John Hancock long term care insurance is shutting down

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.

One Thought to “John Hancock long term care insurance is shutting down”

  1. Bill Comfort

    LTC insurance is NOT primarily for “rehabilitation and recovery services” as those costs ARE primarily paid by Medicare. LTC insurance primarily pays for on going “custodial” care – help with physical activities or supervision because of cognitive deficits – at home, in assisted living, or non-skilled care in a nursing home all of which are not covered by Medicare.

    The average claim starts about age 80. The leading Boomers are just this year reaching 70, and for those who do own LTC insurance very, very few have filed a claim yet; boomers’ claims are not the problem.

    This article also unfairly excludes the fact that John Hancock, along with other companies that have stopped selling LTC insurance, will continue to provide coverage and service to the millions of people who already have a policy as required by law. It also fails to mention that John Hancock will continue to sell a rider on its life insurance policies that allows the death benefit to be used to pay for LTC services. This type of LTC coverage is growing in popularity, sales, and the number of companies that sell it. So insurance options for LTC costs are actually growing; it’s only the “traditional” type of LTC insurance that has seen a decline.

    ComfortLTC.com

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