Breaking news from John Hancock-
To our LTC Distribution Partners and Producers:
After a recent analysis of the macro-economic trends facing the long-term care (LTC) insurance industry, we have made the difficult decision to discontinue sales of our individual LTC insurance policies in all states. As many of you well know, the distribution landscape for LTC insurance has shrunk significantly since the peak of the industry in 2002. Today, there are far fewer outlets through which individual LTC insurance is sold, impacting the growth potential of the product. In addition, consumer demand for individual LTC insurance has fallen and remains stagnant. These trends, combined with the significant capital requirements of the LTC insurance business, are the primary reasons for this decision, which was not taken lightly.
Please refer to the following schedule of important dates relating to the wind-down of current cases.
- December 2nd, 2016 – last day to submit ‘in good order’ applications.
(11:59 ET for applications submitted electronically and/or must be received by December 2nd if mailed).
Please note LTC Quick Quotes will be discontinued effective immediately.
- December 16th, 2016 – last day to complete paramedical exams.
- February 10th, 2017 – all policies must be issued and paid for.
Please note that the decision to discontinue new sales does not impact our inforce LTC insurance business. We will continue to honor our commitments and provide high quality service and support to our existing LTC insurance policyholders and their families for many years to come.
We continue to believe in the importance and value of providing LTC protection for Americans, so as we look ahead, we will focus on offering LTC coverage as an accelerated benefit rider on our wide range of life insurance products, which has become an increasingly popular option for customers in recent years.
We appreciate your long-standing support and partnership in providing our individual LTC insurance to Americans over the years, and thank you for your business.
Please do not hesitate to contact us if you have any questions.
One thing I’d like to add is that this decision does not affect inforce or pending policies. Nor does it mean that any John Hancock LTC policy is subpar or inferior in any way. Actually, the opposite is probably true. Whenever an insurance company pulls back from market, it’s generally because it’s not profitable. In other words, the consumer (viewed as an aggregate) is “winning” in terms of premiums in and claims paid out– often to the detriment of the insurance company. The company is on the hook for existing business; they can’t change the terms of existing contracts. Even rate increases have to be justified and approved by the State’s Department of Insurance. Discontinuing new business is the fastest and most effective way to stop the bleeding.
There’s a good chance you’ll want to hang on to that Hancock LTC policy…it may have provisions no longer available on the market.