Another Major LTC Player Making Sweeping Changes

[Chuckles21]

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.

Can you tell me how much in dividends MM paid out towards their LTC last year? As far as I know it was $0 although i would be up to be proven wrong. There is a big difference between being eligible to receive them and actually getting them.
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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.

Don't take it to personally. Myself and two other agents essentially called him out in the other ongoing thread and he seems to have taken it personally... although we are still waiting for a response.

 

[ltcadviser]

You tell me that I am not designing the plan for my clients...so you are calling my unethical basically

I wasn't calling you unethical. I was calling you a semi-captive agent. Which you are. And I was once a semi-captive agent , too. So I know what it is like to lead with a Company. You can't see the forest for the trees when you are part of The Company. You will generally always sell your Company's policy unless Company underwriting throws you a curveball. Sorry, that is just the way it is. Anyway, I really don't care what policy you write.

What I feel strongly about is doing the plan design right.

Most everyone on this board knows how strongly I feel about automatic inflation protection for long term care insurance policies. Especially for clients in their forties, fifties, and sixties.

Most of the hatchet jobs I have seen in long term care insurance plan design tends to revolve around the failure of agents---indpendent agents and captive agents alike--to fully comprehend the value of automatic compounded benefits, specifically at 5% compound.

My point to you is simply that if your client is telling you they can not afford Quiet Care's 5% compound inflation factor today they are not telling you that they can not afford 5% compound inflation protection. I feel you really owe it to your client to see if you can get them the 5% compound inflation factor with another company that has a premium they CAN afford.

Don't fall into the trap of believing the client will convert in 4 years. Funny things happen along the way. The timing is never right for everyone.

You don't wish to have a review in 15 years and find out the $6000/month benefit you wrote will not cover the $15000/month cost of a facility. With the increasing costs of long term care it is terribly hard to catch up if you don't start early and do it right the first time.

I don't know how long you have been doing long term care planning, but I would imagine producers that have been doing this for 15 years like Arthur, Scott and Bill would agree that the moving target is hard to catch up with if you don't do it right the first time.

Now, I realize that Arthur is always stating to me that I have a "high end clientele" that can afford 5% compound inflation protection. Well, maybe I do; and maybe I don't. I would imagine my clients actually look a lot like everyone else's clients considering I receive over over 50 calls per week from people that live all over the country. It is not as if my telephone has a filter that says "only high end clientele may get through."

My advice to you is to lead with the plan design first, not the premium. Try to write the correct plan design with Northwestern Mutual. If your client can't afford the plan design today with Northwestern Mutual, get them the right plan design with another insurance company, if you can.

Don't compromise the plan design because you feel strongly your client should only be with Northwestern Mutual at all costs.

Just my 2 cents.

Like I said, I don't care that you will write a policy for $6000 premium a year, when the same policy benefits will cost $3000/premium down the street for the same benefits. I can write the policy for $3000; you can write the policy for $6000; but at least we are giving our clients the same proper benefits.

Benefits count.

But if you delay on giving your clients the right benefits today in the hope that your client may convert a purchase option plan to an automatic inflation protection plan when the stars align in the future then yes, you can pick any number of descriptions for that advice. Like they say, "if the shoe fits"

You can always reach me at 800-891-5824 to discuss.
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Don't take it to personally. Myself and two other agents essentially called him out in the other ongoing thread and he seems to have taken it personally... although we are still waiting for a response.[/quote]


I have no idea what you are talking about. Kindly point me to the thread, and your comment and I will gladly respond.

Or you may call me direct toll free at 800-891-5824.

 

[Chuckles21]

I have no idea what you are talking about. Kindly point me to the thread, and your comment and I will gladly respond.

No you won't. You know exactly what I am talking about as you did respond... with absolutely no backing to what we called you out about. How about you actually respond to the post.

Also I am still waiting for your answer on MM's dividend for LTC since you touted that one in your previous post. Back it up or don't use it as an argument.

P.S. I do want to give you kudos on your stance with 5% compounding. I am in complete agreement with you here.

