Max or Not???

Mar 7, 2007

  1. James
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    James Guru

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    When selling LTC or even when you contemplate LTC Policy do you think a Max Benefit is called for or are you more in line with selling the Benefit to fit the average user of benefits which would be somewhere between 3-4 years, or lets say 5 years just to play it safe?
     
    James, Mar 7, 2007
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  2. Sam
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    Sam Founder Administrator

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    I don't actually sell any ltc, but I think that it is really a question of affordability.
    If someone can afford max benefit, I think there is a real desire for it by those very conservative investors who worked very hard to build their egg and don't want anything bad to happen to it, and they are willing to pay for that security.
     
    Sam, Mar 7, 2007
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  3. policy doctor
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    policy doctor Guru

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    I got disgusted selling LTC when 3 carriers suspended sales and started raising rates at a healthy clip...like 20-40%. So I've been out of the game for 3-4 years.

    However, I will probably revisit this market because rates have stabilized and people are living longer,so their probability of getting Alzheimers, Parkinson's, Crippling Arthritis, feeble, is higher.

    You need to understand your product, and have a couple plans ready to show them, like a basic 2-3 yr plan, vs 5 year. I think many companies are dropping lifetime benefit, because of actuarial risk and liability they don't want on the books.

    Ask people what their monthly income is, and sometimes you could run a plan where they co-pay . For example, let's say the daily benefit for nursing home ((NH) is $150-200 in your area. If they are avg 3k in monthly income, perhaps they would pay $50/day and policy would pay $150/day.

    Premium is what client feels comfortable in paying. So don't overload them either, because they will drop it after a while, . I would rather sell them a 2 year plan at $200-250/day w/o inflation rider. AT age 65 + more affordable. You need to discuss this with your marketing people in the company.
     
  4. L5tc
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    L5tc Super Genius

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    Partnership Plans

    The unlimited plan's cost is out of sight for most people. This is where the partnership plans - really right now only the NY plan - come into play. No 5 year look back and a pass to Medicaid should you go past your benefit period. I Know I know they take income but again - compare to the cost of an unlimited plan, look at how you can move around anything but annuity, soc sec and RMD's and it's not a bad idea.
     
    L5tc, Mar 9, 2007
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  5. James
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    James Guru

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    Partnership Plans that will undoubtably grow with new legislation while good isn't all that great. Esp. for those who can afford higher LTCi Premiums, lets face it these people really don't want to be on Medicaid for obvious reasons.

    It is hard enough for someone to actually move into a NH or ALF, but to consider that in 3-4 or 5 years to downgrade into a Medicaid Facility is much tougher indeed. Plus the Partnership Programs don't eliminate spenddown (as I beleived at first) but simply the amount of LTCi benefits is overlooked. In other words if you have had a benefit of say 150 grand paid out privately by insurance yet the rest of the estate is required to go thru spenddown, at least that is what I now believe is the actual case.
     
    James, Apr 30, 2007
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  6. bluemarlin08
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    bluemarlin08 Guru

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    Depends on their financial situation. With my wealthier clients I always start off with a max benefit, lifetime and compound inflation and then work to what they are comfortable. You might be surprised how often they choose the max plan, even clients that aren't the wealthiest but want max protection. I have also found that using a shared plan is an interesting concept that many find a good fit. Note of caution, always use compound inflation if under age 65, compared to simple it is a big difference in 20-25 years.
     
  7. James
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    James Guru

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    Are you Blue Marlin from TN? Nashville I believe, if so or not welcome to the boards!
     
    James, May 21, 2007
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  8. bluemarlin08
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    bluemarlin08 Guru

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    Yeah, that's me. I think know who you are , long time no see. Business is pretty good and getting better.
     
  9. James
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    James Guru

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    It would seem that John Hancock "Leading Edge" (their push towards limited care 3-5 years) is lagging and not being excepted by the market as their full blown lifetime care product "Custom Care". Finding true in the people I'm seeing also, they are trending away from limited plans if financially possible.
     
    James, May 21, 2007
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  10. InsuranceJosh
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    InsuranceJosh Super Genius

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    Even if you sell a max plan you are still only going to get whatever is the max per day.

    What would you rather sell? A $100 a day max plan or a $250 a day 4yr plan?

    I know what I would like to have...