Another Major LTC Player Making Sweeping Changes

[Arthur Rudnick]

originally posted by Yankee466

You could make the argument that even Penn Treaty is still paying their claims (albeit through the state of PA). Does anyone think that Genworth is about to become the next Penn Treaty?

Conseco filed for bankruptcy in 2002. At the time it was the second largest bankruptcy in the country, after Enron.

While in bankruptcy, I had 5 Conseco LTC policyholder on claim. Not one missed a claim check. Not one, was a day late in receiving their check.

Their reserve funds were protected and by law and could not be used for anything other than paying claims.
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originally posted by Chuckles21

If taking the $3276 quote that has been used many times in this discussion. Dividends are projected to start in year 5 and keep increasing until they lower the premium to $2244 and then stay level there.

Assuming that they never have a future rate increase on existing policyholders, which is very unlikely.

 

[csalter]

originally posted by Yankee466



Conseco filed for bankruptcy in 2002. At the time it was the second largest bankruptcy in the country, after Enron.

While in bankruptcy, I had 5 Conseco LTC policyholder on claim. Not one missed a claim check. Not one, was a day late in receiving their check.

Their reserve funds were protected and by law and could not be used for anything other than paying claims.


So Art, what happens to the policyholders during a bankruptcy? Are their policies sold to another company? Are they still in force for reserve use or are they policyholders just out of luck and have to start over with another company at an older age and pay higher amounts?

 

[Arthur Rudnick]

So Art, what happens to the policyholders during a bankruptcy? Are their policies sold to another company? Are they still in force for reserve use or are they policyholders just out of luck and have to start over with another company
at an older age and pay higher amounts?

Policies are still in effect. Conseco left the LTC market in 2003 and have not sold any new policies. Policyholders pay their premiums and if they go on claim, claims are paid according to their original contract.

No difference than Travelers, CNA, Unum and a number of other carriers that left the market.

In the market or out of the market, "A contract is a contract".
And, that's what insurance is all about.

 

[CALTCAgent]

If taking the $3276 quote that has been used many times in this discussion. Dividends are projected to start in year 5 and keep increasing until they lower the premium to $2244 and then stay level there.

Thanks for that info!

What percentage & time frame after the 5 years do they take to get to the $2244?

What is NWM currently paying to LTC policyholders in dividends?

 

[2insureyou]

Assuming that they never have a future rate increase on existing policyholders, which is very unlikely.

Very unlikely, ay? I'm glad you have an inside track on the inner workings of a company you don't even have access to... The dividend would have to completely disappear before a true rate increase, and with their current projections on dividends, it would seem reasonable to assume those aren't going away completely anytime soon, which also lends to the idea that the true premium won't be going up anytime soon, either.

Future rate increases would also occur first on new business before happening to existing business. The VP in charge of distribution has said that, and he is an actuary by training. Obviously, that's not an iron-clad contract that I just typed out, but with his actuarial background, I'd like to think he has some idea of what's happening there.

And, to be fair, he has warned all of us that we are not immune to what's happening in the marketplace.Low interest rates affect us as well. Also, other companies dropping certain policy designs can lead to adverse selection for us, which may force us to make changes as well. (i.e. lifetime benefits) As if we are one of only a couple of games in town offering certain designs, more people will seek us out that otherwise might not.

So, it's not like he's pumping straight kool-aid at us or anything.

 

[Arthur Rudnick]

Originally posted by 2Insureyou

Assuming that they never have a future rate increase on existing policyholders,

which is very unlikely​

.​

Very unlikely, ay? I'm glad you have an inside track on the inner workings of a company you don't even have access to... The dividend would have to completely disappear before a true rate increase, and with their current projections on dividends, it would seem reasonable to assume those aren't going away completely anytime soon, which also lends to the idea that the true premium won't be going up anytime soon, either. And, to be fair, he has warned all of us that we are not immune to what's happening in the marketplace
[/quote]

Nope, never said that I had an inside track on anything to do with NWM or any other carriers.

But history (and common sense) in the LTC marketplace leads me to believe that rate increases can happen to any company at anytime.

And, your last sentence seems to contradict your previous statements.

Let's leave it at this:
You don't know anything definitive about future rate increases on NWM or any other carrier and neither to I...........

