Genworth Life And Annuity Insurance Company Review
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Genworth is a stock life insurance company whose charter was granted by the Commonwealth of Virginia in 1871. It was incorporated to provide a solution to the difficulties that people go through when they lose their loved ones. So, to mitigate the effect, Genworth Life and Annuity Insurance Company choose to simplify the process and reduce the pain.
Plans At Glance
Initially, the company focused on three segments:
- US Mortgage
- Retirement & Protection
It offered different products that include:
- Mortgage Insurance
- Life insurance
- Long-Term Care Insurance
Rating of Genworth
The company has received a “B’’ (Fair) rating from A.M. Best.
Any company’s rating index is typically based on its security and financial strength. It is an important aspect when determining whether to invest in a company or not. If a company has good ratings, it is a sign that it holds strong assets.
Such a company is capable of making payments without a problem. A company that enjoys an excellent rating can take care of its customers and processing claims faster.
Genworth Life And Annuity Insurance Company History
With A.G. Mcllwaine as the president, the company offered the first policies to locals. Later it expanded its operations and spread to Richmond and other areas. It later moved its headquarters to Richmond.
In the 20th century, the company introduced several products through its intermediate divisions. Some of the products offered by Intermediate divisions include the limited payment policies, endowment policies, and term life products.
The ordinary division offered whole life annuity while the industrial division focused on premium products.
By 1928, it came up with first annuities that include long term care products, lifestyle protection, and mortgage insurance. Between 1986 and 1995, the company went through a great deal of transformation and acquisition.
Life of Virginia was sold to AON Corporation. Later GE financial services purchased AON corporation’s life insurance companies. Thus, the Life of Virginia became GE Financial Assurance which later became GE’s capital Assurance Company.
On October 23, 2003, it was incorporated and became Genworth Financial, Inc. In 2004 May, the company became a public company through the initial public offering.
In October 2003, it was incorporated as Genworth Financial Inc. in 2006; GE relinquished its stake in the company at a cost of $2.8 billion. First Colony Life insurance merged with Annuity Assurance Company Genworth Financial Inc. entity.
Also, Genworth Financial sold its employee benefits program to Sun Life. It catapulted it to the top of the market, in terms of employee benefit programs.
Genworth had over 15 million customers by 2011 with the customers scattered in over 25 countries. The company held an IPO for Genworth MI Canada in 2009: raising over $850 million from the Toronto Stock Exchange.
In 2013, the company reorganized itself legally, leading to the creation of a holding company that removed the mortgage insurance departments from the firm. In 2016, Genworth Financial Inc. was sold to China OceanwideHoldin Group at a cost of $2.7 billion.
History of Products and Services
By 2013, the company had about $728 billion worth of insurance. It offered a range of products and services such as mortgage and long term care insurance. It was responsible for providing long term care cover for employees and supporting caregivers.
By 2016, it was already offering Index Universal Life Insurance, Term Life Insurance, Universal Life, and Whole Life Insurance. Other products included Fixed Index Annuities, Fixed Deferred, and Fixed Immediate Annuities.
In 2016, the company suspended the sale of Life Insurance and Annuities. This put the company’s existing business books into a runoff.
Fraud Lawsuit History
Genworth has spent some of its time-fighting accusations in courts. It was accused of disseminating misleading information to the public. Investors too brought another lawsuit in Eastern District Virginia.
In one of the suits, Genworth was accused of providing misleading information on its long term care insurance. It was also accused of falsifying its financial statement.
Factors To Consider
Protection & Retirement
The company provides several life insurance policies that include medicare supplement and universal policies. They offer their customer’s wealth accumulation as well as institutional and income distribution.
Also, it offers other products such as group and individual annuities that are provided through variable life insurance. It also has a host of institutional products like guarantee investment contracts, funding agreements, and others.
The company is well-positioned to take on any opportunities that emerge. The aging U.S population guarantees growing retirement needs. Also, the rise of life expectancy to about 80 years for women and 75 years for men means that the demand for annuities and insurance will continue to rise.
Also, the other important factor is that the U.S saving rate is at their lowest level. It implies that there will be a need for individuals to create an alternative source of income in their retirement.
It will also increase the demand for wealth accumulation through various tools like annuities. Thus, Genworth is best placed to take advantage of these opportunities.
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Increasing Lifestyle Protection Gap
Reduction in the defined benefit plans and a host of other undefined factors are creating a security gap in many societies. Also, a few people have insurance and other coverage assets to ensure that life is bearable while the majority of them do not.
