- 2,584
Thanks for clearing that up!
Caught with Their Pants Down?
- Thread starter scagnt83
- Start date
- Thread starter
- #22
- 10,806
im assuming he is referring to JH.... idk
- 1,926
So what are you guys going to say when a client brings up the chance of future rate increases? Do you share the Hancock rate increase? How much of a rate increase should they anticipate in the future? I think you have to tell them, and I couldn't begin to predict what will happen to rates in the future.
- Thread starter
- #24
- 10,806
Exactly.
Technically as an insurance agent you have no obligation to inform them if they dont ask.
But if they do ask, then you are required to disclose previous rate increases.
How exactly do you explain a 40% increase?? Or even a 20% increase for that matter....
If someone is doing fee based planning and the LTC is a part of it, then they would be required to disclose the previous rate increases to the best of the advisors knowledge regardless if the client asks.
As far as future increases go, who the hell knows??!!
Seriously though, its now a very touchy subject to broach with a client.
I certainly wouldnt say not to worry about it!
We might need to start building in more room in their budget to accommodate rate increases...
I would say that JH has shot themselves in the foot, but I have a feeling that they will just be the first of many to do this with the boomers aging.
Last edited:
scagent,
the rate increases are all listed on the personal worksheet. whether they ask or not, all prior rate increases need to be disclosed when the personal worksheet is completed on the application. that's federal law. there's no getting around it. all the rate increases will be disclosed. period.
Last edited:
- Thread starter
- #26
- 10,806
Thats true, but when a carrier announces a future increase, it will not be on the worksheet yet.... but that does not mean that I dont know about it, or that I should not disclose the pending increase to the client.... even if the increase isnt on the policy line that Im presenting, morally its the right thing to do imo.
A companies past is the best way to judge the present/future.
And I was not trying to imply that just because they dont ask that it should not be discussed with them.
Also doesnt the worksheet just show the increases for that particular policy line, not all policy lines of that type??
- - - - - - - - - - - - - - - - - -
NDM,
So what exactly is your stance on the increase and their numbers being off so much. It seems that you dont deem it to be a very big deal.... am I correct in saying this? If so, what is your reasoning?
Last edited:
The personal worksheet has to show all rate increases approved on all policy series that insurer has sold in the past 10 years.
You can't tell anyone what the rate increases will be because we don't know the details.
There will be no rate increases for any policyholders that have the CPI inflation benefit--even policies going back 7+ years.
The amount of the rate increase will vary significantly depending upon the state of residence, the policy series and especially the type of inflation benefit.
Some policyholders may avoid a rate increase altogether if they simply decrease their inflation benefit from a 5% compound to a 4% compound.
And, lastly, it will depend upon what the DOI approves in your state. I find it hard to believe that the FL DOI or the NY DOI will approve the entire rate increase.
The bottom line is that current policies that are for sale are using much more conservative assumptions for: morbidity, mortality, persistency, and investment returns.
- 2,584
The personal worksheet also requires that you ask them if they could afford to keep the policy if the premiums went up say 20%.
Thanks!
Thanks!
great point.
Similar threads
