MikeRobinson
Expert
- 34
The rating would be a huge issue for me. Sleeping sound is important. Plus the e&o. Need to check but almost positive excludes anything under a-
Anybody Doing this Safe Harbor Thing?
- Thread starter cowgoesMoO
- Start date
- 10,318
I was considering Phoenix for their IAs. But the downgrade last July and negative outlook is just too much for me to accept. Plus I read a few articles saying they were shopping the company around "unofficially" to see if anyone might be interested in taking them over.
They have some great features on their IAs, like a LTC income doubler for 2 of 6 ADLs (doesnt have to be permanent like the others). Then they released a new Indexing option in partnership with ssga... but the ratings and uncertainty scare the hell out of me.
They have some great features on their IAs, like a LTC income doubler for 2 of 6 ADLs (doesnt have to be permanent like the others). Then they released a new Indexing option in partnership with ssga... but the ratings and uncertainty scare the hell out of me.
- Thread starter
- #23
- 179
some great input here, I have E&O insurance and didn't even realize that there were exceptions based on the rating of the company.
I'll have to revisit what kind of coverage I have. All I know is that critical illness used to be one of my big money makers and I got away from it when I stopped selling health plans. Now that I focus more on life insurance, I was stoked when I saw this plan.
I don't understand the standards at which they accelerate the benefits. I know they say its based off of the severity of the client's condition, but will it be fair when the time comes?
one problem I see is how an agent could present the plan to be much more than it is, especially with the commissions at that level.
I'll have to revisit what kind of coverage I have. All I know is that critical illness used to be one of my big money makers and I got away from it when I stopped selling health plans. Now that I focus more on life insurance, I was stoked when I saw this plan.
I don't understand the standards at which they accelerate the benefits. I know they say its based off of the severity of the client's condition, but will it be fair when the time comes?
one problem I see is how an agent could present the plan to be much more than it is, especially with the commissions at that level.
- 234
Yeah im not real comfortable not knowing the mystery formula to calculating the benefits either. Supposedly based on how the disease effects your life expectancy based on their secret formulas. I don't know many clients that would be very comfortable with the unknown variables.
- 10,318
Do you guys not read the illustrations and product guides for the products you sell?????
A quick glance at the illustration (the boring part full of words before you get to the illusions), and you will see the basic stipulations of the terminal/critical/chronic illness rider.
And it is not just some arbitrary magic formula. Usually you can find specifics if you read the product guide or the agents rider guide.
Take NA for example:
For a Terminal Illness they are first legally required to use a benefit discount rate (based on current interest rates) combined with a life expectancy expectation. 18 months is their standard life expectancy for a Terminal Illness claim. (a doctor must certify 24months or less for any terminal illness claim).
----------
Take a few min to actually read the illustration and product guides and it will no longer be a mystery to you.
Most all Terminal Illness Riders require a doctor to certify 24months or less to live.... so the actuarial calculations would never be based on any longer than 2 years.
A quick glance at the illustration (the boring part full of words before you get to the illusions), and you will see the basic stipulations of the terminal/critical/chronic illness rider.
And it is not just some arbitrary magic formula. Usually you can find specifics if you read the product guide or the agents rider guide.
Take NA for example:
For a Terminal Illness they are first legally required to use a benefit discount rate (based on current interest rates) combined with a life expectancy expectation. 18 months is their standard life expectancy for a Terminal Illness claim. (a doctor must certify 24months or less for any terminal illness claim).
----------
Take a few min to actually read the illustration and product guides and it will no longer be a mystery to you.
Most all Terminal Illness Riders require a doctor to certify 24months or less to live.... so the actuarial calculations would never be based on any longer than 2 years.
- 234
Yes i have actually read the product guides etc... And if a client has a heart attach and is out of work for 2 months, how much should he expect to receive from his $300k policy? There is no way for you to know before the carrier tells you. How much has your life been shortened etc... is not a good answer for someone else to decide if i hold the policy as a client. I only wrote one with these living benefits so its new to me as life insurance in general. Maybe you can enlighten me and the others that won't ask?
- 10,318
If it was a NA/Midland policy then they would receive a minimum of $20k and a maximum of $50k.
Again, read the specific Rider Guide (often separate from the policy guide) along with the Illustration. It is all in there...
----------
As to the life expectancy issue, do you think life insurers do not know the averages of how a certain illness affects a person? What do you think they are doing when they look at an applicant whos had a heart attack?? They have a couple hundred years of mortality statistics along with preset formulas on how to calculate those types of things.
At the end of the day the free Riders are what they are.... an extra layer of protection, but not a full fledged Critical Illness policy. If you are selling them by leading with the CI Rider then you are doing clients a disservice. The free CI rider is just a bonus to the primary need which is life insurance. Same for Chronic/Terminal Illness Riders.
But you are able to give ranges of what most claims would be. And since the Rider is not the primary need.... I dont see why a client would look down on the Rider... the only way that will happen is if it is sold in a misleading way... which is why agents need to read illustrations and policy reference guides extremely carefully.
----------
If you want a good CI Rider bundled with a life policy check out Assurity. They have a true CI Rider that is very similar to their standalone CI policy.
Mass has the best LTC Rider hands down. (the only one with any type of decent inflation protection)
Last edited:
- 234
Thank you for your help!
- Thread starter
- #29
- 179
Great post....
I totally agree the CI and Chronic illness riders should be looked at as an added bonus, not sold as a true CI or LTC rider.....
I might be mistaken but doesn't the Chronic illness rider with MoO give you the full 80% if that is what you choose, not based on the severity of ailment, but if you can't perform 2 of the 6 ADL's you get however much you want up to 80%. I'm sure that other companies have the same type of stipulation on fully underwritten GUL's.
They apply a discount rate.
From the rider specimen:
A chronic illness benefit is an amount equal to a requested acceleration less:
(a) an amount equal to the actuarial discount rate multiplied by the insured’s life expectancy in years;
and
(b) an administrative charge equal to $100; and
(c) the amount of any loan as of the calculation date multiplied by the benefit ratio.
The actuarial discount rate will be determined as of the date of the requested acceleration.
In no event will a chronic illness benefit be less than the surrender value on the calculation date multiplied by
the benefit ratio.
You also can't accelerate more than the per diem HIPAA max multiplied by the days in the year that the insured is expected to be chronically ill.
Similar threads
