Another Major LTC Player Making Sweeping Changes

[ltcadviser]

Wow....I seem to be a little late to the party, but I thought I would throw my two cents in as well. I am somewhat of a newbie at NML, I have only been there for three years, but I do sell a good bit of LTC...and I also typically show a couple of other companies, Genworth included. Most of my clients choose the NML policy. I miss the MetLife policy since I had clients that want to retire overseas, and it had a good payout option outside of the U.S.

The NML policy that is really attractive to a lot of clients is the one where they have the choice to increase benefits every year if they want to and then the premiums increase as well. While I like the level premium option much better,

One thing that definately makes NML competitive over the life of the policy, is our dividend. When I show illustrations I spreadsheet them and show the cumulative premium payment over 30 years. Genworth is almost always the cheapest, NML with the dividends almost always comes in 2nd or 3rd in price on the level premium. And for the first 20 years, the increasing premium policy is typically cheaper or on par with Genworth. It definately gets much more costly by the thirtieth year however.

Welcome to the business. I commend you on doing long term care planning so early in your career.

Couple of quick thoughts. You are the licensed adviser. You like level premium better than GPO. You are actually right. So why do you not only write automatic inflation protection. Do not write a GPO policy for someone under 69. Ever. Ever. Don't make a mistake by designing the wrong benefits that won't help your clients in 35 years. I will refuse to write a GPO policy for someone under 70. No way no how. Is not happening. In the long run GPO is much higher. Just do what you know is right. If NWML is too high, write another company. Sorry, that is the fact.

By the way, I compared rates for a 48 year old Missouri woman today. Genworth, Medamerica, Mass Mutual were at $1800; John Hancock and Northwestern were at $3600. Same benefits.

Bottom line is you are the professional. You tell your clients why they need automatic inflation. Period. Out. If you can't justify the 5% compound premium that is double with NWML, then you better become independent. I would suggest you try to justify the premium that is double because you are a NWML agent. You signed up for it. Just don't give your 45-65 year old clients the rope to hang themselves with GPO. It is negligent.

If you miss the Met Life Premier policy you can still write Medamerica Simplicity. It's the same cash policy that your international clients will buy.
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Oh come on think of them this way. Thier clients already believe in the insurance, now you can show them a better carrier.
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I don't sell much LTC and I'm independent when I present my recommendation I don't tell the client there is hundreds of other policies that can do the same thing for less premium. I say this is what I recommend and why.

Hundreds of policies? Dude, there are like 12 LTC companies left.

 

[CALTCAgent]

Indiana rates.
55 year old husband and wife
NO preferred health discount (just to be fair since NWM doesn't offer one.)
$6,000mb
5% compound
3 year bp.

annual premiums per spouse:

company 1: $1,845
company 2: $1,869
company 3: $2,257
company 4: $2,404
company 5: $2,694
company 6: $3,276

(guess which one is 2sureforyou's company?)

company 2 (a highly rated MUTUAL insurance company) would have to have a 75% premium increase just to match "company 6".

If the couple could get the 15% preferred health discount, then it would take a 106% premium increase in order for Company 2 to have a premium equal to Company 6.

... but i'm sure that 2sureforyou is certain that Company 6 is not overpriced.

(I thought everybody else was "inline with other offerings.")


where's that emoticon, Arthur, I think I need it again.

In addition, It would take way more than 106% increase to equal the amount of total premium they would have paid over the years with the NWM policy.

I don't see that making sense to me. Glad I am independent. The best is give people all the options and let them decide.

 

[Norwayguy]

Welcome to the business. I commend you on doing long term care planning so early in your career.

Couple of quick thoughts. You are the licensed adviser. You like level premium better than GPO. You are actually right. So why do you not only write automatic inflation protection. Do not write a GPO policy for someone under 69. Ever. Ever. Don't make a mistake by designing the wrong benefits that won't help your clients in 35 years. I will refuse to write a GPO policy for someone under 70. No way no how. Is not happening. In the long run GPO is much higher. Just do what you know is right. If NWML is too high, write another company. Sorry, that is the fact.

By the way, I compared rates for a 48 year old Missouri woman today. Genworth, Medamerica, Mass Mutual were at $1800; John Hancock and Northwestern were at $3600. Same benefits.