 

[ltcadviser]

No you won't. You know exactly what I am talking about as you did respond... with absolutely no backing to what we called you out about. How about you actually respond to the post.

quote]


No, I did not know what you are talking about. I just searched for the post and repsonded. Prior to 15 minutes ago I had no earthly idea what you were talking about. I have been processing 7 LTC applications today, and it is 9:30 PM Friday night and I am still in my office. I would like to go home eventually. Please don't assume I have time to log into a website to see if there is a post I need to respond to. I don't. Last year I think 4-5 months went by before I realized CALTC had asked me about something. Steve can confirm this.
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Also I am still waiting for your answer on MM's dividend for LTC since you touted that one in your previous post. Back it up or don't use it as an argument.

MM may pay a dividend after a policy has been in-force for at least 10 years. I would not rely upon a dividend from MM; nor hang my hat upon the fact it may pay a dividend. Personally, the fact MM doesnt do in-house underwriting has also always been a concern of mine.
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P.S. I do want to give you kudos on your stance with 5% compounding. I am in complete agreement with you here.

Then I will give you kudos, as well. Keep spreading the word to other agents.

 

[csalter]

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.

I guess the process that you use if fine. But again I cannot express the importance of how a consumer is so reliant on the agent who sits before them.

If I were to have someone try to sell me LTC I would first want them to tell me about LTC. What is it? Why I really need it? Its advantages, etc. etc. etc. Secondly, I would want for you to analyze my needs and then create a plan that would best suit my needs. Then and only then would I want us to discuss the various prices for plans that are to meet my needs. I would then be able to compare prices knowing what I am going to get for the money. I would not wish you determining for me what choices are out there.

I would view what you are doing as similar to what car salesman do when they ask you how much of a payment can you afford. They are not looking after the consumer's best interest, but the company's. They can give you a payment that has a higher interest rate or a longer term of payment. I want to know upfront what the cost of the car is first. Then I will determine how I can pay for it or if I want to use your payment source but I would have time to compare.
My point is that I would want my needs to be determined first then costs.

Just my thought on this.

 

[CALTCAgent]

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.

Can you tell me how much NML has paid in dividends on LTC policies? (I am simply curious)

 

[ikeman07]

Can you tell me how much NML has paid in dividends on LTC policies? (I am simply curious)

This is from the NML fact sheet for this year on Long Term Care:

129,000 policyowners with 138,000 policies with Northwestern Long Term Care Insurance Company – it expects to pay $13 million in dividends to policyowners in 2012.

 

[ltcadviser]

This is from the NML fact sheet for this year on Long Term Care:

129,000 policyowners with 138,000 policies with Northwestern Long Term Care Insurance Company – it expects to pay $13 million in dividends to policyowners in 2012.

Sounds like 100 bucks per policyholder.

 

[ikeman07]

I would view what you are doing as similar to what car salesman do when they ask you how much of a payment can you afford. They are not looking after the consumer's best interest, but the company's. They can give you a payment that has a higher interest rate or a longer term of payment. I want to know upfront what the cost of the car is first. Then I will determine how I can pay for it or if I want to use your payment source but I would have time to compare.
My point is that I would want my needs to be determined first then costs.

Just my thought on this.

I come at this maybe from a different point of view. I was a stock broker first, then I got my investment advisors license and over time my CFP. When I decided to move to NML (2 year decision) I came in approaching insurance as a piece of the overall financial plan. I look at DI and LTC as the backstop that allows me to invest my client's money with a properly funded emergency fund and know that we shouldn't need to liquidate investments more rapidly than the plan we create calls for. I value good products from stable companies. I love the dividend history of NML because it allows me to have the higher premium payments in the beginning of the plan during the working years, and lower payments during retirement.

Even though the premium may be more, I feel more comfortable that NML of all companies has the lowest chance of having a rate increase in the future. Dividends would be cut first and new series would come out with higher premiums. Could it happen, sure, but I am fine paying more for lower risk. Of course that is my opinion.

