LTC in Texas-12k/mnth

[DennisTheMennis]

Hi all,

A 52 year old woman (preffered, great health) and a 67 year old man (good-standard), live in Texas and are looking into a policy to generate $12,000/month for 6years straight in benefits each, including 3.5% inflation. I looked into Genworth, LTC for $12k or so a year, Lincoln Moneyguard looks better in my opinion as they have ROP, a DB and have the option to use it or not. $130k is the lump sum with Lincoln for her....Any other ideas or companies?

Thanks in Advance!

 

[billberry12]

And what is the lump sum for him with LMG? Add hers and his lumps together and you come up with a big chunk of change, right? No inflation either is there?

Do they want to tie up that lump sum, or pay the 12,000 a year, deductible fully if self employed, with inflation rider?

Do the math, show them both sides, and let them decide.

My suggestion is to show them a shared plan with GW with a long elimination period.

You also need to look at Genworth's TLC product. More features than LMG.

I hope this helps.

 

[Arthur Rudnick]

Dennis,
Just curious as to why you would want to over-fund a LTC policy with $144,000/yr in benefits? At 6 years, that's a starting benefit of $864,000 each.

Genworth's new, 2012 Cost of Care Guide shows that the average cost of a nursing home in TX is $65,000.

And realistically, people with long term care policies don't enter nursing homes, they receive care at home, which usually costs less.

With that said, Genworth does not offer a 3.5% compound inflation rider. It's either 3% or 5% compound.

The debate of Money Guard vs a stand-alone LTC policy has been in existence for years. My personal feelings have always been that we're dealing with 2 different products that addresses 2 different issues. Does your client want a LTC policy to protect their assets or are they looking for a life insurance policy to leave money to a beneficiary?

I'll leave that debate for another day, but just a couple of points:

If you're considering Money Guard, then you should take a serious look at Genworth's Total Living Coverage Policy (TLC). It's similar but has a few main advantages:

With Money Guard, for home care the provider must be licensed and affiliated with a licensed home health care agency. With Genworth, the provider can be informal, with no requirement to be licensed or certified.

TLC also has a 0-day elimination period for home care. MG only offers a 90-day elimination period and they are Service days.

I haven't done the numbers, but I'm told MG & TLC are pretty close, but on the surface TLC is a much better product than MG.

You say that at 52 the lump sum for MG is $130k, if I had to guess at 67, it's probably close to double. So, you're probably looking at a one-time payment with MG of approximately $350k- $400k. Is that about right?

Weigh that against a Genworth LTC policy at premiums of around $12,000/yr.
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Bill,
It seems that great minds think alike. I posted before I read yours...............

 

[DennisTheMennis]

You guys are spot on, I'm presenting the options for both sides. That $864k is an issue to be be discussed and will have a hand in this decision.

Let me answer some questions:

1. Either Lump sum or annual payment will be fine
2. The estimated target is $400 day each
3. 3% or 5% inflation (or a guaranteed interest rate like MoneyGuard 4% I beleive)
4. I've looked at the Genworth Priveleged Choice Flex, how is this different?
5. I will consult on elimination period

Correct me if I'm wrong, but with the LTC through Genworth, they will ahve already shelled out that large amount and not even use it. That seems like a bad deal, at least the Moneyguard gives you ROP, liquidity, a DB and would be better in the long run...? Breakeven point at roughly 10-11 years?

 

[Arthur Rudnick]

Dennis,
There is no difference. TLC has the exact same PC Flex policy that is available to Genworth Individual policyholders.

If you want to discuss ROP, that's available on the stand-alone policy, although it would most likely double the premium.

Either Lump sum or annual payment will be fine

Quite a difference between a $12,000 annual payment and a lump sum of $350k-$400k

Bottom line it's your job to present all options and it's your client's job to decide what to do.

I'm curious how this will end up. Please keep us informed as to the end result.
Good luck!

 

[billberry12]

"Moneyguard gives you ROP, liquidity, a DB and would be better in the long run...? Breakeven point at roughly 10-11 years?"

Genworth's TLC does the same thing....