Interest in life combo products spikes

[Allen Trent]

Nationwide seems to be a "go to" both because of their pricing and the structure of their rider.

Heard Nationwide is one of few that offers ADB CIA on their 2nd to die

 

[scagnt83]

Who are the GUL and Term combo players in the middle family market?

GrassyAss in advance

Ameritas has Chronic with no permanent requirement on their Term and WL. The WL can compete with most any GUL. No extra charge for the Rider, only available down to T4. 50% of DB for Chronic, 25% for Critical, 90% for Terminal.

Forgot to mention Guardian WL and Mass WL. Guardian has a lower priced option than Mass does. Guardian also offers a SWL w/ LTC Rider.

 

[kpbdy99]

When I first started selling these policies, I thought they were great, but once I realized just how much the other purported benefits were being reduced, when used, I dropped them like like a pair of handcuffs.

If somebody wants an LTC or a DI policy, that's what they're going to get from me. I'll leave the combo products to the Car Salesmen of the life insurance world.

I think it's really important to distinguish between REAL LTC hybrids - those with TQ LTC riders - and the CI/AB riders. Huge difference. A lot of agents are selling teh CI/AB riders and presenting them AS LTC riders. That's a problem. The REAL LTC hybrids are excellent products, the CI/AB riders are a swamp. I've used them, but ONLY when medical underwriting forces me into one to get some kind of solution for LTC expenses.

 

[Allen Trent]

I think it's really important to distinguish between REAL LTC hybrids - those with TQ LTC riders - and the CI/AB riders. Huge difference. A lot of agents are selling teh CI/AB riders and presenting them AS LTC riders. That's a problem. The REAL LTC hybrids are excellent products, the CI/AB riders are a swamp. I've used them, but ONLY when medical underwriting forces me into one to get some kind of solution for LTC expenses.

See that alot too. Gut tells me the true LTC extension is better than ADB CIA. However, then when I actually see the illustration & definition of the products, sometimes I think the ADB CIA is better in the majority of actual average stay of needing care.

IE. Securecare from Minnesota Life or the 2%/ 4% ADB CIA on their no lapse protection IUL. The Secure care requires you to empty your own death benefit first before getting access to the LTC extension bucket of Money. Plus, the monthly check available for claim is much lower compared to 4% of face on the ADB CIA. Lastly, if not used at all, the no lapse IUL had a better face amount.

Last one I saw seemed to look like a claim period of less than 4 years was better from ADB CIA. Stays longer than that were better on true LTC extension of benefit, but client would have more out of pocket each month for the shorter claim needs of 2 yrs or less.

I get that the extension of benefit could provide a slightly higher total claim payout for those with much longer than average need, but it seemed to come at a price of getting less money each month in the 2-4 year range.

The extension bucket of money will never even come into play for most people that don't require care for more than 3 years & then the extension bucket of money is still spread over another 3-4 years. From stats, aren't an extremely small number of care needs more than 4 years? At that point, why not just go with stand alone LTC, not a hybrid?

Am I understanding this correctly or am i missing something in the definition of the claim that differs between the product versionsh. Thanks for any corrections to my understanding

 

[bill3173]

The REAL LTC hybrids are excellent products, the CI/AB riders are a swamp. I've used them, but ONLY when medical underwriting forces me into one to get some kind of solution for LTC expenses.

Yes, that's really what I was referring to, the life products with the Cr/Ci riders. I had a case recently where the guy didn't realize he had exhausted his benefits, and had very little life insurance left and due to his health will never qualify for life or ltc again.

He had no idea, the policy was sold to him as a life with ltc..not true.

 

[kpbdy99]

See that alot too. Gut tells me the true LTC extension is better than ADB CIA. However, then when I actually see the illustration & definition of the products, sometimes I think the ADB CIA is better in the majority of actual average stay of needing care.

IE. Securecare from Minnesota Life or the 2%/ 4% ADB CIA on their no lapse protection IUL. The Secure care requires you to empty your own death benefit first before getting access to the LTC extension bucket of Money. Plus, the monthly check available for claim is much lower compared to 4% of face on the ADB CIA. Lastly, if not used at all, the no lapse IUL had a better face amount.

Last one I saw seemed to look like a claim period of less than 4 years was better from ADB CIA. Stays longer than that were better on true LTC extension of benefit, but client would have more out of pocket each month for the shorter claim needs of 2 yrs or less.

I get that the extension of benefit could provide a slightly higher total claim payout for those with much longer than average need, but it seemed to come at a price of getting less money each month in the 2-4 year range.

