The Genworth Scare: What to do When Your Life Insurance Company Suspends Sales

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The insurance world was shocked when Genworth Financial, one of the top long-term care insurance companies, announced it would suspend all new sales of traditional life insurance and fixed annuities products in an effort to reverse financial losses, save the company $50 million in annual expenses, and focus solely on selling long-term care insurance.

While this move may make financial sense for the company, how does such an extreme decision affect you? It’s jarring to see a company entirely close its doors to the life insurance business. While I don’t claim to be a corporate finance expert, here is what I have ascertained from the decision and what this means:

Brokers Won’t Abandon Ship

Brokers should feel confident they’ll get paid any and all commissions due to them. If the sales force of a company felt they wouldn’t get paid, they would abandon ship and the ship would sink very quickly. In the early 1990s, many brokers and agents abandoned Mutual Benefit when it started having trouble and, as a result, its demise was greatly accelerated.

It’s Business As Usual

I am confident that both brokers and policyholders will receive customer service as usual. Premium payments processing, beneficiary changes, policy status, and in-force reporting should all run smoothly, guaranteed benefits shouldn’t be affected, and cash values will still be guaranteed. When Mutual Benefit went under, other companies stepped in to pick up their obligations. The Genworth situation does not appear to be nearly as drastic, so there is no reason for people with policies that guarantee the death benefit and cash value to be concerned at this point.

Concerns Regarding Non-Guaranteed Values

Concerns could potentially be raised about the non-guaranteed values in the life insurance contracts. Will the dividends in whole life insurance be reduced? Will the scheduled interest rates in universal life be lowered? How high will the premiums increase when the guarantee periods of term policies expire? I think it is perfectly reasonable for people who may be facing problems in these areas to shop out their coverage now. It’s better to head off any complications at the pass.

Finding Comfort with Your Carrier

A major change like this will no doubt cause concern regarding guarantees and policies. Nonetheless, don’t immediately switch out of fear and end up paying more or receiving a lower benefit for your dollar. However, it’s worth researching your options and considering switching to a carrier that can offer a similar policy at a similar price.

While many companies before Genworth have needed to re-establish their position in the life insurance market, Genworth seems to be taking a different route. Rather than try to strengthen their position, they are backing out of the life insurance business altogether.

As time goes on, I hope to learn more about the impact of this sales suspension and how to anticipate potential problems. However, as there is no crystal ball in the world of finance and insurance, we’ll need to use our brains and follow our gut.

If you have questions about the Genworth change or would like a second opinion on a quote you have received, please call me (866) 633-1818 or send me an email at I also encourage you to download my free Life Insurance Guide, which you can see in the above tab.


About Steve

Steven Kobrin is a life insurance expert with 25 years experience. He serves high-net-worth individuals and business owners as well as high risk and uninsurable “impaired cases.” Steven offers concierge life insurance process to ensure the policy is approved as it’s quoted. To learn more, visit his website, read his blog, connect with him on LinkedIn, or request a policy audit today by calling his office at (866) 633-1818 or by email at


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