Life Companies Going Back to Life Insurance Only?

[scagnt83]

I was going to post this on a thread in the LTC forum, but since that thread has been mutilated, and any sign of a logical debate is void from it now; I will post this here.


I predict that if Obamacare stays in its current form with the current wording and definitions we will see a huge shift among LI companies to get back to just doing LI.

Why is this? Because technically DI and LTC are forms of health insurance and can be classified as "health insurance" according to the IRS/DOI and other government agencies.

So this means that if a company features DI or LTC they could be subject to the new laws passed.


I never would have thought this would be an issue.
But recently I spoke to an exec at Cinci Life who informed me that they will soon be discontinuing their DI (both group and indv) because they do not want any product that might classify them as a health insurance company.

He said that their lawyers have gone over this for a long while, they even consulted with other companies to share opinions.
It seems that the general consensus was "better safe than sorry".


I have a feeling that our industry will become much more segmented, and we will not see many companies being "jacks of all trades".

Only time will tell though..

 

[Larry Tew]

Interesting. Companies like Guardian are deeply entrenched in the Health side and I don't see them changing. I have done some DI through Ohio National (not as strong as Guardian but not priced like Guardian either). I haven't seen a change in them yet.

 

[bluemarlin08]

You might be right. The LTCi business is truly a mess. What do you tell clients about how much future rate increases are possible, you certainly can't believe anything the companies tell you. Is it going to come to the point that you ask for different types of illustrations showing various lapse rates and interest earnings to try and get an idea of the what ifs.

 

[VolAgent]

It certainly is a possibility, but I doubt it.

I'm sure what prompted these thoughts is MetLife leaving LTCi. However, DI, and group dental and vision are huge for them. I can't see them leaving these fields.

Never say never, but I also don't see public opinion going after carriers about DI and LTCi the same way they go after carriers over health insurance. For better or worse, people are starting to see health insurance as a right. Most people don't give DI a second thought. A major company failing to offer group DI is not a big event. A major company failing to offer health insurance gets noticed.

On a side note, I had to call MetLife today about a LTCi policy. I then asked about them stopping new sales. She then needed my full name, apparently they have to fill out a sheet every time someone asks about Met dropping the product.

 

[Bob_The_Insurance_Guy]

Things must be different down here in Georgia. I have seen the opposite happen. I have been to four CE classes and meetings where the company sponsoring the meeting was talking about their New Blended LI (LTC benes).

 

[Mark]

Things must be different down here in Georgia. I have seen the opposite happen. I have been to four CE classes and meetings where the company sponsoring the meeting was talking about their New Blended LI (LTC benes).

Me too.....

Georgia is just a great place to live....

 

[VolAgent]

Things must be different down here in Georgia. I have seen the opposite happen. I have been to four CE classes and meetings where the company sponsoring the meeting was talking about their New Blended LI (LTC benes).

That is a life product, not a health product.

 

[souldeux]

That is a life product, not a health product.

Exactly - linked benefit plans are giving insurers a way to stay in the LTC market without being subject to the health insurance magnifying glass. Building LTC plans on a life insurance chassis is going to keep getting more and more popular.

 

[VolAgent]

Exactly - linked benefit plans are giving insurers a way to stay in the LTC market without being subject to the health insurance magnifying glass. Building LTC plans on a life insurance chassis is going to keep getting more and more popular.

Don't forget annuity based platforms too.

 

[Guest]

The GOP won the Senate and will most likely win the house in 2012 when it's seats are up for grabs. This means that Obamacare will cease to exist as we know it.
- - - - - - - - - - - - - - - - - -
I live in GA too and met with our new insurance commissioner at church. He passed a law in the GA senate that he proposed that makes it illegal to be forced to have health insurance in GA. Hallelujah y'all!