LTC with Mass Mutual

[CALTCAgent]

It is indeed first right of refusal in technical language, but you will hear managing partners, directors, and even home office staff encourage the use of outside products if ours isn't best.

But again, 75% of the time, we're the best.

I wonder what would hapenn if NWM wasn't the "best" 75% and it slipped to say 35% of the time.

Do you document that client refused NWM product first?

If they wanted you to only use whats best for the client in every situation, why have a captive contract, why not just independent?

They will still make money when you use them 75% of the time, won't they?

 

[2insureyou]

I wonder what would hapenn if NWM wasn't the "best" 75% and it slipped to say 35% of the time.

Do you document that client refused NWM product first?

If they wanted you to only use whats best for the client in every situation, why have a captive contract, why not just independent?

They will still make money when you use them 75% of the time, won't they?

There's no such thing as an independent contract that can use NWM...

And yes, we always discuss a NWM product, but the client can see pretty clearly when it's not going to be right for them by the direction I take the conversation.

If NWM was only right 35% of the time for clients, none of our reps would stay with them in a captive environment. You would not be able to meet minimum earnings.
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You still haven't answered my question:
Can you give us an example of a recent case where the NML policy did not fit your client?

... e.g. WHY did the NML product not fit for this guy?

His wife is already receiving care that they are paying out of pocket. He has sufficient resources to do a lump sum combo product and still create an income stream. In our conversation, based on his preferences, the annual premium of any traditional product would keep him up at night, as at his age, an adequate policy could run anywhere from 10k-17k annually, and he's just not comfortable with that (even though he could technically afford the premium)

I'd rather have client in something he's comfortable with versus something he may second guess every time the premium comes due.
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Please do explain to me how a good candidate for LTCi, is also a good candidate for a VA without guaranteed riders. I'm am very curious as to your answer.

You're kidding, right? There are a multitude of scenarios in which this could be the case, so I don't get your skepticism, but for kicks and giggles, here we go:

Client has a substantial pension from his former employer, Social Security for he and his wife cover base expenses, and we can utilize the much lower expensed VA from NML (which has a guaranteed interest fund and EXCELLENT bond funds, with EXTREMELY low expenses compared to the MetLife product we looked at), and can pull necessary resources for his annual expenses by pulling 10% per year avoiding surrender charges (actually, probably about 7% per year will cover cost of care for his wife). The savings on expenses in the NM VA will mean MUCH more money in his account long-term.

And, back on earlier point about combo v. traditional ltc, yes we could still technically 1035 money out each year to pay his ltc premium, again, he's just that kinda guy that won't be comfortable with that.

Am I missing something here?

 

[VolAgent]

You're kidding, right? There are a multitude of scenarios in which this could be the case, so I don't get your skepticism, but for kicks and giggles, here we go:

Client has a substantial pension from his former employer, Social Security for he and his wife cover base expenses, and we can utilize the much lower expensed VA from NML (which has a guaranteed interest fund and EXCELLENT bond funds, with EXTREMELY low expenses compared to the MetLife product we looked at), and can pull necessary resources for his annual expenses by pulling 10% per year avoiding surrender charges (actually, probably about 7% per year will cover cost of care for his wife). The savings on expenses in the NM VA will mean MUCH more money in his account long-term.

And, back on earlier point about combo v. traditional ltc, yes we could still technically 1035 money out each year to pay his ltc premium, again, he's just that kinda guy that won't be comfortable with that.

Am I missing something here?

No, I'm not kidding. It is a genuine question, but I really don't see how it benefits him.

He's buying LTC, so I'm guessing he's close to retirement?

What money went into the VA, qualified, non-qualified? You just put his money into the market with no protection. So if fees was such a big deal, why didn't you put it into mutual funds or managed money? I'm willing bet you could have cut fees even more.

Please help me see how a VA without riders is a better idea than a VA with riders, or going into the market without a VA wrapper. What did the VA do for this guy that something else would have?

 

[CALTCAgent]

And, back on earlier point about combo v. traditional ltc, yes we could still technically 1035 money out each year to pay his ltc premium, again, he's just that kinda guy that won't be comfortable with that.

Do you mean withdraw each year or 1035 to pay the LTC premium?

 

[2insureyou]

Do you mean withdraw each year or 1035 to pay the LTC premium?

1035 to pay premium in that particular question
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No, I'm not kidding. It is a genuine question, but I really don't see how it benefits him.

He's buying LTC, so I'm guessing he's close to retirement?

What money went into the VA, qualified, non-qualified? You just put his money into the market with no protection. So if fees was such a big deal, why didn't you put it into mutual funds or managed money? I'm willing bet you could have cut fees even more.

Please help me see how a VA without riders is a better idea than a VA with riders, or going into the market without a VA wrapper. What did the VA do for this guy that something else would have?

