The Boston Globe has reported that John Hancock Insurance will discontinue new sales of the company’s individual long-term care insurance.
John Hancock is owned by Manulife Financial Corp., which announced the decision in a news release focused on its third-quarter earnings. In the third quarter, Manulife’s net income rose to $428 million compared with $387 million in the third quarter of 2015.
“Today there are far fewer outlets through which individual LTC insurance is sold, impacting the growth potential for the product,” said Melissa Berczuk, a spokeswoman for the company. “Also, consumer demand for individual LTC insurance has fallen and remains stagnant.”
John Hancock discontinued selling new group policies in 2010.
The company has promised to continue supporting their existing 1.2 million long-term care policyholders, however, the last day it will accept applications for new programs will be December 2.
While the company will no longer provide standalone long-term care policies, they said they intended “to continue to offer long-term care coverage as an accelerated benefit rider to our wide range of life insurance products, as this has become an increasingly popular alternative to stand-alone long-term care insurance policies in recent years.”
The Federal Long Term Care Insurance Program upset many when it raised premiums by an average of 83 percent after signing a new seven-year contract with John Hancock Life and Health Insurance Company in April.
John Hancock was the prior carrier and the only bidder to provide insurance coverage for the FLTCIP. Long Term Care Partners, LLC, will continue to administer the FLTCIP.
According to OPM, John Hancock proposed significantly higher premiums because recent analysis of the program, using updated assumptions based on identified trends and actual claims experience, indicated that the current FLTCIP premiums would not be sufficient to meet the future, projected costs of the benefits.
In the FLTCIP booklet provided by OPM, it states that “Your insurance coverage is guaranteed renewable. It can never be canceled by the insurance carrier as long as you pay your premiums. It cannot be canceled due to your age or a change in your health.”
It is not known whether the Federal Long Term Care Insurance Program will be able to continue after the current seven-year contract expires in 2023.