Home Health Care Friendly LTC

[Mr_Ed]

I think a $50/day benefit is about as useful as a $3K life insurance benefit. Sure, it's money, but not even close to what is necessary.

Here's a scenario as to why I might recommend $50.

Client has $50K saved for LTC and is 70. He puts it into a Moneyguard policy which pays up to $2,474 per month or about $82 per day. By purchasing a small (and affordable) LTC policy for $50 he now has just about enough for HHC.

I have 1st hand experience with someone who had a stroke at 68. Only took about 2 years to run through both the equity in a condo and the balance in an IRA. $200K down the drain. A $50 a day benefit would have saved my mother $36K over two years. Not enough to really matter.

Just because someone thinks a spouse can handle things, that may not be the case. Can a 125 lb woman help her 220 lb. husband into and out of a shower when he can't walk? How about helping him wipe himself?

The reason for LTC is so that the spouse (or kid, etc) can supervise care, not provide it. I take care of my mother but fortunately we have someone that comes in 3 times a week. This help does not cost $50.

Hope that puts a bit of perspective on $50. benefit.

Rick

Well stated, Rick. I couldn't have said it better.
(except for the MG part... I don't like those combo products. But everything else you said is right on.)
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Here is what I found from today's surfing:

A++ rated LTCi carriers -

Berkshire Life (Actually Guardian... who is leaving this year)
Mass Mutual
New York Life
Northwestern Mutual
State Farm

A+ rated -

John Hancock
MetLife (yes, I know they recently bowed out)
Mutual of Omaha
Prudential

A rated -

American General
Genworth (formerly GE... and whose stock has been as low as $1 in the not too distant past... amazing they are rated this high)
TransAmerica

A- rated -
AFLAC --- but maybe not tomorrow!
Assurity (yes, they are out, too)
LifeSecure
Unum

B++ rated -

MedAmerica
Bankers Life (whose parent company, Conseco, (or should I say CNO Financial) has been through bankruptcy recently.

I note that MedAmerica keeps company with the lower rated Bankers and not with the big dogs. This is a major concern for me. As noted, LTC is a need that is expected to require long term financial viability. Other health insurance can be replaced annually or less... in most cases without much difficulty. Med Supps, for example, will often waive pre-ex if the client was previously covered on a carrier that left the market.

Retread,

Transamerica is rated A+, not "A", by AM Best.

Stock price is irrelevant.

The stock price is not based on the profitability or financial stability of an insurance company. Insurance companies do not sell shares of stock.

The stock price is the value of the holding company which owns SEVERAL insurance companies.

That is why the stock price does not reflect any particular insurance company.

Retread, please re-read the thread which got me into this forum:

Is Genworth LTCi Block At Risk?

 

[VolAgent]

Feelings have nothing to do with it. I needed more wood for the fire. Art provided some, and so did Rick. Yes, I can see that $50 is pitiful... I just needed to know if there was a market for this plan at all. It would seem someone might be able to supply an argument for it, or why else is it offered?

Well... I think the case needs to rest. I concede that I see no compelling reason to offer such a low benefit as $50/day.

My thanks to everyone who contributed... including you, Bill.

Insurance companies do many things for many reasons. There may be someone out there selling $50/day benefits who doesn't understand the implications. The state may require a plan design with such a low benefit. There are just too many perfectly valid reasons to offer it. But just because they offer it doesn't mean you have to sell it.

Insurance companies are in the business of manufactoring policies. Sometimes you need an el cheapo product to attract attention to your other products.

 

[yankee466]

At the risk of stirring the pot, if my 94 year old mom had a LTC plan that ONLY paid $50/day, her Social Security check + pension check+ plus renting her home would cover the balance of her assisted living bill every month. Then I would not be dipping into her savings to make up the difference. Not knowing how long she is going to continue to need care, or if she will need more extensive care, the extra $1500/month would be VERY helpful right about now. She does not mind spending her income...as it goes away when she dies anyway.

Have I ever sold or even shown anyone a plan with $50/day benefit....NO. (unless maybe on a $100/day with 50% HHC) Would 80% of the people living in a LTC facility right now with no LTC insurance whatsoever like an extra $1500/month reimbursement when the average cost of assisted living in Georgia today is about $3000/month....... Likely.

People actually sign up for these small benefits on group plans all the time.....since for $12/month out of their pay check it seems like a good idea.....even they they likely have no idea what they are signing up for at open enrollment

Don't some people think the Class Act may pay as little as $50/day?

