Another Major LTC Player Making Sweeping Changes

[Chuckles21]

How much should I factor in for the Kool aid, I mean, dividends? ​

(Slaps Knee) Good one CALTCAgent, you got me there. I mean why would i believe in something that started getting paid out in 2007 and has continued to be through arguably the toughest financial stretch since the great depression. By a company who has paid DI dividends every single year since 1971 and in 2011 totaled over $233,000,000 (10 times higher than closest competitor paying out DI dividends). DI being the closest thing to a similarly underwritten product. From a company that has paid a life dividend every single year since 1871 and paid out more in one year (2011 roughly $4.85 billion) for life dividends than the 3 closest competitors combined. I know those other dividends mean nothing to LTC but you cannot ignore a companies overall perception of dividends and how important they are for the company. P.S. All those billions of dividends just so happen to be non-guaranteed as well. Hard to believe something that isn't guaranteed keeps getting paid out isn't it.

I mean why would i believe in a company with that track record over one that has had recent price increases on a product due to errors in pricing and assumptions and now says to trust them, they corrected those mistakes and it won't happen again. We know we are so much less expensive than those guys over there but they just don't get it... we do.

Like i said it is all about perceived value, not just in the premium but in the company that premium goes to.

 

[VolAgent]

If you guys really can't understand why some prospects would go with NWM over Genworth, even being fully aware of the cost difference, you don't understand people.

I'm not saying this to defend NWM as I really don't care for the company, but I get why some prospects would go that way. Same reason some people buy NYL. The name and the ratings mean a lot to them.

 

[csalter]

I will tell you that as a regular guy, I don't want to pay extra money for anything if it's the same product. However, a lot depends on my financial situation. When I wasn't making much money, but I needed insurance for my car or home, I really just searched for the cheapest insurance that gave me the same coverage. I did not care too much about with home it was with at that time. However, I am a little more selective now. I understand the differences too between buying insurance for my home insurance with State Farm and then with some of these other insurance companies. What I have learned is two things. First, one has to READ and UNDERSTAND the policies. For example, State Farm costs more but it covers more in a variety of situations. However, AAA only covers you if specific perils. That is huge, but the average person does not read that or understand that. The average person, has no clue. I know I did not. You usually don't know what you have and what you don't have until something happens. That is the average person. Believe me when I say that includes really smart people. People who are doctors, lawyers, professors. I know this because I deal with lots of professionals' children and when we talk I am amazed about what they don't know.

We are truly dependent on you as professionals in your field to help guide us. In general, one wants to trust that we are being given the straight scoop. NO ONE WANTS TO PAY MORE THAN THEY HAVE TO FOR A PRODCT

I actually considered NY Life, because of the AAA rating and have been around forever. My agent told me he used to sell it. He gave me the spiel about how he used to share with clients how he sold it be mentioning that it was the insurance of presidents and such. I was still thinking of them, but the fact that Genworth seemed to be doing this LTC for a long time, their annual data collection on LTC is used by the industry as main reference point, and when I read a whole lot of articles about LTC and constantly saw their name as an industry leader in LTC, I started to feel a bit more comfortable. Their A- rating did concern me a great deal. I wanted AAA for piece of mind, but when I saw the price and the plan coverage, it put me on the fence. That's the reason I asked questions on this site.

I will let you know that for as much as I knew, I learned more after I purchased the policy, because I continued to read on forums like this. There are so many working variables in purchasing long term care and how those variables impact the premium. You add in the fact that you can't predict the future and the average person is confused with a daunting task to protect his family. Again, that's where it's important to read prior to purchase and then the policy when it gets to you.

