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Genworth LTC Dilemma – What should your client do?

Genworth Special Report – What should your client do?

Genworth Financial continues to struggle and the outlook is even gloomier than before.  Many Genworth long-term care policyholders are very concerned.  Genworth continues to apply for price increases across the nation and are also offering clients the opportunity to lower their benefits to keep premiums at a reasonable level.  A recent report provides more insight to their struggles and outlook. 
Genworth – Special Report

What should your client do?

This is a very tough question to answer and of course “it depends” is the largest part of the equation.  If your client is healthy, they can look at other options, but they are unlikely to find a better value when comparing price vs. benefit with other traditional LTCi carriers.  Earlier this year, Transamerica and Mass Mutual pulled out of the market leaving fewer options to turn to. 

You can look at hybrids or life insurance with a chronic illness/LTC rider, but they will cost more.  Hybrids can guarantee pricing and return your principal if you quit or die but they will not match the LTCi benefit pool of a traditional LTCi policy at a similar price.  Life insurance with a chronic illness/LTC rider can be used but this is the most-costly option as it can guarantee the largest return when using little or no care.
Learn more about the options available today  – Insurance Insights™: LTC Planning – Exploring The Options.

What happens if Genworth defaults? 

Unfortunately, we have a roadmap showing what happens if they default.  Penn Treaty was an early player in the long-term care insurance marketplace.  Today they are in receivership and now the state insurance guarantee fund will need to honor claims.  In many states the guaranteed amount for a long-term care insurance policy will be $300,000.  To learn more about Guaranty Association Coverage launch the below links:

National Organization of Life & Health Insurance Guaranty Associations

State Guaranty Association Fund Limits

Whether your client is insurable or not, they may want to start reducing benefits above the state insurance pool protected amount.  This could mean they remove or reduce inflation which is growing
their benefit pool.  For those being offered reduction options, they may want to accept one of them. 

Thus, they are not paying for benefits that are not covered from their state insurance guaranty fund.
For those who consider they are throwing good money after bad, they may want to trigger their non-forfeiture option if available.  This essentially reduces their benefit pool to equal the cumulative premiums they have paid.  If they need care later, they can start getting their premiums back. 

IIC offers a pricing grid which reflects the different long-term care options available today.

Email Gail to request a copy of our LTC Pricing Grid at

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