Geez Genworth, Your Comdex Score is Now a 61

[ltcadviser]

Why debate Genworth, when Hancock is about to release their Performance LTC product next week in most states. Billed as the lowest cost 3% compound LTC plan on the market (cheaper than MOO...and no more CPI option)...and with "performance credits" in their portfolio, the premium should reduce to Zero by the time you are 80...and if you never use it, the credits can actually generate a refund of premium. Not to mention their wonderful Comdex scores!!!

If it all sounds to good to be true, then it might be...but it should be interesting.

Herman, your thoughts? I can not say I would ever lead with this policy after reviewing the premiums. I can understand if due to heslth underwriting one might HAVE to use JH but otherwise.....no way.

 

[Arthur Rudnick]

It appears that their 3% or 5% compound inflation rider is the same as Transamerica's step-rated rider.

Benefits increase every year as does the premiums, which are based on attained age.

 

[ltcadviser]

It appears that their 3% or 5% compound inflation rider is the same as Transamerica's step-rated rider.

Benefits increase every year as does the premiums, which are based on attained age.

Arthur, have you ever written a step-rated Trans policy?

 

[Arthur Rudnick]

originally posted by ltcadviser

Arthur, have you ever written a step-rated Trans policy?

No Jack,
To date I've only written 3% or 5% compound built in.
Am I missing something?

 

[yankee466]

Herman, your thoughts? I can not say I would ever lead with this policy after reviewing the premiums. I can understand if due to heslth underwriting one might HAVE to use JH but otherwise.....no way.

Jack:

A little too soon for any final opinions on the product, but my first reaction was that it was like the sales pitch where the agent illustrates the EIUL product at 8.5% interest and promises that you would be able to retire early if you buy the product. Of course, at the end, the client is disappointed in what really occurs.

The whole key to the product is your belief that the JH block of business is going to perform at least as good as their "conservative assumptions" on claims and portfolio performance. If you believe that, then the product is the hands down industry winner on premiums.....if you do not believe it, then it is the scariest product you will even present if your client likes absolutes, as oppose to what-ifs. Then again, since no rates are ever guaranteed on any traditional plans....it is all what ifs I guess.

Product wise, it does start low cost...and they will show an illustration where the premium goes to the stratosphere if no credits are applied. However, they will also illustrate how, with projected performance, the premium will reduce to ZERO by the time to get to be about 80....and, you can even wind up with excess funds that can be a death benefit if not used, as well as all sort of wonderful options with the excess funds. It is standard UL illlustration of "guaranteed" and "projected/current". You either believe it or you don't.

Product wise....still no spousal discount......no informal care, and likely still agency HHC only....first time I have seen no waiver of premium when you go on claim(they claim no one ever cares about paying premiums).

Else...it IS NOT 3% step like Trans.....not even close. Straticision should not be showing it that way. It is 3% compound with unknown premiums in the future....no way to determine what you will pay when. Trans guarantees 3% increase in premium.....other than approved rate hikes n top.

It is true the premiums technically increase every year, but with "performance credits", the premium will hopefully remain the same and eventually go down. So, comparing it to Trans is not really appropriate in my opinion. Straticision is not capable of properly illustrating what the product is projected to do with premiums...you have to download the new JH illustration software that shows all the new columns of projected versus worse case.

Personally, if you are 60+, the MOO 3+%X20 year option is potentially on par price wise with JH....and maybe less risky on rate hikes. If you can add the spousal discount for an individual, JH does not look low cost provider. Informal care option at 40% with MOO seems to be a nice feature for many.....JH has none....and still won't even let you use an independent....agency only as I recall. Just seems hard to get past the JH track record of rate hikes.

The general question I have for the industry is that, if the carriers have all recently adjusted their rates for the lowest interest rate economy this country has ever seen...how likely is it that the plans being sold today will experience any of the type of rate hikes we have seen in the past. They all blame their troubles on the old blocks of business......so do they feel the new blocks will do well as priced, or only if they continually jack up the rates on all blocks, but in smaller increments.


