John Hancock LTC Product Changes
05-11-2010
Hancock released a statement last week that their current Long Term Care Insurance products, Custom Care II, is undergoing changes, effective June 7, 2010, including increased rates on new business.
The complete announcement with all of the details is attached.
If you have quoted this product recently, you should let your client’s know about the time crunch for getting in applications under the old rate structure.
Overview of Changes:
Product Changes:(1)
Streamlining our product portfolio — Effective June 7, 2010, we will simplify our product portfolio by withdrawing Leading Edge (except in FL) and focusing our resources entirely on Custom Care II Enhanced, which carries many of the same features as Leading Edge, including CPI-linked inflation, which is the preferred inflation choice of 70% of our buyers. Corporate Solutions will continue to be available on the Leading Edge platform, with new business rates being introduced on June 7, 2010, in approved states.
As part of our overall product plans we will also implement the following:
Reduction in our Preferred discount — Effective June 7, 2010, in approved states, we will lower our Preferred discount from 15% to 10%, to more appropriately address the impact of lower mortality on Preferred risks.
Compensation adjustment on Substandard — Effective August 2, 2010, compensation on Substandard policies will be calculated based on the Standard premium rate.
Elimination of Lifetime Benefit Period — Effective June 7, 2010, in all states, we will eliminate the Lifetime (unlimited) benefit option on Custom Care II Enhanced. Going forward, we will focus on defined benefit periods to ensure our
product designs emphasize affordability for the consumer and more appropriate risk management for the carrier.
Updated guidelines on Independent Care Providers — Effective July 1, 2010, on all NEW Custom Care II Enhanced(2) policies being sold, we will update our claims guidelines to eliminate the independent caregiver assessment. We are also clarifying prior work experience and/or training requirements when a friend or neighbor is being hired as an independent care provider. These measures are being taken to help ensure our claimants receive proper care at an appropriate cost when they are at home.
Pricing Changes:(1)
New business rates on Custom Care II Enhanced — Effective June 7, 2010, in approved states, new business rates will be adjusted to more accurately reflect the current economic environment and the latest claims trends, while enabling you to remain competitive. Premium adjustments will vary by age, inflation protection, and the benefit period selected. You will see a modest increase in CPI plans and a greater increase on 5% compound inflation plans, which reflects the higher levels of risk associated with fixed-rate, guaranteed benefit increases. Individuals who previously purchased Custom Care II Enhanced policies are not affected by these new rates.
TEMPORARY STAT E-SPECIFIC ACTIONS — In states where certain older products are several generations behind in pricing, we will temporarily suspend sales of those products until the new pricing is approved:
California — Effective June 7, 2010, we are suspending sales of Custom Care II, Custom Care II Partnership,3 and Corporate Solutions until new pricing is approved.
Florida — Effective June 7, 2010, we are withdrawing Custom Care, but leaving Leading Edge, which will be removed once Custom Care II Enhanced is approved there.
New York — Effective June 21, 2010, we are suspending sales of our Partnership product only (3) until new pricing is approved.
Puerto Rico — Effective June 7, 2010, we are suspending sales of Essential Care II until new pricing is approved.
If you have any questions on these changes, please contact your BUA Brokerage Sales Consultant.
1. This provides an overview of upcoming changes. Please see LTC Newslink for complete information.
2. Including Custom Care II in Tennessee.
3. John Hancock continues to be a participating insurer in the CA and NY Partnership programs. We will resume sales of Partnership plans in these states as soon as possible.
Contact
Business Underwriters Associates
Brokerage Sales Consultants
Phone: 1-800-792-6795
info@buaweb.com
