MOO Vs. John Hancock LTC

[bherr]

Responding to several comments:

a. The "no inflation critics" are correct. Static benefits erode over time. Yes, any benefit is better than no benefit. But find the affordable price and work backward. Add inflation, and back-off the monthly benefit and years until the price is affordable. If available in the state, Partnership requires inflation. TX is a Partnership state.

b. If your FMO quoted Hancock's PLTC it was WITH inflation. There is not a "no inflation" option with PLTC. You can DROP inflation later, which is a VERY interesting comparison for ("hybrid" life+LTC or CI). BUT all initial "quotes" are with inflation (3%C. 5%C is rediculous pricing)

c. Why can't you run your own quotes? I'd go crazy if I had to call someone to run quotes for me. Find an FMO that gives you access to a quote engine. Run your own. (I use American Independent Marketing. They give access to online quotes for most major LTC carriers)

My 2 cents.

 

[ltcadviser]

Responding to several comments:


b. If your FMO quoted Hancock's PLTC it was WITH inflation. There is not a "no inflation" option with PLTC. You can DROP inflation later, which is a VERY interesting comparison for ("hybrid" life+LTC or CI). BUT all initial "quotes" are with inflation (3%C. 5%C is rediculous pricing)


My 2 cents.

With the Performance LTC 3% purchase option
"No inflation" with John Hancock is simply declining inflation and the increasing premium on the first policy anniversary. The initial premium on this purchase option design is just John Hancock's price for the initial base benefit. The initial graded premium is very expensive, just as John Hancock's level premium design with 5% compound is very expensive.

John Hancock's internal cost of insurance within the policy is the same no matter which direction you choose: no inflation, graded 3% or level 5%.

You use the term ridiculous which is how I might have described it until I saw New York Life's new pricing which takes John Hancock's rates to an entirely new higher level.

 

[bherr]

With the Performance LTC 3% purchase option
"No inflation" with John Hancock is simply declining inflation and the increasing premium on the first policy anniversary. The initial premium on this purchase option design is just John Hancock's price for the initial base benefit. The initial graded premium is very expensive, just as John Hancock's level premium design with 5% compound is very expensive.

John Hancock's internal cost of insurance within the policy is the same no matter which direction you choose: no inflation, graded 3% or level 5%.

You use the term ridiculous which is how I might have described it until I saw New York Life's new pricing which takes John Hancock's rates to an entirely new higher level.

Jack is correct in that to get "no inflation" you have to remove upon the 1st (or any) anniversary, i.e. drop the inflation option.

What I would point out is the "Policy Premium" VS "Net Premium":
The formula is simple, Policy Premium minus Flex Credit = Net Premium.

And YES, the Flex Credit is based on "current assumptions" and not guaranteed, but EVERY company bases their "net premium" on current assumptions and are not guaranteed, and always have been that way. Can those assumptions be wrong? Of course, just look at the LTC premium increases over the past few years (mine's gone up 85%).

Jack, I wasn't sure what you meant about the NYL premium. I can't quote it, so I can't verify. Are you saying it is much higher, or much lower? Please clarify.

 

[CALTCAgent]

Now that Mass has terminated broker contracts, how does an independent agent sell them ?

 

[ltcadviser]

Jack is correct in that to get "no inflation" you have to remove upon the 1st (or any) anniversary, i.e. drop the inflation option.

What I would point out is the "Policy Premium" VS "Net Premium":
The formula is simple, Policy Premium minus Flex Credit = Net Premium.

And YES, the Flex Credit is based on "current assumptions" and not guaranteed, but EVERY company bases their "net premium" on current assumptions and are not guaranteed, and always have been that way. Can those assumptions be wrong? Of course, just look at the LTC premium increases over the past few years (mine's gone up 85%).

Jack, I wasn't sure what you meant about the NYL premium. I can't quote it, so I can't verify. Are you saying it is much higher, or much lower? Please clarify.

Well, with the John Hancock policy you are guaranteed to have to pay at least twice as much premium and you have to hope for a future credit to get you back to where you otherwise might have been instead of simply paying 50% of the premium today and not have to hope for a future credit.

Yes, the NYL rates are higher than even the John Hancock rates. They are crazy high.

If other companies such as Omaha, Mass Mutual, LifeSecure and Genworth elect to follow JH and NYL's lead traditional LTC will be dead.

Let's hope MM, GNW, LS and MOO keep their rates stable for the near future.