LTC Annuity

[yankee466]

Mutual of Omaha is dropping their LTC annuity (Living Care).....citing interest rate issues.

Never liked the product, so do not really care. Genworth's LTC annuity was a much better choice for its limited life span......but still not a fan of the concept. Seems like the Life/LTC combos offer more bang for the buck in general if you like those.

Guess that leaves State Life as far as some form of LTC annuity...other than the longevity insurance offerings with the "LTC" doublers, etc. Anyone pitching the deferred annuities from Phoenix, Secure Income, Aviva, etc for the uninsurables or the people looking for the extra lifetime pensions? Lots of steak dinners used to sell these for sure.

 

[ltcadviser]

Seems like the Life/LTC combos offer more bang for the buck in general if you like those.

Herman, I completely disagree. There are linked benefit annuities that offer significant more leverage than life/LTC combos.

 

[yankee466]

Good to hear. Maybe you can share with us who else is still in this space. I am not an annuity person. I never saw anyone besides GNW, MoO, and SL with a true LTC annuity? Not referring to EIA products.

Which annuity products offer more ltc benefits than MG or TLC?

 

[SWM]

I would also like to know what other carrier is offering linked ltc benefits on the annuity contracts. Thanks in advance for the info. I spent the last two days trying to find one that was not underwritten. I struck out based on age.

 

[scagnt83]

LFG has a LTC FA.

It currently gets 1% and is a 7 year product.
It has a double or triple leverage option for LTC benefits, plus optional inflation rider. It goes up to 6 years in benefits.

Ive attached a spec sheet.

 

[yankee466]

LFG has a LTC FA.

It currently gets 1% and is a 7 year product.
It has a double or triple leverage option for LTC benefits, plus optional inflation rider. It goes up to 6 years in benefits.

Ive attached a spec sheet.

I talked to LFG about the product......they recommended Money Guard instead as better for the client in general. Hence my original question.

 

[Arthur Rudnick]

There are no carriers selling Annuity/LTC contracts in NY, so I have to admit I'm not well versed on the product.

But, a few observations:
There are a number of issues that bother me. First of all, in today's interest rate enviorment, who would want to purchase an annuity that's paying 1%? Might as well put $100,000 under the matress and have 100% access at anytime.

Another issue, if someone throws a couple of hundred grand into this product and needs LTC services down the road, the first $200,000 that the company is paying in benefits are the policyholder's own money, not one dime of the company's money. Not sure that makes much sense.

One more issue: It appears that on this Lincoln product, they only pay 50% of the LTC benefit for home care. They pay 100% as a nursing home benefit. Who in their right mind would purchase a LTC policy and only see a benefit advantage by entering a nursing home?

Is there an inflation rider available to keep the LTC benefits increasing each year? Yes, the annuity goes up in value each year (1%) and therefore the LTC benefit goes up as well. But, for a 50 year old, 3% or 5% compound is really what's needed.

And, like all annuities, there is a 10% annual withdrawal allowance without a penalty. But, if money is withdrawn, the LTC benefit will decrease. And, there is a 7-year surrender charge, starting with 8% for the first 2 years.

I've never been a fan of Annuity & LTC hybrid products. Each product serves a different need. I would think if someone had a serious concern about ever needing LTC services, they would be much better off going out and purchasing a stand-alone LTC policy.

Am I missing anything?

 

[yankee466]

Jack says you are..........so we await his response.

He would know.

 

[ltcadviser]

Jack says you are..........so we await his response.

He would know.

I never said you are missing products. I was inferring your (Herman) math skills are lousy.

 

[scagnt83]

I talked to LFG about the product......they recommended Money Guard instead as better for the client in general. Hence my original question.

Idk, it just depends imo.

MoneyGuard is on a UL platform. So the reserve requirements are different, and very likely more favorable to the company (idk for sure, just an educated guess)

MG has an enhanced DB. There is a cost for that somewhere in there.
Also, the DB usually reduces over time, so its only a short term advantage.

MG gives a higher LTCI benefit under age 70. Over age 70 not so much.


But imo, the LTCFA is better if you need to take income (considering the annuitization options available).

So if the funds have a higher likelihood of being needed to supplement income, the FA might be the better option, especially considering the tax advantages of annuitizing NQ funds. It also has a guaranteed increasing income as opposed to a decreasing one.

They are both good products with similar but slightly different purposes.
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Is there an inflation rider available to keep the LTC benefits increasing each year? Yes, the annuity goes up in value each year (1%) and therefore the LTC benefit goes up as well. But, for a 50 year old, 3% or 5% compound is really what's needed.

There is a 3% & 5% compounding option.