To me I don't focus as much on rates of return or on premium amount as much as I focus on cash flow. I want my clients to get from point A to point B with the least amount risk and the highest probability of succes in having the cash flow they desire when the desire it. To me NML provides lower risk. Maybe they are overcharging, may they aren't. Either way, I can budget it in long term with more confidence on cash flow.
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Sounds like 100 bucks per policyholder.Doesn't exactly make me get too excited.

NML has only been selling LTC for about 13 years and dividends don't kick in until year 5. Plus some policies are under 1000 bucks a year...pretty good if you ask me...
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Don't fall into the trap of believing the client will convert in 4 years. Funny things happen along the way. The timing is never right for everyone.

You don't wish to have a review in 15 years and find out the $6000/month benefit you wrote will not cover the $15000/month cost of a facility. With the increasing costs of long term care it is terribly hard to catch up if you don't start early and do it right the first time.

I don't know how long you have been doing long term care planning, but I would imagine producers that have been doing this for 15 years like Arthur, Scott and Bill would agree that the moving target is hard to catch up with if you don't do it right the first time.

Maybe I am different, maybe not, but i am very detailed in my cash flow planning. I show debt pay down projections, and what should be funded now, but I also show them what they should be expecting to pay for everything 3 years later, etc.. I have clients that know when we get together for annual reviews that it is time to convert life insurance, or with DI I have used the same strategy of converting increasing premiums to level premiums at reviews when debt has been paid down.

I don't go in and sling insurance and say see ya later. I am a planner, and I put together long term strategies for people that include everything from debt reduction, emergency fund savings, education and retirement planning, and insurance planning.

 

[Chuckles21]

MM may pay a dividend after a policy has been in-force for at least 10 years. I would not rely upon a dividend from MM; nor hang my hat upon the fact it may pay a dividend. Personally, the fact MM doesnt do in-house underwriting has also always been a concern of mine.

I know they can pay one after 10 years or age 65, my point is that you said you could write a company that pays dividends. They do not and I will reiterate once again that there is a huge difference between being eligible to receive one and actually getting one.

I've stated this before and was called a hypocrite and I'm really not sure why as it is the truth from everything i know. The fact is NWM is the only company selling LTC to both not have a rate increase and have a history of LTC dividend payment. That is a pretty strong sentence in today's market.

I respect what you are doing with your clients and feel you are doing good planning from what I can gather.
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I come at this maybe from a different point of view. I was a stock broker first, then I got my investment advisors license and over time my CFP. When I decided to move to NML (2 year decision) I came in approaching insurance as a piece of the overall financial plan. I look at DI and LTC as the backstop that allows me to invest my client's money with a properly funded emergency fund and know that we shouldn't need to liquidate investments more rapidly than the plan we create calls for. I value good products from stable companies. I love the dividend history of NML because it allows me to have the higher premium payments in the beginning of the plan during the working years, and lower payments during retirement.

Even though the premium may be more, I feel more comfortable that NML of all companies has the lowest chance of having a rate increase in the future. Dividends would be cut first and new series would come out with higher premiums. Could it happen, sure, but I am fine paying more for lower risk. Of course that is my opinion.

To me I don't focus as much on rates of return or on premium amount as much as I focus on cash flow. I want my clients to get from point A to point B with the least amount risk and the highest probability of succes in having the cash flow they desire when the desire it. To me NML provides lower risk. Maybe they are overcharging, may they aren't. Either way, I can budget it in long term with more confidence on cash flow.

I pretty much mirror this perspective and so do the majority of my clients. I agree NML is higher priced and possibly overpriced, but they aren't doing it in order to screw the client. They are doing it so that the client hopefully doesn't have to worry in the future about any rate increases and that they can make good on all their promises. Consumers in general will pay more for something if they know that extra money is going to their good. NML being a mutual company is not skimming premiums to bolster their quarterly earnings and pass along these profits to stock holders. They are easily the most conservative in the industry and use those extra dollars to make sure they have enough to do what they promised. Then when they feel they have enough to do this they pay back to policyholder in the form of a dividend.

ikeman07, I said it in a previous post, same as you. People don't mind paying more in their working years with the very real probability of that bill going down in retirement when keeping expenses in check is key. With a lot of the other companies they see the opposite scenario happening. They buy peace of mind, not cheapest premium.