dropping out of the market.

More details here.



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