Genworth SPIA Targets LTC Needs For Older Clients

Genworth has introduced a single-premium immediate annuity aimed at prospects in the 70-95 age bracket. This group of older seniors may not have planned ahead for their guaranteed income needs and now find that their age and health work against them in obtaining long-term care insurance or another annuity product.

IncomeAssurance Immediate Need Annuity is a medically underwritten SPIA that provides a lifetime of monthly income payments for those ages 70 and older. The income can be used for any purpose but the SPIA is designed to help those with adverse health conditions offset the costs of care with guaranteed monthly income.

IncomeAssurance is designed for prospects who are concerned about outliving their assets and need guaranteed income. However, unlike many annuities, IncomeAssurance is aimed at those who are less healthy and could benefit from a larger monthly income payment than they would likely receive from a traditional nonmedically underwritten immediate annuity. These prospects may be facing the need for care but because of their age or health, they are shut out of many long-term care insurance options.

Because the product is an annuity and not LTCi, the payments can be used for any expenses and are paid directly to the client, said Debapriya Mitra, senior vice president of business strategy of Genworth’s U.S. Life Insurance Division. This is not a reimbursement for the cost of care and there are no claims to file. The income provided from the annuity is not dependent on the level of care needed by the annuitant.

The product is medically underwritten, Mitra said, but there are no blood tests or lab work required. Prospects may not be disqualified because of poor health. Instead, a telephone consultation with a nurse is followed by a nurse visit to ascertain how well the prospect is functioning. A review of the prospect’s medical records also is conducted.

The minimum premium required to purchase an Income Assurance Immediate Need Annuity is $50,000 with additional contracts of $25,000 available. The owner may select an annual cost of living adjustment of 1 percent to 8 percent.

An early death benefit will be paid if the owner dies within six months from the contract date. An optional enhanced death benefit is available if the owner selects life income with a protected period of one to five years at issue.

The new product launch comes a few weeks after Genworth announced it was suspending new sales of life insurance and fixed annuities in an effort to stem its financial losses. Mitra said the new annuity product offering is part of Genworth’s strategy to “focus exclusively on addressing the financial challenges of aging.”

“Here we see a rising number of seniors who have an increasing need for care and they are past the age of qualifying for long-term care insurance,” he said. “This is a product that can be a solution for their income needs.”

The new SPIA “is no silver bullet,” Mitra continued. “Consumers need a basket of different solutions because there are so many different needs. This is not a cure-all but one very real solution for a group of people who need solutions.”

Susan Rupe is managing editor for InsuranceNewsNet. She formerly served as communications director for an insurance agents' association and was an award-winning newspaper reporter and editor. Contact her at [email protected].

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Susan Rupe is managing editor for InsuranceNewsNet. She formerly served as communications director for an insurance agents' association and was an award-winning newspaper reporter and editor. Contact her at [email protected].