Another Major LTC Player Making Sweeping Changes

[ltcadviser]

you obviously haven't read the entire thread. I am not captive, I do show other options. I recommend nothing at the first meeting, all I do is gather information about the person and their situation and what their goals are. I go back and design a plan that meets their needs. When NML is the best option I use it, when it isn't I write another company's policy. How many times do I need to say the same thing???
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So which is acting in the best interest of the client? Me understanding their goals and their current situation and making appropriate recommendations, or me just putting a spreadsheet together of all the options like you do and saying good luck, hope you pick good!

Come on man, if you don't like NML that is one thing, but a spreadsheet with every option is not the way to sell insurance.

My initial long term care planning meeting with my clients is typically 3-4 hours. I do planning. I have nothing against NWML. The plan is only as good as the analytical ability of the advisor. I have no idea how good your analytical ability might be.

 

[ikeman07]

Because you didn't say the same thing. You went a step further and used the "fiduciary" word. Bottom line is anytime a commission is involved you would be hard pressed to ever state you are acting in a fiduciary manner with your clients. Commission = conflict of interest. Res ipsa loquitar.

That is inaccurate, you simply have to explain the conflict. You can still act as a fiduciary. My clients know how I get paid. I inform them of the fees they see, the fees they don't see, and how I am compensated. Both on the insurance and the investment side. I get fairly detailed because I always say as part of my closing language that I never want to have a conversation two years from now and you say "Oh, I didn't realize that's how you get paid." I say it EVERY time.

 

[Norwayguy]

was th JD part supposed to impress me?

I have my 7, 66, CLU, ChFC, & CFP....I think I understand fiduciary responsibility. While I have only been in the business for 7 years, and almost 3 with NML, I have never had a written or verbal complaint. I have only lost two clients in those 7 years. One due to financial troubles and a long unemployment, and one who died.

I believe that my clients are more well informed than most after the time that I spend with them up front and on an ongoing basis. Way more than someone who has an AGENT that just throws all the options on the table and says pick one.

So yes, I feel like all of my clients and files will stand up to any judge's scrutiny anytime.

Is this where I say "the defense rests?" I didn't go to law school, so I am not sure...

This was my point exactly. I have nothing against NWML. I'm glad you have had 7 great years in this business but realize this just because your clients are happy today doesn't mean anything....I know Glenn Neasham is a bad example because I want to talk fiduciary duty but his client was happy with the investment and never complained. But lets say for a minute a clients child gets into the act down the road and you do sell NWML LTC how do you defend yourself that you did what was in the best interest of the client when another policy had the same benefits but a lower premium? Because until all of your comptetitors premium is higher than the product you sold or the benefits on your competitors products are inferior how can you look the judge in the eye and say "Your honor I did what was in the clients best interest". I implore you not to ask your manager about this issue but to speak with an attorney not affiliated with NWML and ask him where you stand...It'll cost you very little and could save your career.

I'm with you on everything else you said.

 

[ikeman07]

The plan is only as good as the analytical ability of the advisor. I have no idea how good your analytical ability might be.

We agree on something!!!

Contrary to what a lot of people on here might think about NML "kool-aide" drinkers, there are quite a few of us that are pretty darn good analytically.

There are great independent advisors and there are crappy ones.
There are great captive agents and there are crappy ones.
There are great NML kool aide drinkers and there are crappy ones.

Too many people on here attack NML people, and lose focus on the products and what is right for the client. NML in my opinion has some of the best lineup of products in the market place. That is what after 2 years of interviewing firms of all types I moved there. I truly think that it offers my clients the best options....and when it doesn't...I WRITE THE BUSINESS WITH THE BEST OPTION (not captive).

 

[ltcadviser]

By the way, speaking of Northwestern Mutual agent tactics, last year I was approached by a gentleman that was overweight, diabetic and a private pilot. He had just bought a Northwestern Mutual 1.5 million dollar term life policy. His premium was $16,000. I asked him if it would be alright if I tried to obtain a better offer for him. The gentleman told the NWML agent I was going to see if I could do better. The agent told the gentleman he had already approached every underwriter and NO ONE would offer a policy to the gentleman without an aviation exclusion except Northwestern. He called this gentleman every week for 5 weeks trying to push this policy on him. Well, with a little negotiating I got his policy approved for $9,000 year. I am not going to say it was easy. However, I will say the NWML agent lied to my client when he said he shopped it around.

Maybe this agent is an anamoly.
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I truly think that it offers my clients the best options....and when it doesn't...I WRITE THE BUSINESS WITH THE BEST OPTION (not captive).

Ahh, so since no one would argue that the Guardian Provider Plus contract is the best disability insurance policy is your General Agent ok with the fact that you write all of your disability income policies through The Guardian?