I cannot stress how important you are to us regular guys. I don't think of myself as average only because I usually do a lot of homework. My wife would be the average person because she doesn't want to spend the time researching stuff. She just wants me to do the homework and call her when she needs to sign. I knew there was a need and I took some initiative because I wanted to control costs before retirement. However, having met with different agents from independents, Banker Life (I did not like them after reading about them all over the place on the web. When I told the agent I was no longer interested, he became nasty toward me and thought I was an agent too. It was pretty easy to rule them out). I like the independents because they can show you everyone's numbers in the apples to apples format. Although NWM was not a company that I met with, the AAA rating could have been a winner if I don't know about the others. How many people are going to read forums like this. I have not seen many articles saying that NWM is a lot more expensive. I also think that the average NWM agent is not going to go out of their way to show comparable services for less money to a potential client. Why would you want to when your commission depends on it. As an average uninformed person, if the NWM agent came in contact with them, they would look at the dividend and the plan and sign on the dotted line in one or two sessions. If you were to mention a dividend that has been paid for a number of years, that is a plus because I am feeling as if I am paying less. I will tell you that the NY Life AAA rating and longevity still plays with my mind. I want to have that. Believe it or not, I called Genworth to discuss the stability of their company just a few weeks ago. I was upfront and I told them, I was young enough to abandon ship now and go with another company. I must tell you that they had someone from the corporate office take the time to talk with me about the resignation of the CEO, their current search and the person they have as interim now. I did not expect them to be able to tell me anything. I just wanted to hear what they would say. I did ask if they were considering leaving California since their rate increases were denied. She told me that there has not been any discussion at this time to not sell in any states at this time.

Would I be willing to pay twice the premium with another company? No. However, I would consider paying 10 to maybe 20% more for that piece of mind with a AAA rating.

I know this response was long, but I wanted to give you a thorough response. The bottom line is that the average person is so vulnerable to whomever the agent is that comes to their home.

 

[Chuckles21]

I will tell you that as a regular guy, I don't want to pay extra money for anything if it's the same product. However, a lot depends on my financial situation. When I wasn't making much money, but I needed insurance for my car or home, I really just searched for the cheapest insurance that gave me the same coverage. I did not care too much about with home it was with at that time. However, I am a little more selective now. I understand the differences too between buying insurance for my home insurance with State Farm and then with some of these other insurance companies. What I have learned is two things. First, one has to READ and UNDERSTAND the policies. For example, State Farm costs more but it covers more in a variety of situations. However, AAA only covers you if specific perils. That is huge, but the average person does not read that or understand that. The average person, has no clue. I know I did not. You usually don't know what you have and what you don't have until something happens. That is the average person. Believe me when I say that includes really smart people. People who are doctors, lawyers, professors. I know this because I deal with lots of professionals' children and when we talk I am amazed about what they don't know.

We are truly dependent on you as professionals in your field to help guide us. In general, one wants to trust that we are being given the straight scoop. NO ONE WANTS TO PAY MORE THAN THEY HAVE TO FOR A PRODCT

I actually considered NY Life, because of the AAA rating and have been around forever. My agent told me he used to sell it. He gave me the spiel about how he used to share with clients how he sold it be mentioning that it was the insurance of presidents and such. I was still thinking of them, but the fact that Genworth seemed to be doing this LTC for a long time, their annual data collection on LTC is used by the industry as main reference point, and when I read a whole lot of articles about LTC and constantly saw their name as an industry leader in LTC, I started to feel a bit more comfortable. Their A- rating did concern me a great deal. I wanted AAA for piece of mind, but when I saw the price and the plan coverage, it put me on the fence. That's the reason I asked questions on this site.

I will let you know that for as much as I knew, I learned more after I purchased the policy, because I continued to read on forums like this. There are so many working variables in purchasing long term care and how those variables impact the premium. You add in the fact that you can't predict the future and the average person is confused with a daunting task to protect his family. Again, that's where it's important to read prior to purchase and then the policy when it gets to you.

