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Genworth Long-Term Care Insurance Review

genworth long term care review

A key ingredient in any plan focused on wealth building and legacy creation is estate preservation. And one of the best methods of estate preservation is long-term care planning. Genworth Financial is one of a few pure long-term care insurance companies left in the market.

In the following Genworth long-term care insurance review, we will examine the Company, its financials, insurance ratings, products and features, with a focus on determining if Genworth is the right choice for you and your estate preservation needs.

About Genworth Life Insurance Company

April 24, 2018 update: Genworth-and-Oceanwide-Withdraw-and-Refile-CFIUS-Joint-Notice

Please note, due to Genworth’s continued financial problems and with various sources around the web stating that the deal with China Oceanwide Holding Co. may not win regulatory approval, we at I&E are not recommending Genworth to our clients at this time.

Genworth Life Insurance Company focuses on long-term care insurance and life insurance solutions. In October 2016, Genworth agreed to be acquired by China Oceanwide Holdings (COH). COH is looking to close the deal by the end of 2017.

Genworth Financial is the parent company of Genworth Life Insurance Company (GLIC). GLIC that provides residential mortgage insurance in Australia,m Canada and the U.S. and its U.S. Life Insurance consisting of long-term care insurance products as well as service traditional life insurance and fixed annuity products in the United States.

Genworth Financial also has old business portfolio containing life insurance and annuity products from when the company dealt in individual life insurance and annuities, considered “runoff”. The Company’s runoff portion consists of variable annuity, variable life insurance, institutional, corporate-owned life insurance and other accident and health insurance products.

The Company’s major business is long-term care insurance, and with the help of COH’s financial backing, Genworth will continue to be a leader in the U.S. long-term care insurance market.

Genworth Life Insurance Company Ratings

The different life insurance ratings agencies have given Genworth some low ratings. There is a lot that goes into these ratings and we will attempt to address why Genworth’s life insurance ratings are well below the industry average. Here are Genworth’s ratings as of December 2017.

  • A.M. Best rating: B
  • S&P rating: B+
  • Moody’s rating: B2
  • Fitch rating: BB
  • Comdex ranking: 49

The ratings are moderate financial ratings which warrant extreme. Typically, we want to see excellent (A-) or better from A.M. Best. Genworth is going through difficult financial times. It would seem that one reason for this is because they were one of the original long-term care insurance providers in the marketplace. And when they entered the market, interest rates were much higher. Additionally, people are living longer than expected. However presently, Genworth is pricing its LTC insurance more in line with current interest rates, so if it can find financial support, the Company’s long-term viability could turn around.

The latest press release from Moody’s in October 2017 sheds some light on Genworth’s current financial position. Moody’s downgraded Genworth’s long-term debt from B2 from Ba3 (Questionable). The main problem Moody’s cites is that COH has not finalized its acquisition of Genworth. Genworth apparently needs COH to acquire it in order to continue business as usual.

So what should you do? In our opinion, Genworth and COH will finalize their agreement soon. At that time Genworth will have the financial backing it needs to continue without any issues. The prudent choice at this time may be to wait until the acquisition has been finalized between COH and Genworth.

Genworth Long Term Care Insurance

In our opinion, we have not yet seen the media pick up on the future long-term care (LTC) crisis. In our estimation, the best option to protect you and your loved ones from the high costs associated with LTC is long term care insurance (LTCI). Traditionally, long term care insurance provided an income benefit for costs associated with long term care.

Long term care insurance benefits are triggered by one of two scenarios:

  1. If you are unable to perform 2 of 6 activities of daily living (ADLs); or
  2. You require care due to a cognitive impairment such as Alzheimer’s disease, Parkinson’s disease, or Dementia.

Your long-term care benefits provide help for different expenses including in home care, nursing home care, or care in an assisted living facility. Your income benefit is considered reimbursement for expenses and is typically income tax free up to certain statutory amount.

