john.hennessey@
New Member
- 2
Yea - I'm with you, the cost is a concern...but in some respects, it's just the old "you get what you pay for". The main point I would make is that the market needs more than one solution because there is more than one type of buyer. What I mean by that is that some people are much more risk averse than others while others want a sure deal. That's the biggest difference that I see in the two - one has a lot of uncertainty associated with the premium investment, the other has none. For some of prospects, that's a big deal.
Remember too when you're comparing rates that the traditional LTCi rates you are using in your comparison are most likely NOT the rates that will be paid later...and further, those rates may go up a lot, and multiple times, between now and thirty or forty years from now. CareShield has rates guaranteed forever. This fact alone makes any sort of rate comparison as a starting point difficult. For some folks, it's nice to be able to just say, rates can never be increased - end of story. The second thing is that with traditional LTCi, you can only collect the increased benefits if you have a long term care event. I get it, that's what we're insuring against...but to say you get more coverage for the premium isn't the whole story when you're comparing it against a product that will always pay all of the benefits, no matter what when all is said and done. The last thing is ROP. WE know that it costs a lot to add it to a traditional LTCi sale - so much in fact that we never do add it...and further, the ROP only pays premium back upon DEATH. With the CS product, someone can walk away, while still alive, and get some or all of their premium back. I'm not saying it's a reason to buy insurance...but it is a feature that can help make a sale and it does cost something in the premium rates. The main thing I would say is that not all buyers are the same and we therefore need more than one tool...and LTCi, let's face it, isn't the perfect solution for everyone. Even though it "costs more" so to speak, I like being able to say that rates can NEVER go up, you'll always receive 100% of your benefits no matter what and if get tired of the plan and want to get all your premium returned someday, it will allow for that too. Those are all things you can't say with traditional LTCi...and for some people, they aren't buying traditional LTCi because of it.
Remember too when you're comparing rates that the traditional LTCi rates you are using in your comparison are most likely NOT the rates that will be paid later...and further, those rates may go up a lot, and multiple times, between now and thirty or forty years from now. CareShield has rates guaranteed forever. This fact alone makes any sort of rate comparison as a starting point difficult. For some folks, it's nice to be able to just say, rates can never be increased - end of story. The second thing is that with traditional LTCi, you can only collect the increased benefits if you have a long term care event. I get it, that's what we're insuring against...but to say you get more coverage for the premium isn't the whole story when you're comparing it against a product that will always pay all of the benefits, no matter what when all is said and done. The last thing is ROP. WE know that it costs a lot to add it to a traditional LTCi sale - so much in fact that we never do add it...and further, the ROP only pays premium back upon DEATH. With the CS product, someone can walk away, while still alive, and get some or all of their premium back. I'm not saying it's a reason to buy insurance...but it is a feature that can help make a sale and it does cost something in the premium rates. The main thing I would say is that not all buyers are the same and we therefore need more than one tool...and LTCi, let's face it, isn't the perfect solution for everyone. Even though it "costs more" so to speak, I like being able to say that rates can NEVER go up, you'll always receive 100% of your benefits no matter what and if get tired of the plan and want to get all your premium returned someday, it will allow for that too. Those are all things you can't say with traditional LTCi...and for some people, they aren't buying traditional LTCi because of it.
