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October 1, 2004
Guardian Rolls Out Long Term Care Insurance; Care ProVider Line to Address Growing Market
NEW YORK, N.Y., October 1, 2004 — The Guardian Life Insurance Company of America (Guardian) has entered the Long Term Care Insurance (LTCI) marketplace with the introduction of Care ProVider, a comprehensive policy offered through its wholly-owned stock subsidiary, Berkshire Life Insurance Company of America (Berkshire).
"Business Reducing Term addresses a critical gap in the contingency plans of many business owners," said Matthew Gottfried, ASA, Director of Individual Disability Income at Berkshire Life Insurance Company of America (Berkshire), a wholly owned stock subsidiary of Guardian.
Several years of market research preceded the company's decision to develop its own product to help policy owners cover the growing costs of long-term care, which can include nursing, rehabilitative and therapeutic care, as well as assistance with basic activities of daily living.
"With 76 million baby boomers nearing retirement age, there'll come a time when many of these individuals will need nursing home care or the help of a nursing aide, and the costs of providing this type of care are increasing at a rate that exceeds 5% per year," observed Berkshire's Kenneth E. Murrell, 2nd Vice President, Product Marketing and Research.
"Already, many baby boomers are experiencing the emotional and economic stresses associated with having to juggle their jobs and caring for their aging parents," he added. "As a result of these converging demographic trends, consumer awareness of the need for LTCI is extremely high: More than 70% of Americans claim to know of the problem."
In addition to these positive market forces, Murrell believes Guardian will benefit from entering the market as a "second-generation" LTCI provider.
"Obviously, any new insurance product will have long-term risk associated with it, and the morbidity data on LTCI is just beginning to emerge," he said. "You really need to look at 10, 15 or 20 years of data for a line of business before you can feel comfortable with how the risk emerges. From an industry standpoint, we're just reaching a juncture where we have enough data to make informed product pricing decisions."
Berkshire's Care ProVider policy offers a number of competitive features, including:
 | A choice of reimbursement or indemnity policies, including a Personal Caregiver Rider for informal, non-professional caregivers; |
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| Joint coverage for any two members of the same household with up to a 70% discount on the lower-age policy and a built-in joint waiver of premium retroactive to the first day of claim; |
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| Flexible premium payment options, including 10-Pay and Paid Up at 65; and |
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| Return of premium to a named beneficiary, with the ability to designate a third-party policy owner. |
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(For comprehensive details, see accompanying product specifications.)
Guardian Field Major Decision Drivers; Risk Management Key
Guardian's career agency system played a high-profile role in the development of the company's LTCI offering.
Guardian's field force had been advocating for a proprietary LTCI product for some time in order to compete more effectively with those carriers who do offer it—not only in terms of client market share, but also in order to recruit the best and brightest field representatives," observed Donald R. Campfield, Berkshire's National Sales Director, Long Term Care Insurance.
Berkshire partnered with Guardian's General Agents (GAs), tapping their advice throughout the research and development stages leading up to the product launch. In particular, Guardian's GAs wanted to feel confident about Berkshire's risk-management approach with the new LTCI offering, especially since Guardian is entering the market as a number of "first-generation" insurers are leaving it.
Accordingly, Guardian and Berkshire took a number of steps to support their ongoing risk-management philosophy with an eye toward profitable growth. Chief among these was their decision to use a strategic partner to perform key risk management functions such as product design and pricing, underwriting, new business issue, policy administration, policy owner service and claims administration.
Berkshire's Murrell stressed the importance of the strategic partner's involvement from the product's actuarial inception: "It was critical that we identify a strategic partner with a proven track record in LTCI in order to support rational pricing of our product for the long term."
In addition, in conjunction with the product launch, Berkshire developed a comprehensive producer training and certification program, offered at no cost to the Guardian agent.
"LTCI is a new line of business for the company, and training is critical to ensuring that our field representatives are confident and knowledgeable advisors for their prospects," Berkshire's Campfield noted.
Finally, Guardian GAs nationwide have already signaled their strong commitment to the new LTCI offering by appointing in-agency LTCI Specialists to provide local sales support and service for Care ProVider cases. This replicates the highly successful Disability Income Specialist model forged by Guardian and Berkshire in support of their Individual Disability Income product line.
"The typical Guardian field representative's target market—affluent people 45+ years of age—is highly aware of the impending need for LTCI," concluded Campfield. "It's a product most consumers—including hundreds of thousands of current Guardian clients—are coming to expect
to have incorporated into their financial plan, and we anticipate that many of them will be thrilled to be able to turn to Guardian to do so."
About Guardian
Founded in 1860, The Guardian Life Insurance Company of America, New York, N.Y. (Guardian), is the fourth largest mutual life insurance company in the United States. As of December 31, 2003, Guardian and its subsidiaries had $37.2 billion in assets. With more than 5,000 employees, approximately 3,000 financial representatives and nearly 100 agencies nationwide, Guardian and its subsidiaries protect individuals, businesses and their employees with life, disability, health and dental insurance products, and offer 401(k), financial products and trust services. More information on Guardian can be obtained at www.guardianlife.com.
Care ProVider Long Term Care Insurance Policy Series BG0IP (06/04) et.al. underwritten and issued by Berkshire Life Insurance Company of America, Pittsfield, MA, a wholly owned stock subsidiary of The Guardian Life Insurance Company of America, New York, NY. Products not available in all states. Product provisions and features vary from state to state.
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