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Periodic Contributor

Long-term care insurance: concerns about viability of AARP-recommended Genworth Insurance company

About five years ago, I bought Genworth long-term care insurance based on AARP's affiliation with Genworth. Concerns about the company's viability are now great: there is a class-action lawsuit against them (2016), it was sold to a Chinese company, and one can read about dismal responses to filed claims. I tried to contact someone in AARP to see if AARP had any recommendations about what policy holders can do (as of about a year ago, New York Life became AARP's long-term care insurance associate). I've not had a response to the question: does AARP have a recommedation regarding Genworth, and, if so, what is it? Does anyone have suggestions for what to do about Genworth? Does anyone have a suggestion as to whom to contact in AARP for some advice in this matter? Thank you.

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Periodic Contributor

Thanks to you and to all others who have replied to my original question. I'm very concerned about Genworth and whether it will be there when I and others need it and about the fact that it has not been there for so many. I tried to contact the AARP to ask if it had a recommendation about what to do--especially because the AARP offered LTC insurance through Genworth. The AARP rep on the phone kept telling me to call Genworth, even after I explained that I was looking to speak with someone at AARP. The rep was not trained to answer this type of question. In any event, has anyone tried to bring this to the attention of AARP's leadership? If so, what was the result?

 

It seems that, if AARP's mission is to help older folks, the Genworth situation in particular and the LTC situation generally is something AARP would want to address. Thoughts? Thanks!

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Honored Social Butterfly

@lc71896263

 

AARP is NOT an insurance company or even a co-insurer - they are a membership organization that SELLS their (branded) name to get royalty income for revenues to support their whole mission including their Foundation.

These type of arrangements are done by the AARP taxable entity of AARP Services, Inc.

 

AARP .org is a nonprofit, nonpartisan membership organization that empowers people to choose how they live as they age (their mission) AARP.org - Who We Are - About AARP

 

The AARP Services, Inc. (ASI) is the division that sells the AARP branded name to private companies of various types for this royalty income - ASI is a taxable entity.  AARP Services, Inc (ASI)

Perhaps that is where you should address your grips but I doubt anything will come of it.

 

AARP really does not "recommend" any of the various companies that are paying this royalty income and thus bares the AARP name.  Again, read the small print and the disclaimers of the private entity product or service.

 

 Perhaps in the minds of some, they interpret this service branding as a recommendation - it is not.  Various types of Insurance are based on the needs of the person buying the policy.  in fact, many times there isn't even any AARP special deals, especially with many of the insurance products.  

 

Many times, the branded service can be sold to everybody - not just members.  The only branded service which I know about in the insurance realm where you have to be a member to buy the policy is with AARP UHC Medicare Supplemental (Medigap ) Insurance and that is because it is written as a "GROUP" type insurance product with each member being covered under the group policy for this Medicare GAP coverage - the same for everybody depending upon which alphabet plan a member picks as their choice.

 

The AARP branded Long Term Care insurer is now New York Life.  The AARP name branding agreement (and that is all that it was)  with Genworth ended many years ago.

 

Genworth, in regards to solvency issues, is, as any other insurer of this type of coverage, is under rules by the Feds and the various states where they sold these types of policies.  As I said before, the office of the insurance commissioner in the state where you live maybe a better entity to advise you on the financial health of the insurer - Genworth.  They would have the latest financials.  You can always check Genworth's rating on AMBest too.

Better yet, with helping you determine what to do, consult a local long term care insurance agent - preferably one that sells Genworth.

 

Investopedia - What If Your Long term Insurance Carrier Goes Bust

This describes the protections which you have.

 

Again, hopefully, there are some changes which you can make to your policy to make the premiums more reasonable to you - this, would, of course, lower your benefits too.  Perhaps a Genworth agent could make some recommendations.

