Transamerica Long Term Care is realigning long-term care insurance (LTCI) prices and product features in response to low interest rates and recent "industry dynamics," the company says.
Transamerica LTC, Hurst, Texas, says it wants to increase premium rates on new LTCI business 15% in all states.
The company also intends to:
- Eliminate the lifetime benefit period option.
- Stop accepting 1035 exchanges into its LTC product.
- Suspend sales of limited pay options, including the single-pay, pay-to-65, 10-pay and 15-pay options.
- Reduce a discount for spouses of policyholders to 20%, from 30%.
- Reduce the preferred health discount for single applicants to 10%, from 15%.
Managers of several websites have posted copies of the Transamerica LTC notice.
Representatives of the company, which is a unit of a U.S. subsidiary of AEGON N.V., The Hague, Netherlands (NYSE:AEG), were not immediately available to comment on the notice.
The company emphasizes that it wants to continue to be a leader in the LTCI market.
"To achieve that objective, we actively manage our long term care business to ensure our programs and offerings align with our core underwriting and business management philosophy," the company says in a statement accompanying the product change notice. "We believe that long term care is a core product that helps us achieve our key objective: 'Protecting Families and Their Dreams.'"
Transamerica LTC is launching a new Trans Ace product with a long-term care (LTC) rider, and it also is developing new chronic care and critical care life offerings, the company says.
Transamerica LTC does not "anticipate any changes to agent compensation," the company says.
The company hopes to begin implementing the changes as soon as approvals are received from the states and Interstate Insurance Product Regulation Compact, which accepts product and rate filings for many states.
Transamerica LTC says it believes its products continue to offer many competitive advantages, including a 0-day elimination period for home health care and a cash benefit.