 

[ikeman07]

This was my point exactly. I have nothing against NWML. I'm glad you have had 7 great years in this business but realize this just because your clients are happy today doesn't mean anything....I know Glenn Neasham is a bad example because I want to talk fiduciary duty but his client was happy with the investment and never complained. But lets say for a minute a clients child gets into the act down the road and you do sell NWML LTC how do you defend yourself that you did what was in the best interest of the client when another policy had the same benefits but a lower premium? Because until all of your comptetitors premium is higher than the product you sold or the benefits on your competitors products are inferior how can you look the judge in the eye and say "Your honor I did what was in the clients best interest". I implore you not to ask your manager about this issue but to speak with an attorney not affiliated with NWML and ask him where you stand...It'll cost you very little and could save your career.

I'm with you on everything else you said.

It goes back to my main focus actually being on cash flow. This might sound odd since NML is higher than some other LTC options out there, but it is stability and the fact that I feel more confident on what the premium will be long term. I believe that LTC is one of the biggest risks that people face in retirement. Many of my clients goals for retirement are over 100k per year in today's dollars. By the time we are in retirement...we are looking at 2 to 5 percent of the annual income needed to protect from the greatest risk with a NML policy and maybe 1 to 4 with some other carriers .I have no problem telling a judge that I opted for the strongest rated insurance company in the industry even though the premium was higher (not the highest).

Why do Muni's pay less than corporates? Why do AAA bonds pay less than junk bonds? Why do...you get the point. I was an investment guy first, and as I began getting my CFP I saw the gap in risk planning that neither I nor anyone else was filling for many of my clients. just like an emergency fund doesn't produce much yield, it is there so the other dollars can be invested properly and do what they are supposed to do without risk of being sold early and potentially in a down market. I view Insurance the same way. I will give up a little extra premium to have a greater amount of safety.

I hope this helps you understand where I am coming from.
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By the way, speaking of Northwestern Mutual agent tactics, last year I was approached by a gentleman that was overweight, diabetic and a private pilot. He had just bought a Northwestern Mutual 1.5 million dollar term life policy. His premium was $16,000. I asked him if it would be alright if I tried to obtain a better offer for him. The gentleman told the NWML agent I was going to see if I could do better. The agent told the gentleman he had already approached every underwriter and NO ONE would offer a policy to the gentleman without an aviation exclusion except Northwestern. He called this gentleman every week for 5 weeks trying to push this policy on him. Well, with a little negotiating I got his policy approved for $9,000 year. I am not going to say it was easy. However, I will say the NWML agent lied to my client when he said he shopped it around.

Maybe this agent is an anamoly.

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I won't make a definative statement here since I don't know the whole story...it could have been a case where a term conversion down the road was discussed...but you are probably correct. The agent probably didn't do his homework.

I had a similar case earlier this year. I had a 21k approval for a 2 mil term policy to fund a buy/sell. I placed it, but after 2 months I was finally able to get Genworth to write it for 11,700 with a letter from his doctor. I replaced the policy and paid back the NML commission.

Maybe I am the anomaly at NML, but I know many other people that I believe would do the same thing. My GA actually helped me with this one. He hooked me up with the shop that was able to get it placed.

Ahh, so since no one would argue that the Guardian Provider Plus contract is the best disability insurance policy is your General Agent ok with the fact that you write all of your disability income policies through The Guardian?

I write plenty of term and DI business outside of NML and I am appointed with Guardian and use them. For people who are rated 5a with NML there is an awesome DI series with an "extended initial period" which is NML's version of the own occ. They also have great medical definitions for doctors and dentists. Not to sound like a broken reccord here...but again the NML dividend history on DI is awesome and it kicks in after two years. NML pays more dividends on DI than the next 8 companies combined.

For people who don't always get those rates with us I have been known to write outside. My GA does get annoyed with me for writing as much business as I do outside, but I write more inside because I believe it is a better fit most of the time so we have come to an agreement. I have written 17 NML DI policies so far this year and 6 outside.
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436,000 policyowners with 689,000 policies – the company expects to pay $255 million in dividends to disability insurance policyowners in 2012.

 

[ltcadviser]

The cynic would state the higher the dividend the more the company grossly overcharged to begin with. Just saying.

 

[moonlightandmargaritas]

I get fairly detailed because I always say as part of my closing language that I never want to have a conversation two years from now and you say "Oh, I didn't realize that's how you get paid." I say it EVERY time.

Nice, but your language doesn't trump the laws of agency in most states.

 

[ikeman07]

The cynic would state the higher the dividend the more the company grossly overcharged to begin with. Just saying.

NML DI rates are already competitive. This just makes it arguably one of the two strongest policies available depending on occupation and after two years, the cheaper of the two.

Again, with LTC it protects from future rate increases if they are overcharging, which leads to the ability to better manage cash flow in retirement which to me is the most important thing I can do if the risk is being managed.

Personally I think if someone buys LTC from either of us, they are probably working with a good advisor...I just prefer it when they work with me
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Nice, but your language doesn't trump the laws of agency in most states.

That one line doesn't...but the full explanation of how I operate that you cut out does.

 

[moonlightandmargaritas]

That one line doesn't...but the full explanation of how I operate that you cut out does.

Please educate us then!

What "full explanation of how you operate" trumps the laws of agency in your state?