The insurer recently announced its intentions to step out of that market and will cease selling next month.
As of December 2016, John Hancock long term care insurance policies will no longer be sold by the insurer. This announcement arrived as the company announced that it would be exiting that coverage market.
The insurance company is owned by one of the largest long term care policy providers in the United States.
John Hancock long term care insurance is owned by Canadian firm Manulife Financial Corp. That company is among the largest players within this branch of the American insurance industry. It currently covers over 1.2 million long term care insurance policyholders across the country.
Manulife made the announcement of the shut-down of this part of John Hancock’s offerings in the third quarter earnings report. It represents yet another major sign that this part of the insurance marketplace is fizzling out. As a result, competition is dwindling and customers seeking this coverage are being forced to pay skyrocketing premiums.
Group John Hancock long term care insurance policies had already been halted back in 2010.
John Hancock spokesperson, Melissa Berczuk, explained that “Today there are far fewer outlets through which individual LTC insurance is sold, impacting the growth potential for the product.” She also added that “consumer demand for individual LTC insurance has fallen and remains stagnant.”
The purpose of long term care insurance had been to provide coverage for elderly people whose Medicare was not adequate for their health insurance needs. This specific type of insurance policy covers some or all of the cost of rehabilitation and recovery services. It can also cover the additional care needs of seniors who require assistance to be able to live at home or in a nursing care facility.
The largest demographic covered by John Hancock long term care insurance has been baby boomers. They were sold the policies to give themselves peace of mind in knowing they would be able to afford necessary care as they aged. However, now that the baby boomers are starting to use their coverage, it is proving to be more expensive than insurers predicted. Rates have spiked and many insurers are backing out of the market altogether.