Genworth Financial has released information about their updated approach to the Long Term Care Insurance market and how they plan to design new products in the future.
Approaching New Products
President and CEO Tom McInerney addressed a question about how the company will handle new Long Term Care Insurance products and whether anything will change from previous releases. He explained that the company will always use their best estimate assumptions for the top four risks associated with long term care. Those risks include morbidity, mortality, interest rates, and lapse rates. When a product is launched, Genworth usually feels confident in their assumptions of these risks and is happy with how they managed them for the new pricing.
Despite best estimates, though, it is “unknowable” how things will change, McInerney discussed. That’s why it’s so important for the carrier to be “open-minded” to possible changes in the future because the time period of coverage is so long for Long Term Care Insurance. Most policyholders don’t use their benefits until 25 or 30 years after purchasing their plan, and things like mortality and interest rates change quite significantly in time periods that long.
All that Genworth can do is hope that the assumptions prove right. It’s not prudent to expect that no changes will be necessary in the future, though, especially if the cost of health care grows substantially. Adjustments to products might be needed later down the road and it’s crucial that not only insurance providers, but also consumers and regulators, are aware of this potential and ready to accept any appropriate changes to the pricing model.
Genworth is a leader in the Long Term Care Insurance industry with years of experience and more than 1 million consumers who have been insured. They are one of the top rated blue chip companies who has good financial ratings and a good history of paying claims. It’s important to buy from a blue chip company when purchasing policy for these reasons.
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