Bottom line is you are the professional. You tell your clients why they need automatic inflation. Period. Out. If you can't justify the 5% compound premium that is double with NWML, then you better become independent. I would suggest you try to justify the premium that is double because you are a NWML agent. You signed up for it. Just don't give your 45-65 year old clients the rope to hang themselves with GPO. It is negligent.

If you miss the Met Life Premier policy you can still write Medamerica Simplicity. It's the same cash policy that your international clients will buy.
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Hundreds of policies? Dude, there are like 12 LTC companies left.

I said I don't write LTC, I am more a life and annuity guy but the point is the same.

 

[csalter]

I am not an insurance salesman so I may give a different perspective as a plain consumer. I bought a Genworth policy a year ago and since I am still relatively young in LTC terms at 52, I have been keeping my eye on the LTC scene since I may not use until I am 80 something.

I must share with you that there are different reasons in my humble opinion that a consumer like myself would go with Northwest Mutual and that would be for peace of mind. If I were going to spend $100 more a month to go with a AAA that I heard NEVER went up on premium, I would listen with strong consideration even if the policy had a few less benefits depending on what those benefits were that I was losing.

I like my Genworth policy and it does seem to have a very comprehensive plan. However, when you see ratings that have dropped, a CEO that has resigned and the request for increases in your state, it does give one an uneasy feeling.

Now maybe this is not a issue for current policy holders or those who don't read much on LTC. Ignorance can be very blissful. However, when you do know some stuff it can make you think if you made the right decision. When you invest your money in these policies, you want some assurance they will be there when you need them. People who pay these premiums want the piece of mind that whichever policy they select, it will be there when and if they need it is very high on the what clients are looking for.

 

[Norwayguy]

I am not an insurance salesman so I may give a different perspective as a plain consumer. I bought a Genworth policy a year ago and since I am still relatively young in LTC terms at 52, I have been keeping my eye on the LTC scene since I may not use until I am 80 something.

I must share with you that there are different reasons in my humble opinion that a consumer like myself would go with Northwest Mutual and that would be for peace of mind. If I were going to spend $100 more a month to go with a AAA that I heard NEVER went up on premium, I would listen with strong consideration even if the policy had a few less benefits depending on what those benefits were that I was losing.

I like my Genworth policy and it does seem to have a very comprehensive plan. However, when you see ratings that have dropped, a CEO that has resigned and the request for increases in your state, it does give one an uneasy feeling.

Now maybe this is not a issue for current policy holders or those who don't read much on LTC. Ignorance can be very blissful. However, when you do know some stuff it can make you think if you made the right decision. When you invest your money in these policies, you want some assurance they will be there when you need them. People who pay these premiums want the piece of mind that whichever policy they select, it will be there when and if they need it is very high on the what clients are looking for.

I totally understand your view. I have nothing against NWML but as long as the policy is Guaranteed Renewable instead of Non-Cancellable then that policy has the same ability to raise rates that any other LTC policy has.

We as agents instead of B*tching and moaning should be advocating options for our consumers. It would be nice to see a carrier offer a non-can policy and a Guaranteed-Renewable policy and let the consumer choose.

 

[Mr_Ed]

I am not an insurance salesman so I may give a different perspective as a plain consumer. I bought a Genworth policy a year ago and since I am still relatively young in LTC terms at 52, I have been keeping my eye on the LTC scene since I may not use until I am 80 something.

I must share with you that there are different reasons in my humble opinion that a consumer like myself would go with Northwest Mutual and that would be for peace of mind. If I were going to spend $100 more a month to go with a AAA that I heard NEVER went up on premium, I would listen with strong consideration even if the policy had a few less benefits depending on what those benefits were that I was losing.

I like my Genworth policy and it does seem to have a very comprehensive plan. However, when you see ratings that have dropped, a CEO that has resigned and the request for increases in your state, it does give one an uneasy feeling.

Now maybe this is not a issue for current policy holders or those who don't read much on LTC. Ignorance can be very blissful. However, when you do know some stuff it can make you think if you made the right decision. When you invest your money in these policies, you want some assurance they will be there when you need them. People who pay these premiums want the piece of mind that whichever policy they select, it will be there when and if they need it is very high on the what clients are looking for.

would you be willing to pay twice the premium you are paying right now to get comparable benefits from a company that had a AAA rating and had never raised their rates on their LTCi policies?

