*Update 2018 – Genworth no longer sells life insurance policies. They have stopped selling both no medical exams and traditionally underwritten policies.*
There are big changes happening with Genworth Life Insurance.
You might be feeling very worried if you have you have a Genworth life insurance policy.
One key concern you might be thinking about is whether or not the company will be able to honor any future life insurance claims.
Or, you might be wondering what would happen if they sold off a chunk of business to another life insurer.
Should you jump ship and go to another company now?
We’ll answer these and other questions.
The main thing you need to know is that you shouldn’t worry about any of these issues and I’ll explain why.
Table of Contents:
What Happened to Genworth Life Insurance?
The company took a big financial hit over the past few years. This happens occasionally to large corporations. The usual strategy to address large financial fluctuations is to change the business model and fix things through re-structuring.
Genworth Life Insurance Co is owned by Genworth Financial Inc. The company took a huge financial hit when the company suffered a $1.24 Billion loss related to its long-term coverage, and lower than expected interest rates.
Consequently, part of the restructuring process resulted in the suspension of the sales of both life insurance and annuities.
Genworth said it would suspend sales of its traditional life coverage and fixed-annuity products in the first quarter of this year, so the company can focus on fixing a business unit that provides long-term care coverage. Work It Lynchburg
What is going to happen to the life insurance company portion of Genworth Financial itself remains unclear, as the company is still considering its options and strategic approach.
Although shares in the company have dropped significantly, keep in mind that this is a huge company that has been around for a long time. The company is not going to go under any time soon.
What Happens to My Life Insurance Policy if Genworth Goes Bankrupt?
Life insurance is heavily regulated and protected both Federally and by the State Insurance Commission. It is exceptionally rare for any life insurer to go bankrupt and it’s highly unlikely that this will occur with Genworth because of its size and overall assets.
Even if this did happen, the life insurance coverage will be provided through the Insurance Guaranty Association that exists in each state which ensures that claims will be paid subject to the state’s coverage limits.
Your life insurance claim with Genworth will be honored regardless of what happens, so you can breathe a sigh of relief.
What Happens If Genworth Sells Its Life Insurance Portion of the Business?
The answer is: Nothing will change regarding the terms of your policy.
The only thing that you will notice is the logo on the letterhead of your policy will be that of the new insurer.
All guarantees that you have on your existing Genworth life insurance policy remain the same.
Should I Change Life Insurers?
You don’t really have to change and should only really consider doing so if you have a very new policy and are uncomfortable with the situation and want peace of mind.
On the other hand, if you have had a policy with Genworth for a while and think you want life insurance with another insurer, there are several things to consider beforehand including:
- A new policy with another insurer will be based on your current age and health status, so a new policy is very likely going to cost you more. If your health has deteriorated significantly, you could be declined altogether or the cost of a new policy may be too expensive.
- Genworth was just about the only insurer that offered a 30 year Term UL for those in the age range of 60 – 65 (they have since reduced this to age 59 which is standard for most insurers)
- Genworth was one of the most lenient insurers when it came to health issues, and for people over the age of 65.
- Genworth was also one of the most affordable companies when it came to Term life insurance and GUL (Guaranteed Universal Life insurance)
So, if you fall into any of these categories when you bought a policy, it might not be a good idea to jump ship to another life insurer right now.
Just keep in mind, the company will honor its life insurance claims!
Even if you don’t change your policy, it’s a good idea to get a quote.
Speak to one of our independent agents about your current insurance needs and we will make sure you get the best possible rate available with the remaining companies.
Will I Be Able to Find Low Cost Life Insurance If I Want to Change My Policy?
The answer is yes!
However, if you just recently bought a policy from them and are still worried, you might consider getting a quote from an A+ rated carrier, if you feel this would give you more peace of mind.
Here at Huntley Wealth, we have excellent carriers in all the areas where Genworth excelled and access to over 40 Top Life Insurers.
We also have carriers that are super fair to seniors and companies who offer Universal Life with a no-lapse guarantee (Guaranteed Universal Life) to various ages from 90 – 121. We also work with insurers that offer dozens of Term life insurance options.
Overall, my opinion is that if you just bought a policy over the past couple of years, you might want to consider switching.
*While we make every effort to keep our site updated, please be aware that "timely" information on this page, such as quote estimates, or pertinent details about companies, may only be accurate as of its last edit day. Huntley Wealth & Insurance Services and its representatives do not give legal or tax advice. Please consult your own legal or tax adviser.
My Genworth Policy is a LP Flex Plus (L55) what does that mean, purchased in 2007
You would need to contact your agent or Genworth directly and fill out a change of beneficiary form. The owner must sign.