 

[2insureyou]

Originally posted by 2Insureyou

.​

Very unlikely, ay? I'm glad you have an inside track on the inner workings of a company you don't even have access to... The dividend would have to completely disappear before a true rate increase, and with their current projections on dividends, it would seem reasonable to assume those aren't going away completely anytime soon, which also lends to the idea that the true premium won't be going up anytime soon, either. And, to be fair, he has warned all of us that we are not immune to what's happening in the marketplace

Nope, never said that I had an inside track on anything to do with NWM or any other carriers.

But history (and common sense) in the LTC marketplace leads me to believe that rate increases can happen to any company at anytime.

And, your last sentence seems to contradict your previous statements.

Let's leave it at this:
You don't know anything definitive about future rate increases on NWM or any other carrier and neither to I...........[/quote]

By saying we are not immune only means that we are not unaffected. That does not mean I believe inforce rate increases are looming at anytime.

What it does mean is possibly eventually eliminating things like lifetime benefits or limited-pay, or coming out with a new series that has higher premiums.

It does not mean I think there will be inforce rate increases. So, it is not contradictory.

 

[ltcadviser]

I have some clients that have short term constraints on their cashflow, example: 4 years before house is paid off. I can place them on an increasing premium for those years and then convert it to a level premium plan without any underwriting. I left an investment shop and came to NML after getting my CFP because of the product lineup there that could benefit my clients. I don't like blanket statements like "Ever, Ever" I design the products and the plan to meet the needs of the client every time.




Why would I go independent? I have written about 25k of premium outside of NML so far this year when I needed a product feature that NML didn't offer, or NML was simply too much cash outlay for the client. I feel that many of the time those products were not as good, but when the reality of cashflow is an issue I get the best I can for a client at the price they can afford. If I go independent, I would be able to offer everything I do now...just not NML. Seems a little silly to me.

What's silly to me is you just admitted you don't design the plan around the needs of your client but around the pricing of Northwestern that directly determines the choices of your clients. You could provide automatic inflation for the same price as GPO with NWML, but you hang them with GPO, and by the time they convert (Which they may never do) their ongoing level premium will be sky effin high. Nice one.

Oh, and what you do not comprehend is that being independent is not a title; it is a mindset. I can write policy with a AAA rated mutual company that has never raised rates, and also pays a dividend. It is called Mass Mutual. I also have relationships with NY Life agents and can refer business out to NY Life when the client will benefit. I could refer business out to State Farm and NWML too if I ever see the value. That is what being independent is all about. A captive agent like you, however, "leads" with one company all the time for everything: term life , DI, LTC, variable annuities; mutual funds. You are a house jockey.

 

[csalter]

Now ltcadvisor, be nice. I don't know what a house jockey is, but it doesn't sound nice.

Could you please tell me what GPO stands for please.

 

[ikeman07]

What's silly to me is you just admitted you don't design the plan around the needs of your client but around the pricing of Northwestern that directly determines the choices of your clients. You could provide automatic inflation for the same price as GPO with NWML, but you hang them with GPO, and by the time they convert (Which they may never do) their ongoing level premium will be sky effin high. Nice one.

Oh, and what you do not comprehend is that being independent is not a title; it is a mindset. I can write policy with a AAA rated mutual company that has never raised rates, and also pays a dividend. It is called Mass Mutual. I also have relationships with NY Life agents and can refer business out to NY Life when the client will benefit. I could refer business out to State Farm and NWML too if I ever see the value. That is what being independent is all about. A captive agent like you, however, "leads" with one company all the time for everything: term life , DI, LTC, variable annuities; mutual funds. You are a house jockey.

This will be the last time I respond to you if all you want to do is throw out insults and bring nothing constructive to the conversation. ( I feel like your initial response will probably qualify, please prove me wrong).

You tell me that I am not designing the plan for my clients...so you are calling my unethical basically. I have said on here, that:

1. When cash flow allows I write NML level premium policies.
2. When cash flow will allow in the near future, I write an increasing premium policy with the intent to convert to level premium down the road.
3. When cash flow doesn't allow, I look for what I believe to be the next best option outside of NML and write a level premium. Thus the reason I have written roughly 25k outside of NML this year and 53k inside NML between all lines of coverage.


As far as your "independent" mindset, I too just got a quote for Mass to show on Monday because there was a feature that we don't have that I thought the client might like. I hit NML minimums in my first 4 months this year, I am not worried about always selling NML, I just think that the company takes a lot of risk out of the future with their financial stability, dividends, and products and I use them the majority of the time.

Why can't someone like me have an independent mindset and also offer NML??? As an ADVISOR I always lead with what I believe is in the client's best interest.