Fewer Americans Plan For LTC

[billberry12]

OK. You meant life insurance, not life in general...big difference.

As far as your "middle class is priced out" statement...if the middle class, (myself included)... would purchase LTCI when in their early 50's (like my wife and I did), they wouldn't be "priced out".

The probelm is that so many middle class people postpone this purchase until their middle to upper 60's. Then, a large percentage are uninsurable, or, they have "priced" themselves out.

Denial is a costly emotion for lot's of people.

In the LTCI business...that is THE competition.

 

[VolAgent]

Certainly it would make sense to buy in their 50s. But as LGilmore often points out, more and more seniors are retiring "red". They were still deep in debt in their 50s and didn't have the disposable income to buy LTCi. I'm not saying it to excuse their behavior, just a statement of fact. By the time they are in the 60s and finally can tread water, they are staring at the corresponding premium and insurability issues.

Arthur is right, LTCi needs a spokesman to raise awareness. Heck, life insurance needs one too. These stupid commercials from New York Life, MetLife and State Farm aren't doing anything to inform consumers as to the need for life insurance. Even if LTCi carriers start advertising, don't be surprised if you get equally lame commercials.

 

[Arthur Rudnick]

Certainly it would make sense to buy in their 50s. But as LGilmore often points out, more and more seniors are retiring "red". They were still deep in debt in their 50s and didn't have the disposable income to buy LTCi. I'm not saying it
to excuse their behavior, just a statement of fact. By the time they are in the 60s and finally can tread water, they are staring at the corresponding premium and insurability issues.

Look, like every other insurance product, LTCi is not appropriate for everyone.

I was with a couple yesterday; a 57 year old lady and her 68 year old husband. Her husband, with diabetes, hypertension, high cholesterol and......... 6'0" / 298 lbs. was uninsurable with every carrier. I knew that going in.

So, I sold the wife a policy (loaded benefits, which she wanted due to her mother being in a nursing home with Alzheimer's) for $5,800/year. She's at the target age for purchase and she can comfortably afford the premium.

So, now I'm telling the husband that he needs to get his fat ass below 250 lbs and maintain it for a period of 6 months and then he'll have some options to consider.

But, if he does that, he'll be 69 or 70 years old and if he looked to purchase the same policy & benefits as his wife, he'd be looking a premium of $12,000 for himself, bringing their combined premium to almost $18,000/yr.

Now I'm good at what I do, but I highly doubt that I'm going to convince this guy to pull the trigger on a premium like that.

The point is, everyone has a different situation and even if a LTC policy is right for most, (and it is) not everyone will be able to afford it or as in this case, not everyone is going to qualify for it.

I wish I could sell $150/day policies but the cost of a nursing home in the NY metro area is $350-$400/day, so I'm selling policies with $250/day in benefits, which makes even an average policy very expensive, even though the income level in this area is higher than most.

The only excuse that I accept from a prospect for not buying a policy is "I can't afford it". If they can't afford it. it's over! And, as you correctly stated, due to the economic times we live in, I'm hearing those words more & more often.

 

[bluemarlin08]

I say Vol Agent hit the mark. I don't earn 90% of my income from LTCi, but I do sell several policies a year. My few is there are shrinking number of society that can afford the current rates much less the potential for rate increases. All my wealthier clients "get it" and do buy policies. Those that really need it are getting priced out of the market, JMO.

 

[Crabcake Johnny]

Arthur,

I can only comment based on conversations I've had with agents looking to sell LTCi. Training seems to be the largest issue. I've had agents tell me that some agencies won't appoint them to sell the products unless they have an app. How can they have an app without training?

I ran into this issue years back when I was thinking about offering DI. Most agencies wouldn't appoint me without an app. Those that would didn't offer what I'd consider "ground flood" training.

Then, when speaking with certain agencies, their side of the story is it's very hard to invest in a lot of solid upfront training when so few agents actually sell - citing leads and marketing as the largest barrier to agents getting off the ground.

 

[Arthur Rudnick]

I say Vol Agent hit the mark. I don't earn 90% of my income from LTCi, but I do sell several policies a year. My few is there are shrinking number of society that can afford the current rates much less the potential for rate increases. All my wealthier clients "get it" and do buy policies. Those that
really need it are getting priced out of the market, JMO.

I stated in an earlier post that unfortunately this product has priced itself out of the market for many consumers. It's targeted to the middle-to-upper middle class. However, for someone in their early to mid 50s, in generally good health it is very affordable.