 

 

 

 

 

 

 

 

 

It's Always Something . . . . Roseanna Roseannadanna
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Periodic Contributor

Thank you so much for your comprehensive response. It's much appreciated. I will definitely take some of the steps you have outlined. As far as AARP is concerned, as we know, when AARP associates its brand with a particular product, it gives the impression to the general public, and especially the older public, that AARP is endorsing that product, small print and nonprofit/for-profit status to the contrary notwithstanding. If it is not endorsing the product, it should say so loud and clear and upfront--otherwise it's being deceptive. Moreover, if that product begins to adversely affect older people (as Genworth and LTC insurance generally may be doing), then AARP should step up to the plate and offer some suggestions for measures that can be taken to protect oneself from those adverse effects. It should offer on its website a way for its members to notify AARP of such effects and it should initiate the process of notifying members of such effects. I can't see that AARP does this. I can imagine that most readers of this post will agree with me--AARP representatives probably don't read these discussions ( at least, not in a meaningful way), so I also imagine I'm preaching to the choir. In any event, I just put all this out there in case it results in some organized effort for corrective action. Thank you again.

Honored Social Butterfly

@lc71896263

 

Can't speak to the old AARP Genworth LTC policies but the disclose is definitely there on the new(er) AARP Long Term Care Options from NYLife.

 

New York Life Insurance Company offers AARP Long-Term Care Options to eligible AARP+ members. New York Life pays royalty fees to AARP for the use of its intellectual property. These fees are used for the general purposes of AARP. Neither AARP nor its affiliates are insurers, agents, producers or brokers. New York Life is the insurer for any insurance products offered through AARP Long-Term Care Options.

 

Members buy these third-party benefits from the actual third parties, not through AARP.  The disclose is there, abeit in small print.  

 

I am sorry that this product is not performing as you think it should but it is an insurance product with premiums which fluctuate. This differs from a level term policy.  

 

Many people here (members, I assume) are upset that the branded AARP Medicare Insurance products insured through United Healthcare has dropped Silver Sneakers from their plan and has created one of their (UHC) own type for each of the different types of Medicare plans - Medicare Advantage or Medigap.

They don't seem to understand that these type of extra benefits can change or be deleted at anytime.  The disclosures plainly state this, year in and year out.

 

Your policy of whatever type should say this too.

 

This membership organization of AARP is made up of many volunteers.  This organization makes grants to many different organizations which they feel further their mission.  It is classified as a non-profit membership organization - a 501(c)(4).  The AARP Foundation is the charitable arm of this organization by which they take on more of a legal, lobbying, charitable role of supporting efforts to help ALL seniors especially those less fortunate.  I believe that is also the arm of this organization that helps seniors with their tax filing.

 

AARP Services, Inc ( ASI ) is the profit (taxable) arm of the organization which solicits and sells the branded name of AARP (TM).  

 

The latest non-profit 990 is on the website for all to review.

 

Perhaps my only complaint about all of these problem to do with these third party benefits branding AARP's name is that the disclosure should be right above the place where the beneficiary signs off on their desire to partake of the policy, highlighted in BIG RED LETTERS - READ and UNDERSTAND THIS.

 

PEOPLE SHOULD ALWAYS UNDERSTAND COMPLETELY WHAT THEY ARE SIGNING.  Don't go by what "somebody told me" or I thought it worked "this" way, not "that" way - an assumption on their part.

 

Sounds to me like many people here really don't understand the organization to which they are members.

 

 

 

It's Always Something . . . . Roseanna Roseannadanna
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Wife and I took out LTC with Genworth in 2012. Yes it was expensive, but thought it was best to thing to do to insure that our children would not have to be burdened. We were told that premiums rarley increase and so we looked in depth at our expenses and income going into the future and felt comfortable. Premiums were $3900 the first two years but went up about $500 the 3 year. While that concerend us we still felt ok. Then the bomb dropped in late October 2018. A $2000 increase hit us in the face. We didn't know what to do. Around $45000 invested and now the choice. Loose all that "investment" and go without or pay up. I called our state insuranse commisoner, no help, called Genworth absolutley no help. My agent finnaly got us a "deal" thru GEN. Cut back from 8 years of coverage to 5 years and instead of the 5% added to our yearly premiums now it would be 3%.and payments would $4600. Now I here of more increases. 