I cannot stress how important you are to us regular guys. I don't think of myself as average only because I usually do a lot of homework. My wife would be the average person because she doesn't want to spend the time researching stuff. She just wants me to do the homework and call her when she needs to sign. I knew there was a need and I took some initiative because I wanted to control costs before retirement. However, having met with different agents from independents, Banker Life (I did not like them after reading about them all over the place on the web. When I told the agent I was no longer interested, he became nasty toward me and thought I was an agent too. It was pretty easy to rule them out). I like the independents because they can show you everyone's numbers in the apples to apples format. Although NWM was not a company that I met with, the AAA rating could have been a winner if I don't know about the others. How many people are going to read forums like this. I have not seen many articles saying that NWM is a lot more expensive. I also think that the average NWM agent is not going to go out of their way to show comparable services for less money to a potential client. Why would you want to when your commission depends on it. As an average uninformed person, if the NWM agent came in contact with them, they would look at the dividend and the plan and sign on the dotted line in one or two sessions. If you were to mention a dividend that has been paid for a number of years, that is a plus because I am feeling as if I am paying less. I will tell you that the NY Life AAA rating and longevity still plays with my mind. I want to have that. Believe it or not, I called Genworth to discuss the stability of their company just a few weeks ago. I was upfront and I told them, I was young enough to abandon ship now and go with another company. I must tell you that they had someone from the corporate office take the time to talk with me about the resignation of the CEO, their current search and the person they have as interim now. I did not expect them to be able to tell me anything. I just wanted to hear what they would say. I did ask if they were considering leaving California since their rate increases were denied. She told me that there has not been any discussion at this time to not sell in any states at this time.

Would I be willing to pay twice the premium with another company? No. However, I would consider paying 10 to maybe 20% more for that piece of mind with a AAA rating.

I know this response was long, but I wanted to give you a thorough response. The bottom line is that the average person is so vulnerable to whomever the agent is that comes to their home.

Great post, thanks for the time and insight. I enjoyed hearing your take on your situation.

 

[Mr_Ed]

I will tell you that as a regular guy, I don't want to pay extra money for anything if it's the same product. However, a lot depends on my financial situation. When I wasn't making much money, but I needed insurance for my car or home, I really just searched for the cheapest insurance that gave me the same coverage. I did not care too much about with home it was with at that time. However, I am a little more selective now. I understand the differences too between buying insurance for my home insurance with State Farm and then with some of these other insurance companies. What I have learned is two things. First, one has to READ and UNDERSTAND the policies. For example, State Farm costs more but it covers more in a variety of situations. However, AAA only covers you if specific perils. That is huge, but the average person does not read that or understand that. The average person, has no clue. I know I did not. You usually don't know what you have and what you don't have until something happens. That is the average person. Believe me when I say that includes really smart people. People who are doctors, lawyers, professors. I know this because I deal with lots of professionals' children and when we talk I am amazed about what they don't know.

We are truly dependent on you as professionals in your field to help guide us. In general, one wants to trust that we are being given the straight scoop. NO ONE WANTS TO PAY MORE THAN THEY HAVE TO FOR A PRODCT

I actually considered NY Life, because of the AAA rating and have been around forever. My agent told me he used to sell it. He gave me the spiel about how he used to share with clients how he sold it be mentioning that it was the insurance of presidents and such. I was still thinking of them, but the fact that Genworth seemed to be doing this LTC for a long time, their annual data collection on LTC is used by the industry as main reference point, and when I read a whole lot of articles about LTC and constantly saw their name as an industry leader in LTC, I started to feel a bit more comfortable. Their A- rating did concern me a great deal. I wanted AAA for piece of mind, but when I saw the price and the plan coverage, it put me on the fence. That's the reason I asked questions on this site.

I will let you know that for as much as I knew, I learned more after I purchased the policy, because I continued to read on forums like this. There are so many working variables in purchasing long term care and how those variables impact the premium. You add in the fact that you can't predict the future and the average person is confused with a daunting task to protect his family. Again, that's where it's important to read prior to purchase and then the policy when it gets to you.

I cannot stress how important you are to us regular guys. I don't think of myself as average only because I usually do a lot of homework. My wife would be the average person because she doesn't want to spend the time researching stuff. She just wants me to do the homework and call her when she needs to sign. I knew there was a need and I took some initiative because I wanted to control costs before retirement. However, having met with different agents from independents, Banker Life (I did not like them after reading about them all over the place on the web. When I told the agent I was no longer interested, he became nasty toward me and thought I was an agent too. It was pretty easy to rule them out). I like the independents because they can show you everyone's numbers in the apples to apples format. Although NWM was not a company that I met with, the AAA rating could have been a winner if I don't know about the others. How many people are going to read forums like this. I have not seen many articles saying that NWM is a lot more expensive. I also think that the average NWM agent is not going to go out of their way to show comparable services for less money to a potential client. Why would you want to when your commission depends on it. As an average uninformed person, if the NWM agent came in contact with them, they would look at the dividend and the plan and sign on the dotted line in one or two sessions. If you were to mention a dividend that has been paid for a number of years, that is a plus because I am feeling as if I am paying less. I will tell you that the NY Life AAA rating and longevity still plays with my mind. I want to have that. Believe it or not, I called Genworth to discuss the stability of their company just a few weeks ago. I was upfront and I told them, I was young enough to abandon ship now and go with another company. I must tell you that they had someone from the corporate office take the time to talk with me about the resignation of the CEO, their current search and the person they have as interim now. I did not expect them to be able to tell me anything. I just wanted to hear what they would say. I did ask if they were considering leaving California since their rate increases were denied. She told me that there has not been any discussion at this time to not sell in any states at this time.

