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LTC insurance - Genworth now a penny stock!

Laurie

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We purchased a Genworth long-term care policy this past year, and I just heard that Genworth is now a penny stock. What does this mean - did we/ will we lose what we have paid in? Or will we be up for huge increases if/when it is bought by someone else? :eek:
 

Aussiedog

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Laurie -

Don't panic yet. Just because the stock price is down does not mean that their reserves are insufficient to pay future claims. All the insurance company stocks are in the ditch.

Years ago when an LTC company went out of business Commissioner Long (NC) worked with others to find a buyer for the existing policies. IF it comes to that I expect that a similar process will be followed, but Genworth is noted for being one of the better companies out there so hopefully this discussion is academic!

To answer your second question - the one thing that can't be guaranteed with a takeover or sale of existing policies is any promise by the former carrier as to rate increases. As I recall though, Genworth does not lowball their prices and so this should be a minor issue if an issue at all.

Ann
 

Laurie

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Something I was just told, which I don't understand, is that Genworth had a lot of "swaps" with Wachovia - don't know whether that's those CDO's, or what.

Thanks for that further info, Ann - we sure hope there are some real reserves, and not imaginary ones!
 

Bucky

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Don't worry about Genworth. Their problem is with their Mortgage Insurance division and all other insurers that write MI are in trouble also. Once the mortgage problems with the country are resolved so will the MI insurers problems. That doesn't mean that the rest of the company is in trouble. Here's a statement that Genworth made on 9/30 regarding the MI division. "it is looking at strategic alternatives for its U.S. mortgage insurance business, including spinning it off as a stand-alone entity." I personally see a big bounce coming in the stock price as soon as the MI problem is solved. Just my two cents worth.
 

pcgirl54

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We just did the same with AIG for term life insurance.
 
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