Declining savings, rising nursing costs, and the shifting burdens to individuals by employers and government are widening the gap. Besides, it implies that entities such as Genworth have a crucial role to play in the economy.
Further, the unforeseen events and trends are likely to drive up the demand for life insurance and asset accumulation.
General Observations on Genworth
Genworth life and annuity insurance company was one of the best life insurance options before discontinuing some of its services.
Unfortunately, this is no longer the case. However, they have a range of long term care options to be considered when looking for coverage. But the company still offers group LTC insurance.
The company remains committed to serving its customers. It still participates in public advocacy on issues that matter to businesses. The company also provides tools to help people achieve financial security.
It is still committed to helping families become financially secure through the Genworth Foundation. The foundation avails grants to nonprofits across the globe to address their financial needs.
Since 2016, the company has experienced a reduction in its earnings. So, it is negotiating with China Oceanwide, for acquisition. The acquisition has been delayed by international, national, and state regulations.
Long Term Care
It is a good policy for anyone that will need long term care policy as they age. If you find yourself unable to perform any of the daily tasks you may need to consider the care. The activities include bathing, moving from place to place, dressing, or feeding yourself.
The cost of such care will be calculated depending on your permanent place of abode and the type of care you need.
Group Long Term Care
It is one of the products available to anyone who is currently in employment and interested in group long term insurance options.
Genworth has programs designed for employers with more than 500 employees. For employer-paid programs, the care is available for more than 150 employees.
Term Life Product
Genworth offers both Term Life and Universal Life products. It is one of the best life and annuity insurance companies with very competitive rates. Their rates are favorable, compared to products offered by other insurance companies.
Term life is less expensive since it only insures a person for a certain period. It does not come with cash value. It will guarantee you peace of mind for 30, 20, 10, or 5-year terms.
Universal and Term Life
The product combines both Tax-Deferred Cash Value and Death Benefit. Further its Index Universal Life product gives clients more options. It allows long term care services such as Genworth Accelerated Benefit rider.
Also, it features more risks and is likely to yield more returns compared to a life insurance policy. It also offers a supplementary income for the policyholders in retirement.
Thus, Genworth could be the best policy if you choose to use it as a protective cover. You should not treat it as an investment vehicle.
For anyone considering long term care for their aging parents, paying a small premium now is important. It can help save thousands of shillings in the future. It protects your finances from being wrecked by bills.
Also, it ensures that the family gets the health assistance it needs. It is the secret of getting more tomorrow by spending just a fraction today. It allows people to live their lives on their terms.
The following products were discontinued in 2016:
It was one of the products offered under Genworth’s term life insurance. It was available in terms of fixed premium length of 20, 15, and 10 years. The product allowed the policyholder to continue the coverage even after leveling the term contract.
This was to be done on understanding that the premium would continue to increase on an annual basis. The Product had a conversion option that allowed the Colony term to become permanent universal life insurance.
Foundation Builder IUL
This product is similar to asset builder IUL but it offered a third-year guarantee. This was more than the 10 years no lapse guarantee offered by Asset Builder. It meant that if the policyholder paid premiums on time, the cover would remain in place irrespective of the changes in the cash value or cost.
Asset Builder IUL
IUL stands for Index Universal Life. The product was concerned with providing death benefit protection. This was intended to help grow and accumulate cash value. The product made use of a crediting strategy based on the changes in the S&P
Total Living Coverage
It combined both term care benefits and universal life insurance coverage. It was an ideal cover for 55-75-year-old people. These are people that had retired or those nearing retirement and in need of inexpensive and affordable long term care option.
The other products that Genworth stopped offering include immediate annuities and premium deferred. The coverage collapsed because of repositioning occasioned by financial constraints.
What Happened to the Existing Genworth Policyholders?
After discontinuing selling its life insurance products, Genworth announced that the move did not diminish their commitment to serving and meeting the needs of their existing 2.8 million annuity and life insurance policyholders. It further said that it had only stopped selling new policies forthwith.
Current Products of Genworth
Although you cannot get a life insurance cover with Genworth, it still offers other products worth considering. These are high-quality services that are worth looking at.
Here are the top products they offer and which you may want to consider.
Long Term Care Insurance
The company has more than forty years of experience dealing and handling long term care insurance matters. During the period, it has issued more than a million long term care covers over time.
It is one of the policies available for home-based care at a care facility or a skilled nursing home. Already, more than 200,000 policyholders have received the care over the past 40 years.
