Individual long-term care insurance (LTCi) John Hancock policyholders will be notified of premium increases beginning next week, the Boston-based life company announced.
The rate hike notifications apply to in-force policies issued in California, Maryland, Florida and South Carolina, the company said.
Rate increases will have an effective date beginning with policy anniversaries on or after July 1 and range from 15 to 25 percent.
Agents were advised of the rate increases last month, but the news should not come as a surprise since the actions had already been approved by regulators in 2013.
Rates on individual LTCi policies issued in Delaware and Mississippi for policyholders with initial “capped” or “phased-in” increases are subject to the July 1 hike, John Hancock said.
Fortis individual LTCi policies originally issued in New York fall under the July 1 increase as well, the company said.
Policyholders in Maine who received an initial “capped” or “phased-in” increase stemming from a 2010 regulatory rate increase approval will also be affected.
Policyholders will be notified on or about April 24, the company said.
LTCi policy series subject to the increases include John Hancock Advantage, Advantage Gold, Gold, Custom/Essential Care, Time 4060s and Union 6060s and 7060s.
Fortis LTCi policies subject to rate increases include Union 4060s and 7060s, John Hancock said.
John Hancock bought Fortis' individual long-term care business in 2000.
Withdrawal Announcement Last Year
John Hancock stopped selling new stand-alone individual LTCi policies last fall after the company determined it could not reach its profitability goals.
The announcement dealt another blow to a declining industry product line. Rates on in-force policies rose by double-digits over the past few years to make up for underpricing when the LTCi policies were issued many years ago.
In contrast to the declining individual stand-alone LTCi market, the individual hybrid LTCi market has grown.
Hybrid products link life insurance to long-term care or other benefits, for example, and consumes prefer these linked policies because they are more flexible.
About seven or eight insurers remain in the individual LTCi market, said Jesse Slome executive director of the American Association for Long Term Care Insurance.
The average price a couple in their 60s could expect to pay for a new LTCi policy rose 6 to 9 percent in 2016 from the previous year, according to the 2017 Long-Term Care Insurance Price Index.
Long-term care insurers paid $8.65 billion in claim benefits in 2016, an increase from $8.15 billion in 2015, the AALTCI reported earlier this year.
InsuranceNewsNet Senior Writer Cyril Tuohy has covered the financial services industry for more than 15 years. Cyril may be reached at [email protected]
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