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- #21
Arthur Rudnick
Guru
- 1,652
Sorry,
I failed english composition in 6th grade. But, if you could read my post and somewhat agreed with what I said, then I've accomplished my goal.
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Al, you raise some good points and I'll try to address each one.
"Besides those who are not insurable and those who simply can't afford it, who else it is not appropriate for?"
Other than those 2 groups, LTCi is right for everyone else, except for a 3rd group and those are people who are in denial. "It will never happen to me". Of course statistics can very easily prove that group wrong.
"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".
People who have in excess of 3, 4, or 5 million dollars didn't get that way by being stupid. The concept of any insurance is to purchase protection for pennies on the dollars.
A wealthy individual or couple can protect millions of dollars down the road by spending a few thousand dollars a year. Why wouldn't they want to do that? Many folks can comfortably afford to replace their house if there was a fire, yet they buy homeowner's insurance.
I have many policyholders who have a substantial net worth but would rather buy a policy than put hundreds of thousands of their own dollars at risk.
One major problem with the product is that people don't like paying money for something they don't think they will use.
Al, I have never met someone who told me that they lay awake each night worried because for 25 years they have been paying homeoner's insurance and never had a fire. If a fire (or LTC event) took place the policy will be there for you. Isn't that what insurance is all about?
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.
That goes back to my earlier response about "Denial" which is the reason that most people do not purchase a policy. But, when your next door neighbor @ 65 has a stroke and has to spend the rest of his life in a wheelchair and his wife has to sell the home so she can afford to provide care for her husband, then "Denial" takes on a very different look.
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.
How about a Return of Premium Rider? Pay for 30 years, never use the policy, die and your beneficiaries will get 100% of the premium back. Does that solve the problem? Or how about a life/ltc hybrid product? If LTC services are needed the money is available from your life insurance policy (accelerated death benefit) if not, then you have a tax-free death benefit available for your family.
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.
Al, can you name me any insurance product on the planet (other than life) that can guarantee premiums remain the same for the life of the policy? My health insurance goes up 10%-20% every single year. My homeowners premiums increases every year, so does my auto policy. Why should LTCi (which is Health insurance) be any different?
LTC is seen by many as a "gamble" where the deck is stacked totally in the house's favor.
Many people see all types of insurance that way. But for you, who is in the insurance business, I would expect you to be smarter than most uneducated consumers.
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.
What's the win-win-win? You obviously don't believe in the product, you've made that very clear, BUT.......... if you can find a live-wire, you have no problem sending him/her to your friend so you can do a split.
Let's see...... the product is only worthwhile if you can make a buck on it? I would expect more than that from you.
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.
It's only flawed if you don't understand it, and it's obvious that you don't.
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.
As I mentioned earlier, LTCi is a relatively new product and it's going through growing pains. No one really knows where it's going to eventually wind up. If that prospect doesn't realize a need for the product then you're not dealing with a viable prospect. I don't sit in front of people who have no need for a LTC policy. Why would I do that? My best prospect is one who's mother, at 82 was just diagnosed with Alzheimer's and has to enter a nursing home. She is watching her parent's assets being depleted by $10,000 each and every month. That person, who may very well have been in denial for the past 20 years now has a wake-up call. They had no LTC plan, they never saw the need for one. But now, it's different. That's not a sale Al, that's a lay-up.
Do you have a LTC policy for yourself & your wife? Probably not but you should. At 64, (not sure how old Mrs. Al is) it's something that you should consider. Right now, you're self-insured. If you had a stroke tomorrow, where would the money come from to pay for your care? Are you willing to tap into your pensions, your stocks, your savings? What would happen to your income? Your social security, your interest & dividends, your IRA distribution?
How would your wife maintain her standard of living if $100,000/year of family income went for the cost of your care?
I'm not trying to sell you a policy Al, I just want you to understand that there is a very valid reason for the product's existenece. Again, is it right for everyone? No! But it's right for more folks than you're willing to admit.
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. Read his post over and over and did not find the word "stupid" in it but I did see him appealing to you to quit being a hypocrite for jumping at the chance to earn a commission on a product in which you obviously have no confidence.
