Genworth Introduces New LTCi Coverage
By Cyril Tuohy
Genworth, looking to revamp its long-term care insurance (LTCi) product line, has introduced Privileged Choice Flex 3, which the company said would offer more pricing and coverage flexibility for policyholders.
Flex 3’s defining features are the “FlexFit” packages. Buyers can choose one of eight annual premium options from $1,000 to $4,500, and initial coverage amount options from $100,000 to $500,000, the company said.
“FlexFit allows more Americans to take control of their long term care future for not much more than what it costs for a daily latte,” Genworth chief executive officer Thomas McInerney said in a news release. “The security that comes from knowing that protection is now more accessible can be invaluable for families.”
In an interview posted on YouTube, McInerney said buyers can approach the product from either a pricing or a coverage standpoint.
“Instead of having a very complex set of options, we break it down to the two most important criteria that consumers focus on when thinking of buying long-term care insurances: how much do I pay either monthly or annually, and how much do I need,” he said.
Flex 3 is available beginning from $80 to $90 a month, he also said.
Genworth insures 1.8 million policyholders through LTCi, and the introduction is part of the company’s overhaul of the way it approaches the long-term care market.
Before the financial crisis, the company found it had underpriced many of its LTCi policies, causing the company to lose money on many LTCi policies.
Last year, the company began filing rate increases of between 6 percent and 13 percent on LTCi policies issued between 2003 and 2012. As of March 31, Genworth had received approvals from 11 states, up from four states at the end of last year, the company said.
In addition to raising prices, the company announced it would be launching new products like Flex 3.
In a first quarter conference call with analysts, McInerney said that from the perspective of investors, Flex 3 is “conservatively priced, which we feel is appropriate given the risks inherent in long-term care insurance, and should generate returns of 20 percent or more.”
Flex 3’s risk profile, he said, is “much improved” with “marginal interest rate and lapse risk, and significantly less morbidity risk.”
Features and benefits in the FlexFit coverage packages include inflation protection, no waiting period to receive home care and care coordination through a registered nurse.
Cyril Tuohy is a writer based in Pennsylvania. He has covered the financial services industry for more than 15 years. Cyril may be reached at [email protected].
© Entire contents copyright 2014 by InsuranceNewsNet.com Inc. All rights reserved. No part of this article may be reprinted without the expressed written consent from InsuranceNewsNet.com.