Shame on you GEN and as far as AARP your endorsement of GEN  just added on to other reasons for mer not to renew my subscription!

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Newbie

If Genworth pays out more claims than any other LTC insurer, then they most likely have collected more money in premiums over the years than any other company. My wife and I just received a notice of a 45% increase in premiums. We, like many seniors are on a fixed income and I'm sure Genworth understands this. I don't think AARP should recommend a company that takes such advantage of retired Americans.

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scams are abundant avoid long term care before I turned 50 and before and health issues I signed up for long-term care with use to be GE Capital and is presently genworth insurance. My rates have been $3,456 per year and I have paid over 15 years adds up to $45,456 dollars. This year the rate increased to $9,770.00. I am researching and finding that there are several class action suits on Genworth and that they recently sold their long term insurance to China. Not another dime and I will be see what I can do to fight this. Any ideas are appreciated thanks had to vent. https://www.richmond.com/business/local/genworth-financial-to-be-sold-to-china-based-firm-in/article...

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Honored Social Butterfly


@ms8605402 wrote:

If Genworth pays out more claims than any other LTC insurer, then they most likely have collected more money in premiums over the years than any other company. My wife and I just received a notice of a 45% increase in premiums. We, like many seniors are on a fixed income and I'm sure Genworth understands this. I don't think AARP should recommend a company that takes such advantage of retired Americans.


Genworth LTC and AARP severed their MARKETING AGREEMENT back in 2013.  

 

You have a decision to make - 

Many policies let you reduce the benefit to keep premiums in line with a tighting budget.  At least this keeps you from losing it all together if you let it lapse for non-payment of premiums.  Beginning again at a higher age with a new policy probably isn't an option.  

 

I don't know of any insurance that is based on a fluctuating marketplace that does not increase based on the use, cost and exposure of that marketplace auto, home, health and yes, LTC.  As with other insurance, premium cost are determined by risk factors and the cost of LTC is escalating - salaries, benefits, employer cost for employees - payroll tax match, workman's comp, unemployment insurance - and other cost associated with the care services and yes, profit of the provider too -

 

Also consider the "long" part of the equation in this type of insurance -  we are living longer and when these benefits begin to pay out, they are rarely ever stopped in the short term and premiums still have to be paid.

 

LTC insurance needs to be re-evaluated periodically because financial conditions change.  LTC insurance is mainly for those in the middle - income and assets.  The rich could probably pay out of pocket for their care, the poor can rely on Mediciad, if long term care enters the picture - LTC insurance is for those in the middle who want to preserve some of their assets - that's the reason for all insurance - FINANCIAL PROTECTION.

 

AARP uses these marketing agreements with other companies and the financial benefits they derive from them to further their mission statement as a non-profit. Each member should still evaluate the product to make sure the product is good for themselves; the best product for themselves.  

 

So so look at your situation, evaluate the policy, the coverage, any options you may have and determine the BEST decision you can make for your own situation.  

 

 

 

 

It's Always Something . . . . Roseanna Roseannadanna
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I Am a Genworth policy holder since 2003.  I was brought into the product by my financial advisor based on GE advertising that since 1974 GE had not ever raised rates on its Long Term Care Insurance and that while that was a possibility how could one imagine that in 3-4 years my policy rates would almost double.  I don't see how AARP can justify defending a company that would do that, especially to people who are way beyond the ability to pay such and increase.

 

This should be the subject of a major class action suit against this company and AARP should support it.  The action of the CEO in this case is unconscionable.  Trying to unload this company now after claiming to be the biggest and most profitable for years and then saying he

s going to dump it is criminal.