Would I be willing to pay twice the premium with another company? No. However, I would consider paying 10 to maybe 20% more for that piece of mind with a AAA rating.

I know this response was long, but I wanted to give you a thorough response. The bottom line is that the average person is so vulnerable to whomever the agent is that comes to their home.

I agree.
In my mind it is worth spending an extra 10% (maybe 15%) if the more expensive company has considerably higher financial ratings. But, I would not pay 30% or more in premium for a comparable policy with the highest financial ratings.

Insurance companies are so highly regulated and so well-reserved, the probability of failure is extremely low.

mrsd

 

[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?

None of the American General life policy holders suffered that I know of with AIG declaring bankruptcy. Its all about reserves.

What will we all say when the heavily rumored major rate hike for new business on their brand new PC Flex products is announced by GNW in the fall? They will still be cheaper then MM/NML...but the gap will certainly close.

Just thinking out loud.

 

[CALTCAgent]

(Slaps Knee) Good one CALTCAgent, you got me there. I mean why would i believe in something that started getting paid out in 2007 and has continued to be through arguably the toughest financial stretch since the great depression. By a company who has paid DI dividends every single year since 1971 and in 2011 totaled over $233,000,000 (10 times higher than closest competitor paying out DI dividends). DI being the closest thing to a similarly underwritten product. From a company that has paid a life dividend every single year since 1871 and paid out more in one year (2011 roughly $4.85 billion) for life dividends than the 3 closest competitors combined. I know those other dividends mean nothing to LTC but you cannot ignore a companies overall perception of dividends and how important they are for the company. P.S. All those billions of dividends just so happen to be non-guaranteed as well. Hard to believe something that isn't guaranteed keeps getting paid out isn't it.

I mean why would i believe in a company with that track record over one that has had recent price increases on a product due to errors in pricing and assumptions and now says to trust them, they corrected those mistakes and it won't happen again. We know we are so much less expensive than those guys over there but they just don't get it... we do.

Like i said it is all about perceived value, not just in the premium but in the company that premium goes to.

You never answered how much to factor for dividends for LTC?

 

[ikeman07]

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.

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.

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.

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.
- - - - - - - - - - - - - - - - - -

One hour on a Monday counts for the whole week. This can help cut costs for someone during the elimination period in the beginning when they might not need too much care. Either way they should have a proper amount of cash set aside.

Please tell me how you can get a licensed home care provider to show up for one hour during a given day?

I called a local provider here in my area, you are correct, the minimum is 2 hours. I stand corrected. My previous post should have read 2 hours on a monday counts for the whole week.

 

[GaInsProf]

CSalter- Great post- so refreshing to see someone who get's it with regards to protecting themselves and their families from the possibility of needing LTC. I am very passionate when it comes to discussing it with my clients, due to a family experience myself, but most just glaze over and say I won't need it.

Quick thoughts on Genworth- they are heavily leveraged with the percentage of their book being LTC. When claims start hitting they will have to raise rates or become Penn Treaty II, but hey- Hancock jumped their's 40% last year, so this will not be an uncommon event.

One possible suggestion to ponder- Not sure what your thoughts are on annuities, but some of them have very attractive riders for LTC- most inexpensive, a few for free. That's an approach I utilize for my clients who don't want to purchase an outright policy. Not pushing it, but you seem to be someone who is analytical and just thought I'd run that one by you to consider.

 

[Chuckles21]

You never answered how much to factor for dividends for LTC?

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.