Interest in life combo products spikes

[Allen Trent]

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!!!

Terrible for a product needing & wanting LTC type protection. I honestly hate all those no lapse for shorter than 100/120. It is really just a level term.

Is there a chance the client can bump the premium to get a longer no lapse guarantee.

 

[yankee466]

Terrible for a product needing & wanting LTC type protection. I honestly hate all those no lapse for shorter than 100/120. It is really just a level term.

Is there a chance the client can bump the premium to get a longer no lapse guarantee.

I educated them on what they bought.....the rest is up to them and their "friend"

Its a UL...so by definition you can adjust the premium. I am just not an IUL fan, and the often inflated promises that they show.

 

[Allen Trent]

I educated them on what they bought.....the rest is up to them and their "friend"

Its a UL...so by definition you can adjust the premium. I am just not an IUL fan, and the often inflated promises that they show.

No, not all no lapse products can have more premium paid to extend the guarantee. Some have the more limited no lapse like age 85 as max while others do have age 120. Way to sneaky, have literally seen agents replace no lapse to age 120 with no lapse to 85 saying "why pay the extra when unlikely to ever need it". Same was said in the 80s on UL when sold to only fund to age 65 cause why would you need it after. We know how that has turned out for most

 

[ltcadviser]

Terrible for a product needing & wanting LTC type protection. I honestly hate all those no lapse for shorter than 100/120. It is really just a level term.

Is there a chance the client can bump the premium to get a longer no lapse guarantee.

Welcome to the murky John Hancock marketing waters.

 

[scagnt83]

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.

......

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.

The main issue in the comparison is not just the Level DB vs. increasing Benefit Pool. But also the gigantic difference in CV & DB. One option puts your $100k premium to sleep for life. The other option lets you make a 2%-5% gain on your $100k. One option gives you return of premium at death. The other gives you 2x premium or more at death. Big differences there in the overall financial picture of a client.

Traditional LTC sales agents have a habit of looking mainly just at the LTC benefit. But clients are looking at the whole picture... which LTC sales agents are finding out now that hybrids are the main option left in the market. (many LTC specialists shunned hybrids at first until the market forced them into the product)

I will not argue that a true Hybrid LTC is better for just LTC protection. For those over the age of 65, its often the better fit if UW allows. But the advantages of the Life Policy w/ Rider resonate with clients.

Now it does cost more to get the same amount of LTC coverage.... but for someone with serious assets, thats often not an issue if the funds are actually earning interest.

And to get technical here for a second, most Hybrids are nothing but a UL Policy with a Long Term Care Rider as a standard part of the Base Contract. At their core, they are essentially the same thing, just different flavors.

There is also a growing niche that the Life w/ Rider fits imo: people who want a DB but dont need a DB. People who want to leave a little something to their kids, but want even more to not burden them with LTC expenses. Life Policy w/ Rider does exactly that. If they dont have a major need to care, their kids get a nice size death benefit. If they do need care, the kids will not be burdened (or not as much).

Its all about the clients priorities really once each product is fully understood. But the life / rider side takes a lot more to fully understand. The variance in the riders, much less the underlying life policy, make it a complicated market.

 

[kpbdy99]

Traditional LTC sales agents have a habit of looking mainly just at the LTC benefit. But clients are looking at the whole picture... which LTC sales agents are finding out now that hybrids are the main option left in the market. (many LTC specialists shunned hybrids at first until the market forced them into the product)

Um, sorry, no. When I - as a traditional LTC nerd - talk with potential clients I don't go in pushing any product, I look at their overall financial & family circumstances, goals, experience, health, etc., and make a recommendation based on all of those things. Sometimes it's traditional LTC, sometimes it's a hybrid, sometimes it's a hybrid for the wife and traditional for the husband. When it's appropriate, I'll educate my clients on both options, and let them decide which is best for them. When you throw in the Partnership, and the costs, and shared care, etc., about 75% of my clients - most of whom are not hugely wealthy but have anywhere from $400K to $1.5M in investable assets - choose traditional. I guess I should also note that the vast majority of my clients come to me on referral from their fee-only planners or an attorney, specifically to tackle the LTC need.

 

[scagnt83]

Um, sorry, no. When I - as a traditional LTC nerd - talk with potential clients I don't go in pushing any product, I look at their overall financial & family circumstances, goals, experience, health, etc., and make a recommendation based on all of those things. Sometimes it's traditional LTC, sometimes it's a hybrid, sometimes it's a hybrid for the wife and traditional for the husband. When it's appropriate, I'll educate my clients on both options, and let them decide which is best for them. When you throw in the Partnership, and the costs, and shared care, etc., about 75% of my clients - most of whom are not hugely wealthy but have anywhere from $400K to $1.5M in investable assets - choose traditional. I guess I should also note that the vast majority of my clients come to me on referral from their fee-only planners or an attorney, specifically to tackle the LTC need.

Yet in your comparison of the products, you left out 2 of the main benefit the Life Policy w/ Rider provides....

I never said you or any other agent go in pitching a specific product. I said traditional LTC agents are looking at the comparison of the two products through a LTC lens and not through a total financial picture lens. The benefits of a life policy w/ Rider incorporates the larger financial picture into consideration.

The advisors who send you LTC referrals dont know what the LIfe Policy w/ Rider can provide. However, they are likely not looking to learn either and just want the most LTC benefit per premium dollar. So I can understand why your business falls the way it does. But I was speaking to the comparison of the two products, not your use of either one.