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I have had Genworth LTC for years. Had a 14% increase in 2013. Just recieved notice of a 42% increase. A $2000+ per year increase. May force me to drop out thus bacicaly losing coverage and the nearly $32000 i have put in. Not a happy senior!

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Honored Social Butterfly


@jimluebker wrote:

I have had Genworth LTC for years. Had a 14% increase in 2013. Just recieved notice of a 42% increase. A $2000+ per year increase. May force me to drop out thus bacicaly losing coverage and the nearly $32000 i have put in. Not a happy senior!


Do you have the option of dropping down your benefit level to save premiums cost on this policy - that might be better than nothing at all.

 

Personally, I like the saving and investing for growth idea on a personal level because remember, LTC insurance is insurance which means what you pay in premiums helps those who are receiving the benefit now and cost can only go up in the future because it is labor intensive.

 

Home Care, a personal care home or assisted living is gonna be cheaper than actual longterm care in a nursing home and  your policy should cover personal care for those areas needed and covered by your plan in wharever environment.

 

 

 

It's Always Something . . . . Roseanna Roseannadanna
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You don't get it.  This CEO is on a personal campaign to drive up rstes on its long term care insurance to drive policy holders out of the coverage.  Why else would a company that at the time of the offering in 2003 claimed that they had never raised rates since beginning policy issue in 1974 would increase my premium in the last three years almost 100%.  This is not the action of a responsible company.  This is the action of a sort that is criminal and needs to be attacked.  If this CEO and company doesn't face a class action suit, I don't know who should be.  I am waiting for someone to tell me how to file.  I'd pay money to go after this outfit. Genworth Long Term Care is the coimpany.

Victor Battagliol,  Policy holder since 2003

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Honored Social Butterfly

@VictorB61677

 

Long Term Care insurers have to file with your state for premium increase approval.

 

They have to prove that a premium increase is warranted based on their books of what is coming in from premiums, investments and what is going out in benefits.  

 

LTC policies have changed over the years because of economic and social conditions - we are living longer, the price of care has escalated and investments that are used to keep your premiums down were decimated during the Great Recession.  Add to that, the number of people who have forgone their own policy because of premium increases or financial constraints in their own life.

 

As always what someone tells you is worthless if it is not covered in the policy in black and white.

 

You may have some options depending on your policy - a shorter length of coverage, increasing the elimination period (the time before the policy kicks in) - such changes could make your premiums more reasonable to you.

 

Long Term Care isn't gonna get cheaper - caregivers want more money for their services, liability claims and coverage for providers is gonna keep going up with each new lawsuit.  The cost of buildings, utilities, etc. keep escalating.

 

When this market was young, up through about the early to mid 2000's, there were 100's of companies selling LTC policies - today there are barely 20.  AARP stopped any branding with the sector in about 2013.

 

Today, these few companies sell policies that are of less benefit for a hefty premium - many are "hybrid" types linked with a life insurance policy.

 

So before you or anybody starts any legal action - check with your state and the other states on the insurers financials being presented for premium increases - 

evidently your insurance commissioner felt the increases warranted.  

 

 

 

 

 

 

 

It's Always Something . . . . Roseanna Roseannadanna
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The class action lawsuit you mention has nothing to do with Genworth paying claims properly. The class action suit was brought by stockholders who say Genworth did not properly disclose their claims projections.  

 

Genworth pays more claims than any other LTC insurance company. In 2015, Genworth incurred over $1.5 BILLION in claims.  That was almost twice as much as any other company.

 

The hard part about filing a long-term care insurance claim is that it’s something you only do ONCE in your lifetime. Most doctors don’t know what’s required to file a claim. Each state has laws that require the insurance companies to make a claims decision quickly (usually within 60 days of receiving the claim form). If the insurance company has not received the medical records and the certification from your doctor within that time period the insurance company has to deny the claim. You then have to re-open it, which is a real pain.

