How To Sell Long Term Care Insurance On Prudential

Transcription

1 ILTC Insurance General Agency Frequently Asked Questions Instructions: Click on any question below to jump to the correct answer Contents What was announced today?... 2 Why is Prudential discontinuing sales of its individual long-term care insurance (LTCi) policies?... 2 Why is Prudential continuing to offer group long-term care insurance coverage?... 2 What group long-term care insurance policies does Prudential offer?... 2 When will Prudential stop accepting applications for individual long-term care insurance policies?... 2 What is the timing on multi-life cases, including case approvals and applications received?... 2 What happens if my application is currently in underwriting?... 2 How will the underwriting appeals process work?... 2 How are existing individual policyholders affected by this action?... 3 Can policyholders/insureds still make coverage changes?... 3 How will we handle benefit increases?... 3 Will individual LTCi policies continue to be available for viewing on the LTC Producer Portal?... 3 How will this action impact producer commissions?... 3 How will 2012 GA bonuses be affected?... 3 What is the deadline for appointing new producers?... 3 How does this decision affect our recent communications related to the temporary suspension of individual LTCi sales in California?... 3 Is Prudential committed to the LTCi industry?... 4 What are the case size requirements and underwriting standards for Prudential s group long-term care insurance products?... 4 Will inforce rates increase for existing individual or group policyholders?... 4 Will Prudential decrease staff as a result of this action?... 4 Are you looking to sell your existing individual long-term care insurance book?... 4 Will you reinsure your long-term care insurance business?... 4 Would Prudential consider re-entering the individual long-term care insurance market in the future? 4 How are Prudential s financial ratings?... 4 How much individual and group long-term care insurance do you have in force as of December 31, 2011?... 5 What were the earnings contributions of individual and group LTC to Prudential s results for the year 2011?... 5 Who should I contact with additional questions or for updates on pending business?

2 What was announced today? Prudential Group Insurance announced that it will focus solely on group long-term care insurance and discontinue the sale of individual long-term care products. Why is Prudential discontinuing sales of its individual long-term care insurance (LTCi) policies? The decision to exit the individual long-term care business reflects the challenging economics of the individual market and our desire to focus our resources and capital on the group market where we see the greatest opportunity. Why is Prudential continuing to offer group long-term care insurance coverage? For more than 25 years, group long-term care insurance has complemented our broader insurance product offering which includes life, disability, accidental death and dismemberment, and dental. The demographics of the employer market align well with our strategy of providing voluntary benefit solutions to individuals through our group marketing and distribution platforms. What group long-term care insurance policies does Prudential offer? Prudential will continue to offer its Group LTCi products, including Solid Solutions SM and LTC123 SM. When will Prudential stop accepting applications for individual long-term care insurance policies? All individual long-term care applications must be received by March 30, Any applications received after March 30, 2012 will not be processed. What is the timing on multi-life cases, including case approvals and applications received? Employer Sponsored Program (ESP) and Affiliation cases must be approved on or before March 30, Once approved, applications under these programs must be received no later than 60 days from the date of case approval or May 30, 2012, whichever is sooner. All ESP and Affiliation cases approved prior to January 30, 2012 will be closed to new entrants effective March 30, For cases approved after January 30, cases will be closed 60 days from the case approval date but no later than May 30, What happens if my application is currently in underwriting? Any applications currently in-house will be processed under our normal processing guidelines. How will the underwriting appeals process work? As long as applications are received by the dates outlined above, underwriting decisions as well as appeals will be processed in accordance with our normal procedures. 2

