Fewer Americans Plan For LTC

[Guest]

[I'll get flamed (or deleted or banned) for posting this, but I thought it was spot-on and relevant to the discussion.]

Like to article below:
Voices: Matt Zagula, The Trouble with Long-tern Care Insurance - Financial Adviser - WSJ

Wall Street Journal
June 28, 2011, 8:07 AM ET

Voices: Matt Zagula, The Trouble with Long-tern Care Insurance


Matt Zagula is the president and founder of the Estate & Elder Planning Center in Weirton, W.Va.

The largest risk faced by the American retiree is the cost of long-term care. We know from the AARP that one in two Americans will face some sort of disability. And the cost of that care can be significant: Home healthcare costs can reach $14 to $15 per hour, and a nursing home can cost north of $7,000 a month.

A client who's worked hard to accumulate their life savings could be wiped out in a relatively short period of time. For that reason, all of our planning is geared toward preventing that from happening. Because when you're out of money, you're out of options.

Our priority is to devise plans that help clients build on their retirement savings and meet their objectives for lifetime income without the need to purchase long-term care insurance.

In my opinion, long-term care insurance is a bad buy. It is experience rated, just like homeowner's or car insurance, and ultimately the premium is not fixed. That's a big risk when you have a retiree on a fixed income. If they're faced with a premium increase of possibly 20% or more, they won't be able to afford it. Then they either have to reduce their coverage, or they have to let it lapse altogether.

It's challenging for financial advisers because the advice in the manuals, and in the literature that's put out into the adviser community, is to sell long-term care insurance. But there aren't many Americans over the age of 60 who haven't been pitched long-term care insurance. And the percentage of buyers is still less than 10%. You have an audience that's saying "This is not what we want."

So we, as advisers, struggle for answers to the problem of long-term care. And clients suffer as a result of different people in the industry not all being consistent in their approach. Some advisers believe in 'magic' trusts developed by estate and elder law attorneys, and some believe in insurance-based products as a stand-alone solution.

Frankly the sweet spot is a combination of the two. But unfortunately America's retirees are underserved when it comes to accessing these types of services from teams of professionals knowledgeable in how to create a protected financial environment.

 

[Arthur Rudnick]

I'll get flamed (or deleted or banned) for posting this, but I thought it was spot-on and relevant to the discussion.

And why is that Al, for posting a public article?
Pleeeeze!

Look, for every article that's out there against the product, I can produce 10 that will tell you how good it is.

Try and explain to my dozens of policyholders who are presently on claim and receiving benefits how lousy the product is and how stupid they were for buying it.

I have mentioned many times that LTCi is not appropriate in every situation. Neither is life insurance, DI, cancer insurance or pet insurance. So, what's your point?

You don't like the product, you don't understand the product, you don't trust the product, yada, yada, yada.

So, here's what I suggest......

Don't recommend it & don't sell it! (Unless of course you can make a buck off it by referrring someone to your friend who would be happy to split the case with you)
Your opinions are welcomed, but for you to try and convince the entire LTCi industry that the product is worthless proves absolutely nothing.
- - - - - - - - - - - - - - - - - -

I don't feel either life or LTC has to be "sold."Fairly easy transactions. Especially life insursnce. It's completely transactional. Everyone applies for it.

Jack,
I've always been a firm believer that LTCi cannot be sold. Years ago I was taught that "sales doesn't start until the customer says 'No".

When someone says "No" for this product, it's usually over.

I totally agree with you on who that LTCi prospect really is. If I had to guess, probably 70% of my business over the years was the result of a direct family experience with a LTC event. Usually a child going through a situation with a parent and realizing the emotional and financial burden involved.

Referrals from estate planners, financial adviors and the like, also result in a high percentage of sales. But for those (like Al) who do not see a need for the product, you can pull every trick out of your bag and it will very rarely result in a sale.

And, why would anyone be in front of a prospect to sell a policy if that person has no desire to purchase a policy in the first place? P&C agents are not trying to sell auto insurance to those who do not have an auto.

"Arthur, which of the following would you consider a "LTCI specialist"

Agent 1: Produces $60,000 LTC FYC year in year out. Writes no other products. Works for Acsia, LTCFP, or some other outfit.

Agent 2: Produces $250,000 traditional LTCi FYC year in year out; also Produces $250,000 Life Insurance FYC annually.

Agent 3: Produces $4,000,000 of Lincoln MoneyGuard premium annually. Also manages $100 Million AUM.