 

The best thing to do at the time of claim is to work with a home care agency that has a lot of experience filing long-term care insurance claims.  Amada Senior Care is one example.  They’ve processed thousands of long-term care insurance claims. I don’t work for them but I know them and I recommend them to all of my clients.

 

http://amadaseniorcare.com/free-ltci-claims-processing/

 

 

Scott

 

 

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Periodic Contributor

Thank you, Scott. So do you have confidence in Genworth's viability (in contrast to various reports I've read)?

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Most of the "bad news" you hear about Genworth is written for investors explaining why they should not invest in Gewnorth bonds or Genworth stock. However, there is a big difference between investing in an insurance company and being a policyholder. In fact, what's good for the policyholders are oftentimes NOT good for the stockholders (investors).

 

A couple years ago Genworth added almost $2 Billion to their LTCi claims reserves. That was good news for all of the policyholders. That was bad news, however, for the stockholders. The stockholders would have preferred that money be counted as profits which would have increased the stock price. Instead, after adding that money to their LTCi claims reserves Genworth's stock dropped and that was the cause for the class action lawsuit.

 

The last time I checked Genworth had over $20 Billion in reserves set aside just to pay long term care insurance claims. Reserves are funds that are NOT counted as assets. Reserves can't be touched by creditors. Reserves are used exclusively to pay claims.

 

Genworth collects about 2.5 Billion in LTCi premiums each year.

They are incurring about $1.5 Billion in LTCi claims each year.

And they have over $20 Billion in LTCi reserves (to pay future claims).

 

Those numbers work. I'm not the least bit concerned about Genworth's claims-paying ability.  

 

Scott A. Olson, CLTC

 

 

 

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I purchased a Genworth LTC policy for myself and wife in 2011 in Florida, long after they supposedly shored up their reserves, from their previous actuarial malfeasance.  Well, in that 8 year time, they raised my premium 24%.  Not great, but, not too terrible considering this industry (which I now believe to be fully corrupt).

 

On Friday, I received a notice of an additional 98% premium increase.  Oh, and a guarantee not to raise again, for 10 years.  Hah.  

 

Genworth is a scam company, in a scam industry.  I consider the 27K in premium paid to a lost cause.

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Periodic Contributor

Thank you for your helpful explanation.

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Regular Contributor

Actually, "viability" of the company is not the issue.  Companies (and their assets/liabilities) are bought and sold all the time.  In this case, the main concern, no matter who holds you policy, is cost increases over the next 20 years.  With the government's low (zero) interest rate policy for the last 8 years, insurance companies are becoming unable to cover future liabilities.  So they are increasing their rates horrendously.  My UNUM LTC policy of 20 years increased almost 3 FOLD last year, from $124 a month to $286 a month, courtesy of approval from the NC State Department of Insurance (interestingly, Pennnsylvania refused this increase so I guess I am subsidizing LTC policies in PA)! 

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It is true that many of the older LTCi policies have had large premium increases.  To protect consumers purchasing policies today, 41 states have passed strict pricing regulations.  Consumers purchasing policies today are protected from the pricing mistakes of older policies.

 

North Carolina passed a strict “Rate Stability Regulation” on February 1st, 2003.  Everyone who has purchased a long-term care insurance policy approved by the state since February 1st, 2003 is protected by these strict rules regarding rate increases.  

 

About 95% of the rate increases in North Carolina have been on policies purchased before February 1st, 2003. Only about 5% of the rate increases in North Carolina have been on policies purchased after February 1st, 2003.

 

 

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Regular Contributor

OK, so I'm subsidizing post-2003 policies in NC also........................

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No. You're not subsidizing other policies.  Post-2003 policies were priced higher than pre-2003 policies because of the rate stability regulation. Your rate increase was based solely on the claims experience of your policy form in your state. 

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