On September 16, 2013, Genworth Life Insurance Company will be increasing the crediting
interest rate for the new Total Living Coverage® (TLC) product from 3.00% to 3.25%. As a
result, our competitive benefits in the Linked Benefits market segment will increase by 6-8%.
This change affects the new TLC product only. Crediting interest rate for the old product sold
in CA, CT, FL, HI, IN, NJ and NY will remain at the contractual minimum of 3.50%.
Competitive Comparison
Here are examples of the added benefit provided by the interest rate increase as compared to
a competitor: $100,000 initial premium, male, issue age 60 and 65, Preferred life and long term
care (LTC) insurance risk classes, 20% Couples Discount, 2-year Accelerated Benefit Rider
(ABR) + 4-year Extension of Benefits Rider (EBR), with Return of Premium Rider (ROP):
Issue Age Genworth Life 3.25% Company A 4.0% (fixed) Difference
Specified Amount 60 $179,452 $137,393 $42,059
65 $152,779 $121,366 $31,413
LTC Lifetime Maximum 60 $538,356 $412,179 $126,177
65 $458,337 $364,098 $94,239
Values shown are not guaranteed, based on current interest rates (effective as noted). For
both companies, values assume no loans, withdrawals or long term care claims have been
made. No premium in addition to the initial premium is required for TLC guaranteed values.
The chart shown is based on research conducted by Genworth. To the best of our
knowledge, the competitive information is current and believed to be accurate as of
05/31/13. Genworth is not affiliated with the competitor used in the comparison.
Frequently Asked Questions
1. What are the transition rules?
- All pending policies as of 9/16/13 will receive the higher interest rate unless the pending policy has a Temporary Insurance Application and Agreement (TIAA) dated prior to 9/16/13 or a request to back date has been made.
- A policy issued (out for delivery and not in force yet) issued prior to 9/16/13 with an outstanding policy delivery acknowledgement form (PDA) will receive the new interest rate if the PDA is returned with a signature date on or after 9/16/13.
- Any applications received in house with paid premium (TIAA) before 9/16/13 will receive the 3.00% interest rate
- Cases issued prior to 9/16/13 with a completed PDA will not be reissued for the new rate.
2. Are any additional actions required to ensure the customer who qualifies for the higher rate receives it?
For policies issued prior to 9/16/13 with an outstanding PDA that is returned with a signature and date on or after 9/16/13, a revised illustration will need to be signed by the customer and the policy reissued. The old policy must be returned to the home office.
3. Do I need to update WinFlex?
Yes, you will need to update your desktop version. WinFlex Web will automatically update on Monday, 9/16/13.
4. How does this change impact commissions?
The new interest crediting rate has no impact on commissions.
5. What will be the impact of the rate change on “Paid for” inforce TLC policies?
There will be no impact on inforce policies. Please note that, if the policy is already in a “Paid For” status, we will not reissue for the new rate.
6. How will you determine the rate for a 1035 exchange policy?
1035 exchange processing will be handled normally. The policy date will be determined by the date the final 1035 exchange funds are received by the home office.
7. How will this rate change impact death and LTC insurance benefits?
The 3.25% crediting rate will increase the amount of death and LTC insurance benefits the initial premium will purchase by about 6-8% as compared to what the same initial premium would have purchased at 3.00% crediting rate.
8. Does this change affect marketing materials?
Yes, some marketing pieces have been updated to reflect the new interest crediting rate. They are now available through the usual ordering process. You can also find them on the Long Term Care Sales Center at genworth.com/TLC.