Of these 3 agents, who do you think might be the most competent in LTC knowledge and could properly hold themself out to the public as an LTC specialist?

Good question.....
I'd choose Agents #1 & #2. But the point I was tring to make was that a Specialist is someone who focuses on the product, opposed to someone who dabbles in it and submits
5-6 applications a year.

In NY, there are 12 LTC carriers, with about 40 different products. I just don't beleive that the "dabbler" can serve his/her client properly. One has to be a "speciaist" to understand the complexity of every product offering.

 

[Guest]

And why is that Al, for posting a public article?

Pleeeeze!

You have history here as moderator who will delete posts that you don't agree with. That is your right as a moderator to say (and do.) I don't feel secure that anything I post that is in the least somewhat critical of your "fan boy" product will remain in the section. That is MY right to say. (You will probably delete this anyway.)

Don't recommend it & don't sell it! (Unless of course you can make a buck off it by referrring someone to your friend who would be happy to split the case with you)[/I]
Your opinions are welcomed, but for you to try and convince the entire LTCi industry that the product is worthless proves absolutely nothing.

This is where your bias gets in the way of your argument. I have LTC and I recommend it, but I don't sell it directly. However, I'm objective enough to understand and to explain to my clients that the product has flaws and that there are certain risks involved. I tell them about the recent history of high rate increases, about some of the stunts that some carriers have pulled (i.e. Bankers Life as documented in the NYT) and that there is no certainty that claims will be paid when due X number of years from now.

It's no different from life insurance... or any insurance, but LTC has had a rather checkered recent past with companies trying to weasel out of payments, or going under, or leaving the sector (like Met) altogether.

There are lots of reasons so few people have LTC, but one of them is that the product is flawed (not the concept) and that the confidence of both the customer base and the media is lower than that of other insurance vehicles (life, health, etc.) about the future of the LTC product.

If you (any agent) is not telling your LTC clients about the risks as well as the rewards of the product, you are not doing them a good and fair service.

Why do guys like Zenga write articles like the one quoted quoted above about LTC? Because they WANT the product to fail? C'mon man! Take off your rose-colored glasses and take a look at the state of LTC insurance products and tell me what you REALLY see instead of posting propaganda about it to newbies and others who have not had any experience in the sector.

This product and this sector is in trouble, there are tons of experts on LTC (like you are) who attest to it... and for you to deny it and blame it on people like me who are not afraid to stand up and say here that the emperor has no clothes, is again not doing a good service.

I'm not against you, Arthur. I'm saying that the product that you are pitching here has flaws and risks and that it would be helpful if you would not over-moderate or castigate those who are not afraid to post about them here.

If you want to "beat up" on the issue, fine. But beating up on me and others here personally is again, not doing a good service.

Chill. We can discuss this as rational adults without personal insults or innuendo. I'm not your problem. I'm just a guy who disagrees with you... I'm not your mortal enemy so please don't treat me as such. Is that OK to ask?

Al

 

[GreenSky]

"You will probably delete this."

How is that not an attack? Why not just post what you want to say without suggesting that someone else is intolerant?

(I'm sure this will be deemed as an attack by at least one person in this venue.)

Rick

 

[Guest]

"You will probably delete this."

How is that not an attack? Why not just post what you want to say without suggesting that someone else is intolerant?

(I'm sure this will be deemed as an attack by at least one person in this venue.)

Rick

It's is only going to be seen as an attack by you because all you have is anger toward me. I tried to 'settle' with you. I put it all in the "fight club" so it would be private. Dave020 talked to you in Vegas about giving up this anger, but you want to carry this feud until your grave.

Your choice.

You can stalk me around this forum and post similar expressions of anger, but all you will get is the same response as above.

 

[ltcadviser]

And why is that Al, for posting a public article?
Pleeeeze!

Look, for every article that's out there against the product, I can produce 10 that will tell you how good it is.

Try and explain to my dozens of policyholders who are presently on claim and receiving benefits how lousy the product is and how stupid they were for buying it.

I have mentioned many times that LTCi is not appropriate in every situation. Neither is life insurance, DI, cancer insurance or pet insurance. So, what's your point?

You don't like the product, you don't understand the product, you don't trust the product, yada, yada, yada.

So, here's what I suggest......

Don't recommend it & don't sell it! (Unless of course you can make a buck off it by referrring someone to your friend who would be happy to split the case with you)
Your opinions are welcomed, but for you to try and convince the entire LTCi industry that the product is worthless proves absolutely nothing.
- - - - - - - - - - - - - - - - - -


Jack,
I've always been a firm believer that LTCi cannot be sold. Years ago I was taught that "sales doesn't start until the customer says 'No".

