The insurance industry has not done a good job of handling long-term-care insurance in the past and needs to revamp its approach, says David O’Leary, president & CEO of Genworth’s US Life Insurance division.
For one thing, the pricing system for long-term care has to be revised to allow small annual increases when necessary, rather than waiting to implement large increases every few years, he says. This allows for better planning for advisors and their clients.
O’Leary was hired at Genworth in 2015 and is an advocate for long term care pricing reform.
Estimates vary but it is usually said that 58 percent of men and 79 percent of women aged 65 and older will need long-term care at some point in their lives.
In addition to pricing reform, different types of coverage need to be offered so consumers can buy based on their risk. Genworth is now offering a product that allows consumers to buy a smaller long term care benefit, enabling them to choose how and where they want to age, whether it is at home or in a facility.
Long term care benefits are now being offered as riders on annuities and life insurance.
“The industry is continuing to evolve as the market changes,” says O’Leary. “Not everyone needs a Cadillac policy, so they can now buy ‘slices’ of coverage.”
Genworth also is trying to expand its customer base, and therefore expand the risk pool, by working with employers and associations, such as credit unions and labor unions, to offer group long term care insurance.