LTC for 64F

[Allen Trent]

If the guy had invested his money, instead of putting it into the LMG, the earnings on it would have paid for the Transam LTCi premium for the rest of his life, including the rate increases.

Maybe, depending on where the money was invested. had he been invested in a Woodbridge Annuity, Colorado Bankers Life Annuity or shares of Kodak, Radio Shack, Blockbuster, or some others, he would have 0 left. Most savings & checking accounts & CDs have had almost no interest in the last 7 years & that is where seniors have a ton sitting. Would have doubled their money in an S&P 500 index fund

I get your general point, but there have been worse places that people have placed their money than a Hybrid with extension of LTC benefit that can appeal to some of the consumers. Especially the risk averse, guaranteed savers that don't like writing checks for anything

I still believe stand alone LTCi is the best tool for those willing to buy & pay for it.

 

[Mr_Ed]

Maybe, depending on where the money was invested. had he been invested in a Woodbridge Annuity, Colorado Bankers Life Annuity or shares of Kodak, Radio Shack, Blockbuster, or some others, he would have 0 left. Most savings & checking accounts & CDs have had almost no interest in the last 7 years & that is where seniors have a ton sitting. Would have doubled their money in an S&P 500 index fund

I get your general point, but there have been worse places that people have placed their money than a Hybrid with extension of LTC benefit that can appeal to some of the consumers. Especially the risk averse, guaranteed savers that don't like writing checks for anything

I still believe stand alone LTCi is the best tool for those willing to buy & pay for it.

tax-free muni bonds are pretty safe.

 

[Allen Trent]

tax-free muni bonds are pretty safe.

personally agree, but tell that to any seniors that held any Detroit munis or Puerto Rico or the other 2,500 defaults from like 2010-2015 for over $7B. Last I heard, only a small fraction of munis have any default insurance in place.

easier to roll the dice with other peoples money. But if they are average to small asset clients, some wont take the risk & therefore we see ridiculous amounts sitting in low to no interest bearing bank accounts.

 

[Tahoe Ray]

tax-free muni bonds are pretty safe.

Yields under 2%.

I don't disagree with your thought process, but some people like to have everything done in one product that is fully guaranteed and not have to worry about it.

For that, they pay a premium.

People could manage their own stock portfolios too but choose to pay mutual fund companies to do it (and sometimes pay an advisor on top of those fees).

Sometimes, it isn't only about the math...

 

[Mr_Ed]

Yields under 2%.

I don't disagree with your thought process, but some people like to have everything done in one product that is fully guaranteed and not have to worry about it.

For that, they pay a premium.

People could manage their own stock portfolios too but choose to pay mutual fund companies to do it (and sometimes pay an advisor on top of those fees).

Sometimes, it isn't only about the math...

Everything is NOT done in one product.

Hybrid policies are sold as one policy that gives you three different benefits:
"cash value" AND
"long-term care benefits" AND
"a death benefit"

However, you canNOT get all three benefits from the policy. You can only get one. If you buy a hybrid, you'll get:
"cash value" OR
"long-term care benefits" OR
"a death benefit"

Hybrids are "If you use it, you lose it" policies.

If you use the cash value in the hybrid policy,
• you lose the long-term care benefits and
• you lose the death benefit

If you use the long-term care benefits in the hybrid policy,
• you lose the cash value and
• you lose the death benefit

If you're healthy a hybrid is usually three times the cost of a traditional long-term care policy, but you're NOT getting three times the benefits because if you use one of the benefits, you lose the other two.

Hybrids are often advertised as crediting you with 4% interest (or a similar interest rate). However, after policy fees the actual interest rate is usually less than 1% or even negative.

If someone can qualify for a traditional LTCi policy, they would be better off buying the traditional and then buying a separate life insurance policy. They'll pay about the same as they would for the "hybrid" and they will get both benefits: LTCi and life insurance.

 

[Mr_Ed]

personally agree, but tell that to any seniors that held any Detroit munis or Puerto Rico or the other 2,500 defaults from like 2010-2015 for over $7B. Last I heard, only a small fraction of munis have any default insurance in place.

easier to roll the dice with other peoples money. But if they are average to small asset clients, some wont take the risk & therefore we see ridiculous amounts sitting in low to no interest bearing bank accounts.

2,500 defaults.
gimmeabreak.

1,000,000 municipal bonds.
2,500 defaults.
For every 1,000 muni bonds there's 2.5 defaults.
Wow.
And, of course, you could avoid that risk by investing in a nice income bond fund.

Sometimes I'm simply baffled by the way insurance agents think (or don't think).

 

[ltcadviser]

Some agents are comfortable asking for $200,000 check. Some agents are comfortable asking for a $459.65 EFT authorization form.

 

[Tothetop]

Everything is NOT done in one product.

Hybrid policies are sold as one policy that gives you three different benefits:
"cash value" AND
"long-term care benefits" AND
"a death benefit"

- Assuming hybrids are sold as you describe, can it not provide three benefits?
If after 2 years of owning a single premium hybrid:

• I decide to borrow $1,000 from my policy
• then a month later I go on claims
• then after exhausting my benefits I die and my family receives the guaranteed minimum death benefit

Have I not received all three benefits? Assuming hybrids are sold the way you say they are of course.

However, you canNOT get all three benefits from the policy. You can only get one. If you buy a hybrid, you'll get:
"cash value" OR
"long-term care benefits" OR
"a death benefit"

Hybrids are "If you use it, you lose it" policies.

If you use the cash value in the hybrid policy,
• you lose the long-term care benefits and
• you lose the death benefit

If you use the long-term care benefits in the hybrid policy,
• you lose the cash value and
• you lose the death benefit

Is not traditional Ltci a use it and lose it policy? The more you use your benefits are you not losing from your total benefit pool?

Let's say I have a shared benefit rider on my policy and I am on claims exhausting my benefit pool. Is not my spouse losing the shared benefit feature we have because I keep using my benefits? I guess you cant have it both ways you can only have one way right?

If you're healthy a hybrid is usually three times the cost of a traditional long-term care policy, but you're NOT getting three times the benefits because if you use one of the benefits, you lose the other two.

Are you saying "usually" because you know this is not always the case? If I paid for a traditional LTCi policy for 30 years and I never go on claims, have I not lost the ONE benefit this policy provided? Although it's, as you are saying, one-third the cost of a hybrid.

Hybrids are often advertised as crediting you with 4% interest (or a similar interest rate). However, after policy fees the actual interest rate is usually less than 1% or even negative.

If someone can qualify for a traditional LTCi policy, they would be better off buying the traditional and then buying a separate life insurance policy. They'll pay about the same as they would for the "hybrid" and they will get both benefits: LTCi and life insurance.

Your argument against hybrids would get more agreement if you simply said:

"Hey, I've been selling traditional LTCi all my career and I just want to keep selling what I know and keep the traditional LTCi market alive. So yeah I dont like hybrids pretty much."

 

[Tahoe Ray]

And, of course, you could avoid that risk by investing in a nice income bond fund.

Sometimes I'm simply baffled by the way insurance agents think (or don't think).

There is more risk in the bond fund as far as your principal (especially with where the current administration wants to see interest rates go)

Do you know what duration is?

I really think you're the only "insurance agent" in this conversation...since you don't seem to know much about anything other than the product you sell.

 

[Mr_Ed]

Some agents are comfortable asking for $200,000 check. Some agents are comfortable asking for a $459.65 EFT authorization form.

some agents want what's best for the consumer.