Why are premiums swelling so much? There were several factors, but two of the more serious problems involved the predictions insurers made roughly two decades ago. Not only did they underestimate how long policyholders would live, they overestimated how many people would drop their policies, which meant insurers would not have to pay claims. The financial pressures have left only about a dozen companies selling new coverage, down from more than 100 in the market’s heyday. For many existing policies, they’re seeking rate increases. But not all states have granted them, which Mr. White said meant policyholders in certain states are subsidizing those in others. The task force is hoping to address the unpredictability and lumpiness of these pricing shocks. But that’s little comfort for policyholders who have already received notices for price increases. Regulators approved higher premiums on at least 84,000 policyholders at Genworth alone during the second quarter, according to a sampling of filings recently analyzed by S&P Global Market Intelligence. Deciding whether to renew one of these policies can feel like an impossible calculation, and there’s a lot to consider. Insurers generally provide policyholders with several options in between accepting a full rate increase and canceling the… Read full this story
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