2015 Long Term Care Insurance Survey

[Mr_Ed]

I am amazed when I hear people taking 2 or 3 applications though. I am too lazy for that.

I wished there was an easier way to fill out 2 or 3 app's and maybe I would do it.

please don't do it.

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$100,000 for $250,000 of risk? Not my clients. I generally write asset based policies with Unlimited pool of money risk.

Anyway, my point was that I consider myself a good agent with proper knowledge of UW guidelines, prequalification procedures, etc. and declines are nevertheless inevitable with LTCi even doing business correctly. Medical records often reveals adverse health history not disclosed or discussed with the agent.

even in those cases they are self-insuring for at least the first 25 months, probably the first 50 months.

 

[ltcadviser]

please don't do it.

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even in those cases they are self-insuring for at least the first 25 months, probably the first 50 months.

25 months, but what is your point Scott? Clients that pay increasing premiums and rate increases for 30 years are self insuring too when you add up the cumulative premium outlay.

The client is approved for the plan the client wants and the placement rate is most likely higher than 60% which is the main objective....placing business and securing benefits for our clients.

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I am amazed when I hear people taking 2 or 3 applications though. I am too lazy for that.

I wished there was an easier way to fill out 2 or 3 app's and maybe I would do it.

It takes 20 minutes to complete one application; 40 minutes to complete 2 applications. Really not time consuming when you think of it. When you have an impaired risk case that is a borderline approval possibility, why not. When you have a healthy client I just don't think it is necessary though.

 

[Mr_Ed]

25 months, but what is your point Scott? Clients that pay increasing premiums and rate increases for 30 years are self insuring too when you add up the cumulative premium outlay.

#1) I've had clients who have gone on claim within the first few years of buying a policy. If they'd done a "single pay" policy they would have ended up paying for the first 2+ years themselves.

#2) "cumulative premium outlay".... you gotta be kidding me. What about the time value of money. When you calculate the time value of money they end up paying twice as much with a single pay policy than someone who pays annual premiums.

 

[ltcadviser]

#1) I've had clients who have gone on claim within the first few years of buying a policy. If they'd done a "single pay" policy they would have ended up paying for the first 2+ years themselves.

#2) "cumulative premium outlay".... you gotta be kidding me. What about the time value of money. When you calculate the time value of money they end up paying twice as much with a single pay policy than someone who pays annual premiums.

I've had clients die after buying ltc policies without ever using benefits and during a time period when the market declined and interest rates were 0. And your point?

Let's not turn this into traditional LTC good, asset based ltc bad discussion.

I simply made observation that my asset based underwriters are approving a higher percentage of my applications recently.

 

[Arthur Rudnick]

originally posted by ltcadviser

I simply made observation that my asset based underwriters are approving a higher percentage of my applications recently.

Any thoughts as to why that is Jack, considering there's underwriting for both mortality & morbidity?

Are they generally a healthier class of applicants than those who purchase a stand-alone LTC policy?

 

[scagnt83]

Any thoughts as to why that is Jack, considering there's underwriting for both mortality & morbidity?

Are they generally a healthier class of applicants than those who purchase a stand-alone LTC policy?

Imo it is exactly for the reason that Ed stated, "time value of money".

When a carrier gets a lump sum of $100k on day one, they make a lot more off of that client vs. a client who gives them $100k over a 25 year period. That increased profit margin allows them to take on increased risk on the claims side.

So from a monetary standpoint it probably evens out for the carrier; lower claims and lower profit from traditional policies, higher claims and higher profit from the hybrid policies.

And many people with a low morbidity still have a decent mortality. But most people with a low mortality do not have a decent morbidity.

 

[Mr_Ed]

Imo it is exactly for the reason that Ed stated, "time value of money".

When a carrier gets a lump sum of $100k on day one, they make a lot more off of that client vs. a client who gives them $100k over a 25 year period. That increased profit margin allows them to take on increased risk on the claims side.

So from a monetary standpoint it probably evens out for the carrier; lower claims and lower profit from traditional policies, higher claims and higher profit from the hybrid policies.

And many people with a low morbidity still have a decent mortality. But most people with a low mortality do not have a decent morbidity.

Bingo SC!

Arthur, it's called "Net Amount at Risk".

 

[CALTCAgent]

Anybody have a Time Value of Money example that illustrates the difference between the single premium hybrid versus traditional LTC ?

I should know this with a degree in finance, but that was many years ago.

 

[ltcadviser]

originally posted by ltcadviser



Any thoughts as to why that is Jack, considering there's underwriting for both mortality & morbidity?

Are they generally a healthier class of applicants than those who purchase a stand-alone LTC policy?

Specifically, I will state that some Asset Based underwriters not named Genworth (Lincoln, Pacific Life; and on occasion State Life) still offer underwriting with only an extensive telephone interview. If you recall, we used to have applications approved with just telephone interviews with traditional LTC underwriters too depending upon age and health of the applicant. It is the disappearance of the streamlined process that is driving up the declines on the traditional side. For this reason, I also stay away from Genworth TLC on the asset-based side. Clients portray their own health in conversation much better than what their medical records will tell an underwriter.

 

[wc2624]

“Nonetheless, there are hopeful signs for stand-alone LTCI. A major insurer that has been relatively inactive in LTCI the past couple of years is aggressively marketing an innovative new product. Another insurer will enter the market later this year with lifetime benefit period, a single premium alternative and term life insurance riders.”

Any idea what the reference to the "innovative" new product is and/or who the insurer who'll provide lifetime benefits, single premium and term life riders might be?