Immediate Need Annuity
This product is an ideal one for anyone who fears running out of funds in retirement. It is a type of annuity that guarantees a consistent stream of income until one dies. It will continue running even if the death is far in the future.
It is another Genworth product that was developed for families and elders. It entails providing information to home care agencies, nursing homes, and assisted facilities.
The product offers mortgage insurance to anyone planning to purchase a home. It allows one to optimize on low-interest-rate without the need of making the 20% down payment.
What Can Make Genworth Capitalize?
The firm has a range of items it can capitalize on in its endeavor to satisfy the needs of its customers.
Here are some key aspects that will form the basis of its future growth.
Genworth continues to lead in product innovation. This enables it to continue offering products that consumers need at different stages.
Also, the company is working hard to ensure that it declares good returns at the end of each financial year. It strives to offer quality services to its clients.
Good Relationship with Other Firms
Genworth is committed to maintaining good relationships with other firms and financial intermediaries. It works with independent producers, sales teams, and leading distributors.
It provides support and solutions to all intended individuals and groups so as to provide value to their clients.
Capital Market Solution
The company is committed to developing solutions in the capital and investment markets. It is one of the moves that will help companies use their capital efficiently. This is intended to lower the risks and will play an important role in new business models.
Genworth uses the latest technology to improve service delivery. It has automated most of the processes to reduce the time it takes to respond to issues.
Also, the company has enlisted back office support services to better its performance. This is intended to enhance efficiency and give its activities a professional touch.
It is in the interest of Genworth to remain compliant with the regulations. To this end, the company employs and adheres to risk management processes in all aspects of its functions. The processes are employed in product development, asset-liability management, investment management, and program development.
Genworth has the requisite rating and the capital strength that gives it a competitive advantage. It has a good percentage of its finances invested in fixed and equity securities. It has also invested in hedging funds and many more.
The company is committed to increasing its revenue growth while protecting its margin. The idea is to expand income and bolster returns on investment. To achieve this, the company focuses on the following:
Seize attractive growth prospects in the market- to this end, it has positioned resources to capitalize on emerging opportunities in the market.
Planning for Retirement
The company believes that growth will only be driven by an increase in population. So, products should be designed to help the existing clients grow their assets. It should be able to easily convert them into income that they can rely on in their retirement.
Strengthen Distribution Channel
This will be done by strengthening the areas where the company has a distinct advantage. Some of the areas to be targeted are:
It has introduced many products like Annuity, with both guaranteed withdrawal benefits. It has also introduced other income features to help members qualify for 401(k) plans. Some of the innovations to be implemented include automated underwriting in life insurance and customer care services.
The strategy includes offering strong educational support to the sales team. It also entails offering them tailored programs that address their needs.
They are intended to increase capital and enhance earnings. This is intended to improve the speed of underwriting while lowering operating costs. The company will employ the following methods to help increase the returns.
- Optimize Business Mix: Where it will introduce new products in the market to meet customers emerging needs. It will also revise the pricing strategy and target high-end markets.
- Idle Fund: To move idle funds to the capital market and redeploy capital from the lower returning ventures.
- Cost Minimization: Reducing the cost of operation while maintaining a strong service level.
- Investment Enhancement: The company seeks to increase the yields in investment. It will do this by evaluating the asset mix to reposition it while pursuing more investment. To do this, it will use proactive management strategies to adopt and implement the best technology. It will also hire experienced risk professionals and portfolio managers to enhance capabilities.
Shopping for life insurance can sometimes be overwhelming. One for this is the difficulty to think about your death. And even when it happens, it is always hard to know how life insurance works and where to find the best agent.
But it becomes less troublesome if you have a few insurance companies on the card. Here is what you expect from Genworth.
On the 7th of March, 2016 Genworth stopped offering fixed annuity and life insurance products. Initially, the company offered a variety of life insurance policies to include universal life insurance and term insurance.
Instead; it announced that it would turn its focus to the long term care market.
Of course, your needs and the financial position you find yourself in will determine the choices you make.
If you are looking for an inexpensive option, a term life insurance could be the best option for you. The policy is ideal for a shorter period and could be supplemented by the other investment options.
Also, a universal life policy may be a better option for anyone looking for flexibility. It comes with a flexible premium and fluctuates with income. It is one of the products that allow one to make monthly payments depending on their income.
Moreover, you have the option to select paying the same amount of premiums each month. You can also choose a Universal Life Policy that does not lapse. It guarantees that your policy will never expire. However, you must ensure that you pay the premium consistently.
Unfortunately, Genworth is not offering all these products at the moment. You will need to check with them before you decide to enroll.