When someone says "No" for this product, it's usually over.

I totally agree with you on who that LTCi prospect really is. If I had to guess, probably 70% of my business over the years was the result of a direct family experience with a LTC event. Usually a child going through a situation with a parent and realizing the emotional and financial burden involved.

Referrals from estate planners, financial adviors and the like, also result in a high percentage of sales. But for those (like Al) who do not see a need for the product, you can pull every trick out of your bag and it will very rarely result in a sale.

And, why would anyone be in front of a prospect to sell a policy if that person has no desire to purchase a policy in the first place? P&C agents are not trying to sell auto insurance to those who do not have an auto.

"Arthur, which of the following would you consider a "LTCI specialist"

Agent 1: Produces $60,000 LTC FYC year in year out. Writes no other products. Works for Acsia, LTCFP, or some other outfit.

Agent 2: Produces $250,000 traditional LTCi FYC year in year out; also Produces $250,000 Life Insurance FYC annually.

Agent 3: Produces $4,000,000 of Lincoln MoneyGuard premium annually. Also manages $100 Million AUM.

Of these 3 agents, who do you think might be the most competent in LTC knowledge and could properly hold themself out to the public as an LTC specialist?

Good question.....
I'd choose Agents #1 & #2. But the point I was tring to make was that a Specialist is someone who focuses on the product, opposed to someone who dabbles in it and submits
5-6 applications a year.

In NY, there are 12 LTC carriers, with about 40 different products. I just don't beleive that the "dabbler" can serve his/her client properly. One has to be a "speciaist" to understand the complexity of every product offering.

My point Arthur is there are many high level LTC specialists that may derive 50% or more of their income elsewhere.

 

[Guest]

I just don't beleive [sic] that the "dabbler" can serve his/her client properly. One has to be a "speciaist" [sic] to understand the complexity of every product offering.

I agree with Arthur here. This is why I don't sell in this sector because the product IS complex by concept and some products are even more complex by design. There are a lot of moving parts and an agent really needs to have read a specimen policy to really understand the "gotchas" that may be in there.

This is why I (and many other agents) don't sell directly. We partner with someone who does this as their prime directive. Unless you want to get into the nuts and bolts of these plans and unless you have the ability to communicate them well to clients, I think it best to find someone (like Arthur?) to send your cases to in exchange for a fair split.

YMMV.

Al

 

[Mr_Ed]

Whether some LTC insurers stop selling new policies (or not) is irrelevant.

There are some interesting points along that line in this brief article:

Headline: IBM stops selling computers–future of computer industry in doubt! « LTCShop.com


nadm

 

[CALTCAgent]

I'll throw my 2 cents in to discussion. Not trying to defend or attack anybody's ideas.

It was mentioned the product has some "flaws". I do feel there are some improvements that I would like to see.

I don't know of any financial product without "issues".

It was pointed out that LTC insurance is not for everybody. I totally agree. You really have to look at it on a case by case basis.

It is a really hard product to "sell". I would agree better to find an experienced LTC agent and share the business. Something is better than nothing.

Some Financial planners definitely have reasons they don't like the product.

I think there is another thread about an agent being arrested where the CFP said LTC was bad for her, he recommended an annuity instead. She came down with dementia and is going to need care.

I bet the family would love to have that LTC policy right now ?

 

[Arthur Rudnick]

You have history here as moderator who will delete posts that you don't agree with.

Al, you can believe what you want but as a moderator, I have NEVER deleted a post for any reason other than it being spam. Just because you say something, that doesn't make it a fact.

Would you care to show me one example of any post that I have deleted? If I were to delete every post that I disagreed with, every post of yours would be history.

You claim that you have a LTCi policy and that "you're objective enough to understand and to explain to your clients that the product has flaws and that there are certain risks involved. I tell them about the recent history of high rate increases, about some of the stunts that some carriers have pulled (i.e. Bankers Life as documented in the NYT) and that there is no certainty that claims will be paid when due X number of years from now"

Unfortunately, you don't show your clients articles about all the good things that LTCi does. It's too bad that the "good things" just don't make headline news. The industry paid almost $9 BILLION in claims last year, have you ever mentioned that to a client of yours?

What products do you personally sell Al? Life insurance, med supps, final expense? Let me know so I can dig up some articles bashing those products, because I'm sure they exist.

Are there any insurance products that you like & believe in?