Hey Jim,
I’m sorry for the confusion. We are not Genworth, nor do we service Genworth policies. You might try contacting them directly.
I want to change beneficiary information. Please advise process.
We are 65 and have had Genworth long term care policies for over 15 years (we bought early – because we got into the rates that were frozen, had cost of living increase and unlimited payout).
For this reason we keep paying and hoping as you’ve said that a new big company takes over. A few years back the rates were approved to increase and went up about 40 %.
The question is : What happens to our investment over all these years if the company goes under. We very much hope to live to a nice old age before we’d have any need for long term care.
Do we have any protection for the money we’ve paid over these years.
Hello Leigh,
Oh that is a hard pill to swallow. Unfortunately premiums paid into insurance are not an “investment.” They belong to the insurance company now, and your only hope of getting that money back is using the benefit. The good news is if they were to go under, very likely a larger company would absorb their policies AND keep the benefits. No promises of course. Good luck.
Has Genworth increased its COI rates on its First Choice Gold UL or on other ULs? If so any idea how close the costs are to the guaranteed maximums?
Hello, I’m sorry to hear about that. There still may be affordable options if your mother is still in good health. I know renewable term premiums are expensive. Give us a call at 888-603-2876 and we’ll help you out.
I bought a Genworth term policy on my mother 15 years ago. She is now 72. I was not aware the policy ended in 2009. Genworth said it is now changed to an annual renewable term policy. I would like to keep the policy but the rates are going up a lot every year. So I don’t know how much longer I can keep it. I called Genworth and they said it is not convertable. Are there any other options? Any more affordable options? Thank you in advance.
I have a whole life Genworth policy. Who do I cal to find out if the policy is still in effect? What if I pass away and my spouse needs to make a claim? who do I contact? We have not had any correspondence from Genworth.
Hello Paul,
The agent who sold you the policy or call Genworth policy holder services directly at 1 (888) 436-9678.
I bought a single premium deferred annuity in Feb 2016. Should I be concerned whether after 7 years my money will still be available?
Does the fact that Genworth sold to Chinese company change anything with regard to protection of term policies? The rating of the insurer is poor. Can you clarify?
Hello Lisa, A number of US insurers are now owned by Chinese companies, which should not impact the protection of term policies. Genworth is still in flux as of this writing, but we both have Genworth policies ourselves, and are keeping them, as we expect the company will likely be picked up by another large carrier. But, we don’t have a crystal ball, so don’t want to tell you what to do, just let you know our feelings… Best wishes!
What about annuity policies, I have one with Genworth. Are they treated the same as life insurance policies?
Have had life ins. With genworth a long time for me and my husband. We are in our 70″s. Should we add or change our benefiaries.
Hello Charlotte,
Just be sure your account information is all up to date. Including your correct mailing address and your beneficiaries. Certainly you can and should make any changes as you see fit. Best wishes!
We have had long term health care policies with Genworth for 3 years. Should we be concerned?
Hello Ann,
It’s nerve wracking to have a carrier quit issuing policies and more so to see them up for sale. We also have policies with Genworth and have every confidence that they will continue to pay their claims. That said, we have no crystal ball of course, so you must do what makes you most comfortable, but we are holding onto our policies, and trust this huge and powerful industry will stand in support. Best wishes!
I’m a 62 year old Louisiana resident with a term life policy with Genworth ($300K). My Investment counselor recommended I talk with Genworth about extending my Insurance coverage until my 70s as I plan to work a least until age 70. Myhealth is good with some past issues and want to understand my options with Genworth as opposed to “shopping around”. Thanks,
Hi William,
Thanks for your question! I would need to know what Genworth product you purchased. Can you tell me the actual name of the product from your policy, as well as the date it’s term is up? Then I can tell you what options you may have to continue the coverage, if possible. Thank you!
Hi Chris,
Im concern about my Genworth policy–I have a 800k term life policy with them, I heard that Insurance Guaranty Association for the state of CA will only pay $300k is this correct?
Also if they don’t have the life insurance business are they going to use my premiums to pay for LTC? I thought LTC is the reason why are they in this position–why not shut down LTC instead of life insurance?
Hello Liz,
You are correct, as a California resident policy holder, in the very remote case of liquidation of Genworth, the California Health & Life Insurance Guarantee Association would pay as follows: Life insurance death benefit protection: 80% of the policy death benefit up to a maximum of $300,000; However, as Chris mentioned in the article, our sincere expectation is that Genworth will not have to be liquidated nor become bankrupt, as we expect any number of other much better resolutions will occur. Remember, just because they are ‘shutting down life insurance’ doesn’t mean they are ending any existing policies. They are just (as of now) not writing new life insurance policies. Thanks for the question!