Genworth is promoting it's new long term care insurance product, Cornerstone Advantage, as an affordable LTCi solution. In today's market, there is only one way for an insurance company to offer lower priced long term care insurance coverage - and this is to cut their costs! But how is Genworth doing it?



I was recently asked that very same question. Since I haven't been able to get my hands on a policy or even an Outline of Coverage yet, I went to the Genworth website to look at their consumer marketing brochure. The wording is a bit vague, but there are some points that stood out to me.

Please keep in mind that I'm NOT a licensed Long Term Care insurance agent. You'll want to get professional advice before making any LTCi decisions. As the wife of a retired LTCi broker, I suppose I'm as good as any non-LTCi professional would be at deciphering a marketing consumer brochure. So here goes...

After reading the Cornerstone Advantage consumer brochure that is in PDF form on Genworth's website, here are my understandings:

The main difference between Long Term Care insurance (LTCi) policies that have been sold in the recent past and the Cornerstone Advantage is that the Advantage only covers 80% of costs. It's like health insurance. Not only will you have the typical "deductible", or elimination period, as it's called in LTCi policies, but you will also have a copay of 20% of your care costs. You can choose a high daily benefit, but Genworth will still only pay 80% of the daily long term care costs. That means, if your home or nursing home care costs are, say, $3000 per month, you will need to come up with $600 per month.

Next difference? The Genworth Cornerstone Advantage doesn't cover rent or room and board costs if you are in an assisted living facility. Now that's a big deal. Room and board can be the most expensive part of assisted living facility's monthly bill, depending upon how much care you need. Clay and I looked into a lovely assisted living facility in Washington state. They wanted $3000 per month for room and board - not including any actual care services like assistance with showering, transferring, eating or toileting. Each service was charged for separately and tacked onto the room and board costs.

I'm assuming that the Cornerstone Advantage LTCi product would cover most, if not all, types of needed services, remembering that Genworth will only pay for 80% of these service costs. However, I cannot be sure about which services are covered without seeing the actual policy wording.

It seems to me, that Cornerstone Advantage inches closer to the old days of "nursing home only" policies, although it does cover Home Care. What part of or what kind of home care is covered I don't know, as the Genworth website did not elaborate on the subject.

The last big difference: From what I read, the Cornerstone Advantage does not seem to provide benefits by the year. Instead, it looks as if you choose how much Genworth will pay out in total. The wording on Genworth's consumer brochure says this: "The whole idea behind Cornerstone Advantage is affordability. You choose the daily benefit you want. You also select the total amount of protection you want in dollars - from $100,000 up to $1 million."

Alrighty then... This means that you'd better plan for the absolute worst scenario. Otherwise, you may end up paying all your long term care costs out-of-pocket when you've used up your "total amount" and your coverage ends. This feature may be a nightmare in the making for those who do not calculate future care expenses correctly. And who can know their future care needs?

The plan includes Care Coordinators, but you don't need to use them. Who knows? One might need care coordinators in order to figure out just what services Cornerstone Advantage covers, when or where they will be covered, and what won't be covered at all.

So, in my opinion, Genworth's new product seems to eliminate some pretty important benefits in order to cut their premium price. Is there anything they are giving you to make up for it? Well, yes.

From what I can gather, Return of Premium is built into the product and is automatic in the event of your death. Again, the wording of the consumer brochure was pretty vague. so check this out with your LTCi broker to make sure. Return of Premium is usually provided as an "add-on" rider that increases premiums, but it looks like Genworth's new product provides it as a "freebie". There are many folks who want to get their premium costs back if they don't use any benefits of their policy. Some folks may not be able to afford to pay for a Return of Premium rider as well as the immensely important inflation protection rider, so this is a nice feature of the Cornerstone Advantage.

Cornerstone Advantage also offers a 35% couple's discount if you and your partner apply for or own Genworth's long term care insurance policies. Apparently, this applies even if one of your applications is declined. Ask your LTCi specialist if the term "partner" applies to your living situation. If you don't already have a expert, specialist-broker, you can get your questions answered by your Long Term Care insurance Buyer's Advocate.

The Shared Benefit looks as if it is available as a rider, and is available to couples who buy identical polices.

Although the Genworth website did not specifically state this, I'm assuming that their inflation protection options are available as a rider, too.

Is Genworth's new LTCi product right for you? That will have to be decided by you and your LTCi broker. If I were considering this Cornerstone Advantage as a choice, I'd keep these points in mind.

1) Will I have enough income or savings to cover the one time deductible AND the monthly copays?

2) Since this product does not pay for assisted living rent or room and board, would I be able to pay for those high monthly bills? Or instead, do I have friends and/or relatives who will be willing to help me stay in my own home, with help of Home Care services?

3) Considering long term care costs are currently rising more than 6% per year, am I willing to take the chance that I will be able to figure out my daily benefit and total amount of protection amounts ahead of time (and just hope I don't need more)?

4) Am I young enough to even apply? It appears that Cornerstone Advantage isn't available to purchase for those 75 years of age or older. Seems most LTCi companies are encouraging folks to get LTCi at younger ages these days.

As with any LTCi policy, make sure that you completely understand all "gatekeepers" that may be in any policy you choose. A gatekeeper is any wording that may affect your benefit pay-outs, such as the number of Activities of Daily Living you need to have assistance with before your policy kicks in. There can be many gatekeepers in LTCi policies.

Of course, only your actual policy contains the exact terms and conditions of coverage, so read it carefully.