3 How are existing individual policyholders affected by this action? Existing individual long-term care insurance policyholders will continue to be covered under the terms of their Prudential long-term care insurance policies, which are guaranteed renewable. This means that as long as premiums are paid on time, and benefits are not exhausted, coverage cannot be cancelled, although premiums can be changed based on experience, on a class basis, in accordance with the terms and conditions of the policy. Policyholders will continue to receive customer service and claims support. Can policyholders/insureds still make coverage changes? Plan upgrades will be allowed as permitted by their contract. All existing individual long-term care insurance policyholders will receive a letter to this effect. How will we handle benefit increases? During the 30-day free look period, policyholders/insureds may increase policy benefits by submitting a benefit change form per our normal process. For existing policyholders/insureds outside of their 30-day free look period, benefit increases may not be made (except as permitted by their contract). Benefit change forms received by Prudential on March 7 or prior will be reviewed and processed as allowable under our standard guidelines. Will individual LTCi policies continue to be available for viewing on the LTC Producer Portal? Yes. How will this action impact producer commissions? Commissions will continue to be paid out per the terms of the specific contract. How will 2012 General Agency (GA) bonuses be affected? GA bonuses will be paid in 2012 using the 2011 formula, pro-rated based on four months of production. Applications signed on or before March 7 and received by Prudential on or before March 16 (including applications from previously approved ESP and Affiliation cases) will be counted toward the 2012 bonus. Applications signed March 8 or later; or received March 17 or later; will not be counted toward the 2012 bonus. General Agencies will be receiving additional information about the 2012 bonus program shortly. What is the deadline for appointing new producers? Producer appointment paperwork received on or before March 30, 2012 will be processed as long as it s accompanied by a completed application. Any appointment paperwork received after March 30, 2012 will not be processed. How does this decision affect our recent communications related to the temporary suspension of individual LTCi sales in California? Because we are discontinuing sales of our individual LTCi products, we no longer have plans to re-enter California. 3

4 Is Prudential committed to the LTCi industry? Prudential believes in the importance of protection against the high costs and impact of a chronic illness or disability. That s why we will continue to offer long-term care insurance coverage through our Group distribution channel. We expect to continue as a leader in the group market as we enhance our current product offerings and develop other innovative products for the employer and association markets. In addition, we will continue to provide customer service and support to all of our policyholders. What are the case size requirements and underwriting standards for Prudential s group long-term care insurance products? Core/Buy-Up Product (Employer contribution required for all employees) lives - Guaranteed issue for core, simplified issue for active employees for buyup (standard plan design) 500+ lives - Guaranteed issue for core and buy-up for active employees Voluntary Product (100% Employee Paid) 250 to 499 lives LTC 123 product, simplified issue for active employees and 5% minimum participation requirement 500+ lives Solid Solutions product, guaranteed issue for active employees and no minimum participation requirement Will inforce rates increase for existing individual or group policyholders? As we always have, we will continue to monitor our experience on our inforce block and make rate changes on a class basis as appropriate. Will Prudential decrease staff as a result of this action? Yes. Approximately 45 employees will be impacted as a result of this decision. Support mechanisms, including outplacement counseling, are in place to assist impacted employees through the transition, and they are free to apply for open positions throughout the company. Are you looking to sell your existing individual long-term care insurance book? We currently have no plans to sell any portion of our individual or group long-term care insurance book. Will you reinsure your long-term care insurance business? We currently have no plans to re-insure our long-term care insurance business. Would Prudential consider re-entering the individual long-term care insurance market in the future? Currently we have no plans to re-enter the individual long-term care insurance market. How are Prudential s financial ratings? Prudential s financial ratings continue to be among the strongest in the insurance and financial services industry. Visit for more information. 4

5 How much individual and group long-term care insurance do you have in force as of December 31, 2011? * Individual: 85,730 policies generating $201 million in annualized premium Group: 131,328 certificates generating $125.8 million in annualized premium * 2011 LIMRA Preliminary Individual and Group LTCi In-Force Surveys What were the earnings contributions of individual and group LTC to Prudential s results for the year 2011? The company has not disclosed earnings results at the product level. Who should I contact with additional questions or for updates on pending business? Elite General Agencies Please contact the Producer Service Center at All other General Agencies Please contact customer service at