I maintain too that if so many advisors/agents didn't show people LTC plans that they can not afford, and then therefore they wind up with no plan at all, maybe more people would at least have some form of LTC to help as a supplement.

Now for people that Arthur sells to, $50/day will not go as far as people that I tend to sell here in the wilds of North Georgia and Tennessee.

??

 

[retread]

At the risk of stirring the pot, if my 94 year old mom had a LTC plan that ONLY paid $50/day, her Social Security check + pension check+ plus renting her home would cover the balance of her assisted living bill every month. Then I would not be dipping into her savings to make up the difference. Not knowing how long she is going to continue to need care, or if she will need more extensive care, the extra $1500/month would be VERY helpful right about now. She does not mind spending her income...as it goes away when she dies anyway.

Have I ever sold or even shown anyone a plan with $50/day benefit....NO. (unless maybe on a $100/day with 50% HHC) Would 80% of the people living in a LTC facility right now with no LTC insurance whatsoever like an extra $1500/month reimbursement when the average cost of assisted living in Georgia today is about $3000/month....... Likely.

People actually sign up for these small benefits on group plans all the time.....since for $12/month out of their pay check it seems like a good idea.....even they they likely have no idea what they are signing up for at open enrollment

Don't some people think the Class Act may pay as little as $50/day?

I maintain too that if so many advisors/agents didn't show people LTC plans that they can not afford, and then therefore they wind up with no plan at all, maybe more people would at least have some form of LTC to help as a supplement.

Now for people that Arthur sells to, $50/day will not go as far as people that I tend to sell here in the wilds of North Georgia and Tennessee.

??

Thank you. This was my thinking....

However, the light began to dawn that I needed to look for wealthier clients. I think persistency would be higher.

 

[yankee466]

Thank you. This was my thinking....

However, the light began to dawn that I needed to look for wealthier clients. I think persistency would be higher.

Else, you will have to do a lot of volume on the small policies to make a living.

 

[retread]

Else, you will have to do a lot of volume on the small policies to make a living.

Yes.

I had a heart to heart with my LTC experts yesterday, and that was the conclusion we also came to. I will keep this in mind, and expect to use it rarely.

Despite the putdown from some, I do see a $50/day benefit can be justified... it is just rare. I think the putdowns were an attempt to distance themselves from the effort to lead with this offer, which I never intended to do. People do tend to gravitate to polar extremes. But that is what makes the world to 'round... eh?

 

[Arthur Rudnick]

What's interesting is that CLASS Act is offering a $50/day benefit and every agent on the planet is complaining that $50/day is worthless.

I agreee. $50/day is worthless by itself. However, as stated previously by Rick, if it's in addition to some other LTC benefit, (in his case MoneyGuard) it may be enough.

In NY, the minimum daily benefit available is $100/day. And, if someone had a policy with $100/day in benefits, they could not purchase another policy for less than $100/day.

The reality is, we should be looking to sell a comprehensive LTC policy, covering every level of care. And, LTC-101 will teach you that the benefits sold should be based on the costs of care in the area where the policyholder will be receiving it. Subtract from the cost of care the amount that the policyholder can co-insure and there's your benefit.

If all someone can afford is a policy paying $50/day, they are probably not financially qualified to purchase any type of LTCi in the first pl;ace.

 

[Mr_Ed]

What's interesting is that CLASS Act is offering a $50/day benefit and every agent on the planet is complaining that $50/day is worthless.

I agreee. $50/day is worthless by itself. However, as stated previously by Rick, if it's in addition to some other LTC benefit, (in his case MoneyGuard) it may be enough.

In NY, the minimum daily benefit available is $100/day. And, if someone had a policy with $100/day in benefits, they could not purchase another policy for less than $100/day.

The reality is, we should be looking to sell a comprehensive LTC policy, covering every level of care. And, LTC-101 will teach you that the benefits sold should be based on the costs of care in the area where the policyholder will be receiving it. Subtract from the cost of care the amount that the policyholder can co-insure and there's your benefit.

If all someone can afford is a policy paying $50/day, they are probably not financially qualified to purchase any type of LTCi in the first pl;ace.

Well said, Arthur!


sao

 

[Arthur Rudnick]

Thank you, Mr. SAO............

 

[Mr_Ed]

sao's not such an s.o.b. after all