5% Compound & an Unlimited Benefit Period is not the way to go anymore. 3-5 years and either 5% Simple or 3% compound​

makes more sense.

What's the alternative? Without coverage the risk is HUGE! At $80,000-$120,000 per year for care today, it doesn't take long for the average family to blow through an entire life's savings. And, that's today. In 25 years, the cost of care could be $250,000-$300,000/year. Average stay is 3 years. You do the math.

Medicaid? Medicaid is welfare and one nees to spend down their assets to be eligible and the quality of Medicaid care leaves a lot to be desired.

Self-insure and pay for care out of your own income & assets? Yup, that's an option and in fact, you are self-insured. You just don't understand the risk and what's at stake down the road.

It's all about priorities. It may not be a priority for you today but once folks get to a certain age and see their friends and/or family members require care, it takes on a totally different perspective.

I'm not trying to sell you on something that you don't believe in, I'm just saying that there's a place for the product in the market.

A LTC Specialist understands this. For those that don't sell it, or for those that dabble in it and only sell a few policies a year, they don't get it.

OK guys..........
I started this thread but I don't own it. I know there are a number of other LTC Specialist out there, how about hearing your thoughts?

Scott, Herman, Bill, Kerry, Tricia, help me out here, will ya?
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I can only comment based on conversations I've had with agents looking to sell LTCi. Training seems to be the largest issue. I've had agents tell me that some agencies won't appoint them to sell the products unless they have an app. How can they have an app without training?

Johnny,
Is it any different for any other insurance product? How about Final Expense, Med Supps, Life, etc.

Everyone needs proper training, regardless of the product. There are many GAs in the country who focus on LTCi.

 

[Guest]

Look, like every other insurance product, LTCi is not appropriate for everyone.

Besides those who are not insurable and those who simply can't afford it, who else it is not appropriate for?

I suppose the wealthy single or couple with three to five million in cash assets is not a prospect... but even then... cash assets have a way of losing value. Ask anyone who had a large stock portfolio... which is probably a smaller one now.

One major problem with the product is that people don't like paying money for something they don't think they will use.

People BELIEVE that they will get sick, or wreck the car, or have a tree fall on the house, but damn few believe they will need LTC.

What is needed is an LTC product where the client does not lose control of ALL the assets she pays in, perhaps similar to a WL or a VA or a fixed (indexed) annuity. And what is also needed is some guarantee that the $300 a day policy you buy now will still pay $300 a day ten years from now without an increase in premium (or cut in term) five years from now.

LTC is seen by many as a "gamble" where the deck is stacked totally in the house's favor.

I don't sell LTC directly. I have a gal not far from me where that is all she does... nothing else. We have a deal where I pre-sell (qualify) my life or health client and she comes in and meets with them on all the specifics and we do a split, I help her "close" and it's done and done. It's "found money" to me... and an "easy" sale for her... the client gets the benefit of a "trusted advisor" (me) and an LTC "expert" (her)... win-win-win.

That said, we only do about 4 cases a year. LTC is such a flawed product in its design (not concept) that most people just don't want it.

I used to be successful with the John Hancock LTC rider on their life policies. It was only of interest to wealthier people who also had a need (however small) for life coverage, but a lot of people bought it FOR the rider... and because they didn't lose control of the asset (on a over-funded UL or WL plan.) It was an "easy" sale. It answered the question of "What if I don't need LTC." The answer is simple "Well, Mr. Doe, either you will need LTC and will be able to afford the Ritz Carlton of assisted living centers... or you can draw out cash value and use it for retirement travel or expenses... or you will assume room temperature and make your wife or kids rather wealthy."

Of course Hancock no longer sells their Life Care Rider in CA. The only one one I know of is from One America (State Ins.?) and premium-wise, it's not as good a deal.

As another person noted, the LTC sector can't seem to get its act together and manufacture a product that people really WANT nor has the industry even tried to convince them that there is even a NEED. My hat is off to any agent who can make a full-time, sustainable living (say $75,000 FYC) in the LTC market.

Al

 

[Crabcake Johnny]

Everyone needs proper training, regardless of the product. There are many GAs in the country who focus on LTCi.

Would you mind recommending a few so I can steer agents that way?

 

[bluemarlin08]

I understand the situation very well and ask the client what their plan is and as you say self insuring is a joke as is Medicaid, who knows what Medicaid will look like in the coming years. One doesn't have to earn 90% of their income from LTCi to be able to discuss the issue honestly.

 

[arnguy]

Arthur, your post of 5:08PM yesterday has paragraphs, but could use a space between them. I had to reach for my eye drops after reading your erudite post.