The extension bucket of money will never even come into play for most people that don't require care for more than 3 years & then the extension bucket of money is still spread over another 3-4 years. From stats, aren't an extremely small number of care needs more than 4 years? At that point, why not just go with stand alone LTC, not a hybrid?

Am I understanding this correctly or am i missing something in the definition of the claim that differs between the product versionsh. Thanks for any corrections to my understanding

I guess it really depends upon your focus. Are you selling life insurance, and bringing LTC into the discussion, or looking for true LTC protection, and using life insurance to get there? I confess, first of all, that I'm an LTC nerd, not a life insurance agent. IULs scare me. But, just for the hell of it, I went and ran a Securian Eclipse Protector II IUL with a $200K, level DB and a 4% LTC rider, 55-year old male, non-tobacco rates. Annual premium, $3,845. IF this guy triggers the CI benefit next year, he can draw $8K per month. In 30 years, when he's 85, he can draw $8K per month. Every penny paid for LTC reduces the DB, just like with a true hybrid. (maybe you can run that IUL with an increasing DB, but I couldn't figure out how.)

Same client, with Nationwide CareMatters II, same premium, payable to age 100, starts with $2,551 per month for LTC and $91,842 in his benefit pool. But at 85, he has $11,026 per month, and a benefit pool of $417K. If he dies at 85, without ever using LTC, the DB is $119K. So, I suppose if this guy goes on LTC claim early, the IUL wins in the sense that the monthly amount is higher, but at age 79, the monthly benefit on the hybrid surpasses that on the CI rider, and at 71 the benefit pool surpasses the $200K on the IUL.

So, the true LTC hybrid sucks as life insurance, on that I think we can agree. But from the standpoint of an LTC nerd, the true hybrid works better for real LTC protection. If my client has no NEED for a big DB (which will be reduced by the LTC benefits paid by either product, anyway) then my focus is on the best LTC protection in the time frame when the claim is most likely.

 

[Allen Trent]

I guess it really depends upon your focus. Are you selling life insurance, and bringing LTC into the discussion, or looking for true LTC protection, and using life insurance to get there? I confess, first of all, that I'm an LTC nerd, not a life insurance agent. IULs scare me. But, just for the hell of it, I went and ran a Securian Eclipse Protector II IUL with a $200K, level DB and a 4% LTC rider, 55-year old male, non-tobacco rates. Annual premium, $3,845. IF this guy triggers the CI benefit next year, he can draw $8K per month. In 30 years, when he's 85, he can draw $8K per month. Every penny paid for LTC reduces the DB, just like with a true hybrid. (maybe you can run that IUL with an increasing DB, but I couldn't figure out how.)

Same client, with Nationwide CareMatters II, same premium, payable to age 100, starts with $2,551 per month for LTC and $91,842 in his benefit pool. But at 85, he has $11,026 per month, and a benefit pool of $417K. If he dies at 85, without ever using LTC, the DB is $119K. So, I suppose if this guy goes on LTC claim early, the IUL wins in the sense that the monthly amount is higher, but at age 79, the monthly benefit on the hybrid surpasses that on the CI rider, and at 71 the benefit pool surpasses the $200K on the IUL.

So, the true LTC hybrid sucks as life insurance, on that I think we can agree. But from the standpoint of an LTC nerd, the true hybrid works better for real LTC protection. If my client has no NEED for a big DB (which will be reduced by the LTC benefits paid by either product, anyway) then my focus is on the best LTC protection in the time frame when the claim is most likely.

Great stuff. BTW, making am IUL an increasing death benefit won't impact as the ADB CIA is chosen at issue as a fixed amount as you may be choosing the rider to be less than 100% of life face amount. Plus, every claim distribution for ADB CIA decreases both the face amount & CV anyway.

I assume you have the inflation option on that Nationwide illustration. I don't recall if I ran that before on the Securecare I originally looked. When I lookedd at 58 year old female on 100k face, Securecare premium was $3325 a year for the base life, $1225 for Acceleration LTC & $900 for extension of benefit for total prem per year of $5400 & only locked in $4167 monthly claim amount for 6 years regardless of when they go on claim.

