How Do We Fix Private LTCi?
- Thread starter Arthur Rudnick
- Start date
- 570
Interesting article. I think it would be nice if people were able to get a tax deduction for buying LTCI. It would take some stress off the Medicaid system. That's about as far as I'd like to see the government get involved though.
I'm new to the LTCI market and so far, the biggest concern I see from clients and what I think about is rate stability. For those of you who have been around the block, how do you handle that concern? Are you using 10 pay and such, or what makes it work?
I'm new to the LTCI market and so far, the biggest concern I see from clients and what I think about is rate stability. For those of you who have been around the block, how do you handle that concern? Are you using 10 pay and such, or what makes it work?
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- #3
Arthur Rudnick
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previously posted by NWBenefitProvider
You're pretty much on target.
Rate increases (on new & existing policyholders) have become the normal landscape in the industry.
The only way to handle it, is to acknowledge it's existence and move onward.
It is what it is. This product is no longer for the lower-to-middle class, it for the upper middle class and premiums have to be affordable.
Due to the high annual premium, 10-pays have become unaffordable for most individual applicants.
You may have more luck with them for executive carve-outs, where the business is paying the premiums.
Very few lifetime benefits, 5% compound inflation riders or 30-day elimination periods are being sold. Today it's 3 & 5 year benefit periods, 3% compound or 5% Simple inflation riders and 90-day elimination periods.
You're pretty much on target.
Rate increases (on new & existing policyholders) have become the normal landscape in the industry.
The only way to handle it, is to acknowledge it's existence and move onward.
It is what it is. This product is no longer for the lower-to-middle class, it for the upper middle class and premiums have to be affordable.
Due to the high annual premium, 10-pays have become unaffordable for most individual applicants.
You may have more luck with them for executive carve-outs, where the business is paying the premiums.
Very few lifetime benefits, 5% compound inflation riders or 30-day elimination periods are being sold. Today it's 3 & 5 year benefit periods, 3% compound or 5% Simple inflation riders and 90-day elimination periods.
- 2,584
Change partnership policies (familiar with CA). One idea is lowering mandatory minimum daily benefits and mandatory compound inflation protection. I feel having some protection rather than none would help Medicaid/Medi-Cal system.
What is there to fix?.......maybe you just need to educate people about the subject. I think it would be nice if the average American knew that LTC existed and how it worked before they got too old and sick to buy it. Maybe a commercial on the subject during the final episode of the Batchelor or Dancing with the Stars might introduce some people to reality. They all seem to be able to buy the latest iphone and a new car, but have no money for protecting their retirement.
What is there to fix?.......maybe you just need to educate people about the subject. I think it would be nice if the average American knew that LTC existed and how it worked before they got too old and sick to buy it. Maybe a commercial on the subject during the final episode of the Batchelor or Dancing with the Stars might introduce some people to reality. They all seem to be able to buy the latest iphone and a new car, but have no money for protecting their retirement.
I have not been here for a while, but I have been reading other financial forums. People do ask about long term care insurance. However, the reality is that people feel it's expensive, it's a big gamble if they need it, and the rates keep climbing and they have a fear that they have paid all those years in premiums and then have to drop the insurance because they can no longer afford them. Buying the latest cell phone is a one time purchase for a that a consumer will utilize right away, but buying long term care is a lifetime commitment that may never be used. There is no comparison. Those who can afford it feel they should just self insure and keep the premiums invested in their account and pay if they need LTC. The average person cannot afford it and is too preoccupied to spend time thinking on it when they are trying to survive.
Believe it or not, I have heard from a few that have said it wasn't recommended by their financial advisors, and that it was a rip off.
I don't think the financial advisors are trained in ltc unlike agents and brokers.
This provides the hugest disservice because the ones that have assets to conserve are the ones with the advisors recommending not to get it.
Arthur, what's your opinion on Mass' Ltci?
I don't think the financial advisors are trained in ltc unlike agents and brokers.
This provides the hugest disservice because the ones that have assets to conserve are the ones with the advisors recommending not to get it.
Arthur, what's your opinion on Mass' Ltci?
- 10,806
Here is an article I read this morning. It is by one of my least favorite financial publications, plus it is written by one of my least favorite financial journalists...
If you look at the bottom of the article it gives by far the worst LTCI advice I have ever read!!
Why Don't Retirees Buy Annuities? They Get Something Most Economists Don't - Forbes
Not only does it cite rate increases as a reason not to buy. But it suggests an annuity that is set to start paying at age 80 in place of LTCI
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I have seen FAs who support LTCI. But it usually just depends on their background imo. There are plenty who know next to nothing about it.
Imo Mass has a great LTCI product. And is becoming more competitive as others raise rates.
If you look at the bottom of the article it gives by far the worst LTCI advice I have ever read!!
Why Don't Retirees Buy Annuities? They Get Something Most Economists Don't - Forbes
Not only does it cite rate increases as a reason not to buy. But it suggests an annuity that is set to start paying at age 80 in place of LTCI
----------
I have seen FAs who support LTCI. But it usually just depends on their background imo. There are plenty who know next to nothing about it.
Imo Mass has a great LTCI product. And is becoming more competitive as others raise rates.
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I think that a majority do support it (not that they know much about it) but since it's not a priority (in their eyes), it often gets presented without the same sense of urgency/importance as an investment account or even life insurance.
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- #10
Arthur Rudnick
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previously posted by csalter
The people who you're describing are not candidates for LTCi. Premiums must be affordable now and in the future.
The concept of your statement about putting money aside each year instead of paying premiums doesn't make sense. Let's say a person decides not to buy a policy and instead puts away $4,000 every year. What happens if 2 years later this person has a stroke or other LTC event where he/she requires care for an extended period? Tell me what $8,000 is going to do? In NY, $8,000 will pay for 3 weeks in a nursing home.
previously posted by emptyeternity
In NY, it's way overpriced for a "good" not great policy.
The people who you're describing are not candidates for LTCi. Premiums must be affordable now and in the future.
The concept of your statement about putting money aside each year instead of paying premiums doesn't make sense. Let's say a person decides not to buy a policy and instead puts away $4,000 every year. What happens if 2 years later this person has a stroke or other LTC event where he/she requires care for an extended period? Tell me what $8,000 is going to do? In NY, $8,000 will pay for 3 weeks in a nursing home.
previously posted by emptyeternity
In NY, it's way overpriced for a "good" not great policy.
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