When you have been in this industry as long as I have, you can start to hear repeat questions as the economy cycles. Most recently Genworth has been in the news a lot. Whether it is their (still pending) influx of cash from the China Oceanwide deal or their recent rate hikes, Genworth seems to be cropping up in our call que a lot these days.

So when I field client questions about whether or not Genworth is “still a good deal”, we have to have some conversation about what constitutes “a good deal”….

1) Price: for some folks it is all about the price on the bill due. My guideline is this: if you have owned your Genworth policy more than 3 years, then hold on to it. You cannot price touch it at your new age…even if there has been a rate increase. By all means, feel free to reach out to us and let us get you a current comparable quote at your current age/health. But in all my years of working in this product line, I have not seen a policy holder switch to a new company after 3 years of ownership and save money.

2) Ease of claims: as of the date of this blog, I can safely say that Genworth’s claim procedures are some of the best in the industry. It still suffers from the complexity of any claim (document intensive and multiple humans who all have to do their jobs correctly), but their procedures are some of the most consumer-friendly. Further, they are contracted by other companies to process claims since their claim procedure works so well. So in this regard, I’d still say “hang on to it”.

3) Financially stable: what happens if they don’t get cash influx (China oceanwide or elsewhere)? What if they go belly-up? Well, in every state you have a state-run Guarantee Association. This is a pool of money created thru dunning insurance carriers a tiny percentage on every insurance policy sold in the state. It functions like the FDIC for banks, but it is for insurance companies in your state. So if you own a policy with a company that goes belly-up, you can take your policy to the State Guarantee Association and they will honor it up to a state-set limit. Now my advice about Genworth is based on cycling back thru #1 and #2 above. Have you owned it more than 3 years? If YES, keep it. If NO, shop it for prices from another company. How concerned are you about a claim in the near future? Very: keep it. The claim office is unlikely to collapses first if the company goes under. Not so very concerned, see #1.

It is true that Genworth has been downgraded in the financial ratings (Standard and Poors, AM Best, etc). However, the financial rating of a company is one of many variables a person must consider when evaluating a long term care policy. Clearly if you are shopping to buy one today, look carefully at other options as you may find something that has a price you can tolerate, good claim payment history and strong financial rating. But if you already own a Genworth policy, ponder it a bit and decide whether or not it is worth it to shop and replace your policy. Genworth was for many years the premier company in this product line (thus their smoother-sailing claim process). No one can tell you for certain the best route, but you can use a logical and ordered approach to making the choice.

 


 

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Long Term Care Claims & Insurance

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