Else, like anything new, I will learn more as I go along. Happy to discuss, and really anxious to hear other opinions.

 

[scagnt83]

A little too soon for any final opinions on the product, but my first reaction was that it was like the sales pitch where the agent illustrates the EIUL product at 8.5% interest and promises that you would be able to retire early if you buy the product. Of course, at the end, the client is disappointed in what really occurs.

........................

Product wise, it does start low cost...and they will show an illustration where the premium goes to the stratosphere if no credits are applied. However, they will also illustrate how, with projected performance, the premium will reduce to ZERO by the time to get to be about 80....and, you can even wind up with excess funds that can be a death benefit if not used, as well as all sort of wonderful options with the excess funds. It is standard UL illlustration of "guaranteed" and "projected/current". You either believe it or you don't.

I get the analogy.

But to me there is a big risk with the JH product vs. how a UL should be designed/sold.

On a traditional UL, the Guaranteed Column should extend the policy well into the early-mid 90s, or at least the late 80s.
On an IUL the Midpoint should be no more than 5%-5.5% (which is the lowest historical return for most products); and should extend the product to age 100 or at least very close to it.

In other words, a properly designed UL/IUL should provide an extreme amount of security that higher premiums are not needed.

JH is just saying "trust us" and is not providing any type of statistics or contractual guarantees to back up these "conservative assumptions".

If I make a conservative assumption on an IUL (which would be 6% current), I have 100 years of market history to back that assumption up.
If I do the same with UL, I have contractual guarantees that secure that premium until a certain age.

After all of the incorrect assumptions, who actually trusts JH's LTCI actuaries?
It sounds like a way to lowball premiums on the front end and then have an "I warned you this could happen" excuse on the back end.

It would scare the hell out of me to sell this product.

 

[Arthur Rudnick]

What ever happened to:

KEEP IT SIMPLE?

 

[ltcadviser]

I personally do not like the design at all. I showed it to a physician client last week to compare with Mass Mutual and Mutual of omaha. He immediately rejected it. When clients main concern with traditional LTC are rate increases how is designing a policy with these scheduled increases going to fly? They are enormous. And no one will want to trust an insurance company to apply non guaranteed credits----well maybe Northwestern Mutual but I digress....

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originally posted by ltcadviser



No Jack,
To date I've only written 3% or 5% compound built in.
Am I missing something?

I do not think so.

 

[yankee466]

I get the analogy.

But to me there is a big risk with the JH product vs. how a UL should be designed/sold.

On a traditional UL, the Guaranteed Column should extend the policy well into the early-mid 90s, or at least the late 80s.
On an IUL the Midpoint should be no more than 5%-5.5% (which is the lowest historical return for most products); and should extend the product to age 100 or at least very close to it.

In other words, a properly designed UL/IUL should provide an extreme amount of security that higher premiums are not needed.

JH is just saying "trust us" and is not providing any type of statistics or contractual guarantees to back up these "conservative assumptions".

If I make a conservative assumption on an IUL (which would be 6% current), I have 100 years of market history to back that assumption up.
If I do the same with UL, I have contractual guarantees that secure that premium until a certain age.

After all of the incorrect assumptions, who actually trusts JH's LTCI actuaries?
It sounds like a way to lowball premiums on the front end and then have an "I warned you this could happen" excuse on the back end.

It would scare the hell out of me to sell this product.

I believe JH will use 6% as their projection for portfolio performance to illustrate premium reducing to zero by age 80....plus claims performance.,

 

[scagnt83]

I believe JH will use 6% as their projection for portfolio performance to illustrate premium reducing to zero by age 80....plus claims performance.,

6%??!!! What a load of horse sh%t. Right now their "Accumulation UL" has a 4.5% Current Interest Rate... and we all know that LI is MUCH more profitable than LTCI for the carrier... How they can say that with a straight face I have no ******* clue.

And claims performance?? We all know how that has gone over the past 10 years!