 

[billberry12]

csalter,

I understand. But, how would you feel if you purchased a policy from a company that had NEVER had a rate increase, and was a leader in the business, etc..., then after you had owned it several years, this company had a substantial rate increase several times within a couple of years? It happened.

What if you bought a policy from a company that had similar criteria, had a ten year rate guarantee, was a leader in the business, and committed to the LTCI industry, then abruptly stopped selling LTCI altogether. It happened.

These are only a couple of things that have happened in my career selling LTCI.

My point is simply this. No matter what any company representative tells you, promises you, or whatever their rep says so convinceingly that it has to be true...all kinds of things can happen that the agent never dreamed would happen. Then, what the agent told you doesn't mean anything.

The company will always do what is best for the company, within the parameters of the contract. By the way, the contract is written by the company to cover the company, not the other way around.

But....why anyone would pay 30% -50% more for one policy over any other for the same benefits based on promises of future dividends and no rates increases, neither of which are guaranteed, is beyond my comprehension.

 

[ltcadviser]

I am not an insurance salesman so I may give a different perspective as a plain consumer. I bought a Genworth policy a year ago and since I am still relatively young in LTC terms at 52, I have been keeping my eye on the LTC scene since I may not use until I am 80 something.

I must share with you that there are different reasons in my humble opinion that a consumer like myself would go with Northwest Mutual and that would be for peace of mind. If I were going to spend $100 more a month to go with a AAA that I heard NEVER went up on premium, I would listen with strong consideration even if the policy had a few less benefits depending on what those benefits were that I was losing.

I like my Genworth policy and it does seem to have a very comprehensive plan. However, when you see ratings that have dropped, a CEO that has resigned and the request for increases in your state, it does give one an uneasy feeling.

Now maybe this is not a issue for current policy holders or those who don't read much on LTC. Ignorance can be very blissful. However, when you do know some stuff it can make you think if you made the right decision. When you invest your money in these policies, you want some assurance they will be there when you need them. People who pay these premiums want the piece of mind that whichever policy they select, it will be there when and if they need it is very high on the what clients are looking for.

Companies are exiting the long term care insurance arena for one reason and one reason only. Companies have no confidence their requests for rate increases will be approved in the future. It is not about the "people are living longer" spin. You did the wise thing by doing a 10 Pay with Genworth. The ex-CEO will not be there when you make your claim, but your company will be there for you when you need it. The California insurance reserve requirements will see to that.

 

[Chuckles21]

The company will always do what is best for the company, within the parameters of the contract. By the way, the contract is written by the company to cover the company, not the other way around.

But....why anyone would pay 30% -50% more for one policy over any other for the same benefits based on promises of future dividends and no rates increases, neither of which are guaranteed, is beyond my comprehension.

What bill doesn't understand, and never will, is how much peace of mind means to a consumer. He is entirely correct in saying that there is nothing guaranteeing NWM couldn't raise rates in the future or not pay the dividends that are illustrated. On the other hand there is nothing guaranteeing all these other companies won't pull what we have seen recently and raise rates drastically or just plain pull out of the market.

So what can we really go off of when a consumer makes a very important decision? It really comes down to what company he thinks he can trust more. NWM is the only company to do both of those things you point out in not raising rates & paying dividends. No other LTC company has made good on both of those points. For most younger individuals getting into the market this is a product that they will not be using for 25-30 years. That is a long time for a lot of things to happen to ones policy especially given what the last few years have been like. In today's environment where people have lost a lot of faith in a lot of things/companies in the financial sector there are a lot that will pay more for a perceived better promise.
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In addition, It would take way more than 106% increase to equal the amount of total premium they would have paid over the years with the NWM policy.

I don't see that making sense to me. Glad I am independent. The best is give people all the options and let them decide.

In short No, factor in NWM's dividend and this is not true one bit. Also if a company raises rates 15% one time and then 5 years later raises them again by another 15% in your mind they have raised rates 30%. The truth is that every time there is an increase it compounds on itself.

 

[Crabcake Johnny]

The question for agents currently selling LTC is this; do you still have faith that when you sell a policy to that 55 year old, that it'll still be there for him at affordable premiums when he's 70.