Protector IUL 300k face & 300k ADB CIA 4% is $5338 a yr. So, client could take $0 to $12k per month on claim. But for comparison to match Securecare of $4167 month, $300k would last exact same 72 months. Plus, it would give the flexibility of taking more & has way more options to pre pay to satisfy the no lapse guarantee or drop lump sums in rather than paying the fixed amount you chose at issue with Securecare

Maybe this is a bad example & true hybrids like Nationwide are superior. I just haven't dug in enough & can't get my mind around the example above. My gut tells me the true TQ hybrid is better because it is more of a true LTC

Thank you for all the info you gave

 

[yankee466]

I recently spoke with a client who dropped his wife's traditional LTC policy and said he bought a life policy with LTC benefits...as did not want the premiums to be spent for nothing.. When he told me what he was paying for the $300K policy, it sounded too cheap to me, so I asked him to find his policy and let me know what he bought...as he no idea off hand, but it was sold to him by a "friend".

A few weeks later, when he had Mutual of Omaha send hom a copy of his policy...since he could not even find what he bought....it turned out to be an IUL that was only guaranteed to age 85, with free accelerated terminal and chronic illness riders.. The MoO product literature says since most people die before age 85, that it made sense to not provide longer guarantees, or it would be too expensive. The true LTC rider was not even added to the policy, just some convoluted language that says a lump sun percentage of the death benfit would be paid early if some criteria was met.

Anyway, the client had no idea that the policy could easily run out of gas at age 85. The traditonal LTC policy they dropped was about half the annual premium of the Mutual IUL....and at age 85 would have provided as much or more LTC benefit...and of course if she did not need care until age 93,would still be there. Of course the IUL was illustrated with 6% growth every year to hopefully keep it going.

Anyway, not sure if the agent that sold it to them is still a friend. Guess its better than nothing

 

[Allen Trent]

I recently spoke with a client who dropped his wife's traditional LTC policy and said he bought a life policy with LTC benefits...as did not want the premiums to be spent for nothing.. When he told me what he was paying for the $300K policy, it sounded too cheap to me, so I asked him to find his policy and let me know what he bought...as he no idea off hand, but it was sold to him by a "friend".

A few weeks later, when he had Mutual of Omaha send hom a copy of his policy...since he could not even find what he bought....it turned out to be an IUL that was only guaranteed to age 85, with free accelerated terminal and chronic illness riders.. The MoO product literature says since most people die before age 85, that it made sense to not provide longer guarantees, or it would be too expensive. The true LTC rider was not even added to the policy, just some convoluted language that says a lump sun percentage of the death benfit would be paid early if some criteria was met.

Anyway, the client had no idea that the policy could easily run out of gas at age 85. The traditonal LTC policy they dropped was about half the annual premium of the Mutual IUL....and at age 85 would have provided as much or more LTC benefit...and of course if she did not need care until age 93,would still be there. Of course the IUL was illustrated with 6% growth every year to hopefully keep it going.

Anyway, not sure if the agent that sold it to them is still a friend. Guess its better than nothing

Wow, that is disgusting & potentially against the law if it didn't follow the replacement laws in the state. Most of those free accelerated riders only allow a couple of claim submissions, not monthly & several don't even state what the cost will be to obtain the acceleration. $50k claim may reduce face by $55k or $60k, but not spelled out in the rider, so carrier can charge what they want.

If she has her policy, the application should be in back if the policy & might show whether intended to be replacement

Why didn't agent just sell a new no lapse UL or IUL for the difference in premium & keep the LTC active.

My money is on agent ignorance & maybe an upline that only cares about sales no matter the cost, etc

 

[yankee466]

Wow, that is disgusting & potentially against the law if it didn't follow the replacement laws in the state. Most of those free accelerated riders only allow a couple of claim submissions, not monthly & several don't even state what the cost will be to obtain the acceleration. $50k claim may reduce face by $55k or $60k, but not spelled out in the rider, so carrier can charge what they want.

If she has her policy, the application should be in back if the policy & might show whether intended to be replacement

Why didn't agent just sell a new no lapse UL or IUL for the difference in premium & keep the LTC active.

My money is on agent ignorance & maybe an upline that only cares about sales no matter the cost, etc

The client obviously did not know what they were getting.....and it was a trusted "friend" as the agent. They likely would not have paid the higher premium it was guaranteed to age 95+. I am wondering how Mutuial of Omaha packages the product with the "most people die before 85...so this makes sense" approach.

Here is the paragraph out of their Life Protection Advantage IUL brochuire:

When clients are looking for death benefit protection, they
want a policy that can last a lifetime. But, a fully-guaranteed
policy can be expensive. With Life Protection Advantage,
when the client pays the long-term no-lapse protection
premium, they receive a meaningful guarantee period at a
competitive price.
For most clients who are age 60 and under at issue and are
of average health, the no-lapse protection period will last up
to – or even beyond – their life expectancy. (Source: Social
Security Administration, Estimates from the 2016 Trustees
Report.)

Sad, but it happens....and only the good die young!!!