He is in retirement already. There are guarantees on every VA contract... he just doesn't feel, and I don't either, that he needs to pay for all the guarantees of the Met contract (nearly 4% annually, not mentioning surrender charges should he decide to change his mind)

Sure, we could use brokerage account or managed money. He does like the features of a basic variable annuity, the GIF fund options, and finds security in the product.

Within just a couple of years, with the amount going in, his overall fees are not going to be much more than 1% annually in the NM VA through their conversion schedule on the M&E charges, and, most of his money will only have a few years of surrender charges, which will be pretty low to start with.

It's a matter of preference for the client. He certainly preferred not to pay nearly 4% annually in fees on Met's product.

 

[Mr_Ed]

1035 to pay premium in that particular question
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He is in retirement already. There are guarantees on every VA contract... he just doesn't feel, and I don't either, that he needs to pay for all the guarantees of the Met contract (nearly 4% annually, not mentioning surrender charges should he decide to change his mind)

Sure, we could use brokerage account or managed money. He does like the features of a basic variable annuity, the GIF fund options, and finds security in the product.

Within just a couple of years, with the amount going in, his overall fees are not going to be much more than 1% annually in the NM VA through their conversion schedule on the M&E charges, and, most of his money will only have a few years of surrender charges, which will be pretty low to start with.

It's a matter of preference for the client. He certainly preferred not to pay nearly 4% annually in fees on Met's product.

... and not once do my fingers ever leave my hands.

 

[ltcadviser]

A couple from Denver called me this week. They were looking at a policy from their Northwestern Mutual agent for six grand a year. Wanted to see if they could do better. I showed them Colorado rates. Could get the same benefits for 3 grand with Mass Mutual, Genworth, or M of O. Told the couple to run to Mass Mutual. They knew the NWM agent for years. I respect relationships. Told them that they should ask their NWM agent to get them the Mass policy. If he couldnt write it, i would.

They asked me how I thought he would react. I told them: first he will be defensive that Mass Mutual is actually half of his cost; then, he will ask you if he can check it out and get back to you; and lastly he will act completely astonished and sheepishly ask you if HE can write your Mass policy.
They told me he acted exactly like i said That was my mitzvah for the week! Gave the dude a layup.

 

[CALTCAgent]

A couple from Denver called me this week. Were looking at a policy from their Nortwestern Mutual agent for six grand a year. Wanted to see if they could do better. I showed them colorado rates. Could get the same benefits for 3 grand with mass mutual, genworth, or m of o. Told the couple to run to Mass Mutual. They knew the NWM agent for years. I respect relationships. Told them that they should ask their NWM agent to get them the Mass policy. If he couldnt write it, i would. They asked me how i thought he would react. I told them: first he will be defensive that mass mutual is actually half of his cost; then, he will ask you if he can check it out and get back to you; and lastly he will act completely astonished and sheepishly ask you if HE can write your Mass policy. They told me he acted exactly like i said That was my mitzvah for the week! Gave the dude a layup.

I guess this one fell into that 25% where NWM is not better. I wonder if keeping contract with NWM by placing enough business there ever comes into play. Probably not.

 

[ltcadviser]

I guess this one fell into that 25% where NWM is not better. I wonder if keeping contract with NWM by placing enough business there ever comes into play. Probably not.

Ha, multiply the 25% by 4 and you might have the exact percentage of time NWM is not better! However, you can't fault a NWM agent for believing in its product. Bottom line is a a NWM agent is an employee, not an independent agent. It really is his duty to sell NWM product first and foremost.

What I do not like is if a captive agent outright misleads a client. I just got done working with a client for a 15 year term life insurance policy. NWM approved him for a $17000 annual premium. I immediately cut his rate to $9600. While, I was getting him approved for half the cost, the NWM agent kept insisting that he shopped around and NWM was the only company that would approve him. Just outright lied to my client. I guess they do what they have to do; but its unethical to lie just to charge a higher premium.

I'm just grateful I am independent. I can't worry about how captive agents rationalize their behavior. That's their business.

 

[CALTCAgent]

Ha, multiply the 25% by 4 and you might have the exact percentage of time NWM is not better! However, you can't fault a NWM agent for believing in its product. Bottom line is a a NWM agent is an employee, not an independent agent. It really is his duty to sell NWM product first and foremost.

What I do not like is if a captive agent outright misleads a client. I just got done working with a client for a 15 year term life insurance policy. NWM approved him for a $17000 annual premium. I immediately cut his rate to $9600. While, I was getting him approved for half the cost, the NWM agent kept insisting that he shopped around and NWM was the only company that would approve him. Just outright lied to my client. I guess they do what they have to do; but its unethical to lie just to charge a higher premium.

I'm just grateful I am independent. I can't worry about how captive agents rationalize their behavior. That's their business.

Its actually nice that they exist to educate the client and then they are ready when they see us!

I love it when I hear the Bankers Life agent was there before me. Makes my job so much easier.