To receive your long-term care benefits you must meet the requirements mentioned above regarding ADLs or cognitive impairment. In addition, you must file a claim with the insurer and wait for the policy’s elimination period to pass. Your elimination period represents the time you must wait until you can receive your income benefits, counted as either calendar or service days.

Once you are eligible to receive benefits, you can receive benefits for as long as your benefit period lasts.

Please see our article, what is long-term care insurance for more or give us a call and we would be happy to answer any questions you may have.

Privileged Choice Flex 3

Underwritten by Genworth Life Insurance Company, Privileged Choice Flex 3 is a reimbursement long-term care insurance policy. You can choose either monthly or daily benefit reimbursements for your long term care costs.

You can choose from different benefit multipliers ranging from 2, 3, 4, and 5 years. The benefit multiplier is multiplied by your monthly or daily maximum benefit amount to determine the total benefits available to you. For example, if you have a monthly benefit maximum of $10,000 and a 5 year benefit multiplier, your initial coverage maximum (AKA “Pool of Money”) would equal $600,000 ($10,000 x 60 months).

Genworth long-term care insurance elimination periods range from 30, 90, 180 or 365 days. The LTC insurance policy also offers 2 different elimination period options, calendar and service day.  The calendar day elimination period looks at the actual days that pass, while the service day elimination period is based on the days you receive LTC services. Calendar days is the superior choice but it will also increase your LTC insurance premiums.

The LTC policy offers 3 different inflation protection options. A compound interest inflation option is available at 2%, 3%, 4% and 5%. You can also choose a 5% simple interest inflation protection rider. The future purchase option allows you to increase your coverage by 3% annualized on every third anniversary of your coverage, without evidence of insurability.

Be aware that under the Long-Term Care Partnership Program, some states require that policies include an automatic 5% compound inflation protection. The requirement is lower in certain states. That is why it is important to know what your specific state requirements are before designing your LTC insurance policy, if you desire that it meet your specific State’s Long-Term Care Partnership Program guidelines.

Some additional Benefits of Genworth’s Long-Term Care Insurance Policy

Genworth Live+Well

Genworth has collaborated with Mayo Clinic in creating a wellness program that is exclusive to Genworth long-term care insurance clients, as well as the client’s spouse. The Live+Well site provides online resources and tools such as self-paced coaching, health trackers, calculators and tips from Mayo Clinic experts. You are eligible to sign up for Genworth’s Live+Well program once your long-term care insurance policy is in force.

Home Assistance Benefit

The home assistance benefit provides a maximum lifetime reimbursement up to three times the monthly maximum or 90 times the daily maximum for caregiver training (such as a friend or family member), installation and ongoing monitoring of emergency medical response systems and home modifications, such as devices providing assistance and supportive equipment.

Shared Benefit Rider
The shared benefit rider provides an additional benefit, allowing your pool of money to be shared with your spouse.

Genworth Review Conclusion

Long term care is expensive and will probably be a lot more than it is down the road. You are probably looking at paying around $100,000 a year for a nursing home and $50,000 a year for assisted living. And according to a 2016 Genworth report, in home care runs around $3,800 a month currently. These numbers are increasing every year with inflation.

So what can you do? The first step would be to get informed. We can help you with the life insurance long term care planning side. Simply reach out to us by phone or email to get started. If you are interested in a Genworth Long-Term Care Insurance policy or any of the other companies we represent, please give us a call today.

 

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2 comments… add one
  • Linda Jacobs May 24, 2018, 1:36 pm

    Mom is 81. care costs $3000.+ at care home placed in home Feb 2017. Has dementia and hi blood pressure. Overall health good. What would be a ballpark figure for cost of long term insurance. Live in N. Calif. city of American Canyon. Also seeking out medicaid.

    • Insurance&Estates May 25, 2018, 7:54 am

      Hi Linda,

      Please give us a call when you get an opportunity.

      Thank you,

      I&E

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