Mutual of Omaha Joins The Party

[yankee466]

"Arthur, you know as well as I, that there are a lot of situations where the policy in question can cost anywhere from 50% to 100% more than comparable benefits from other LTC insurers.

Chuckles has stated that "strength of contract" (or, as he put it: "a contract that is designed to pay claims") is more important to him than the actual premium.


Scott,
I hear you and you certainly have the right to call someone out when they make mistatements. And yes, premiums do vary from company to company, sometimes substantially.

But personally, if I'm offering 2 or 3 good policies and there are minor differences within each contract, my usual recommendation is to go with the lowest premium.

"Chuckles has stated that "strength of contract" (or, as he put it: "a contract that is designed to pay claims") is more important to him than the actual premium."

The strength of contract is important, (aren't all LTC contracts designed to pay claims?) but as I said previously, just about every carrier out there has a good, strong contract. And, yes the stronger (or better) the contract, in theory the more the policy should cost.

Chuckles knows that, you know that, I know that and everyone in the business knows that.

However....................
The prospect doesn't know squat!

In most cases, the #1 concern for the person you're talking with is the premiums. In 16 years in the business, I've never had a prospect ask me; "what about the strength of contract"?, but everyone asks "how much"? Because at the end of the day, if it's unaffordable, it's over!


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Chuckles,
Just out of curiousity, run me a NWM quote for a 60 yr. old couple.

Standard Health Rates
$6,000/monthly benefit
5 year benefit period
5% compound inflation rider
90-day EP
zero day EP for home care
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Rick states:

Both Arthur, Scott and Herman have taken time to help me and i think the most important thing they all say is rather than focusing on which policy is the best, perhaps it is better to focus on actually helping the prospective client.

That's because between Scott, Herman and myself, we have about 765 years between us in the LTC business.

Rick, it's always about the premiums. I'm convinced that in 90% of the cases, when someone does not purchase a policy, it's because they can't afford the premiums. They may blow smoke and give you a whole bunch of excuses, but it's always about the cost. They're just too embarrassed to tell you they can't afford it. At the end of a presentation, I've never had someone say: "Long term Care insurance? What a stupid idea".

Being from the NY metro area, I see it upfront everyday. Nursing homes around here are running $375-$400+/day. I can't sell $150/day policies like other agents. So, when I'm dealing with $250-$300 daily benefits, sticker shock is obvious.

"I like the pricing from Mutual of Omaha and the shared benefit rider. I like the Moneyguard plan for those who insist that it won't happen to them and if it does they can pay for it themselves. I like Genworth for their CA partnership product."

Every agent has their favorites. It may be the contract, it may be the underwriting, it may be the premium or a combination of all 3. Run with what you feel comfortable with but always be aware of your competition's product.

Now if I could just find a way to generate some leads...

That my friend, is the hardest part of our job.........

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re: "That's because between Scott, Herman and myself, we have about 765 years between us in the LTC business."

Hey....I just started in this business last week.....you guys must be really old.

 

[Arthur Rudnick]

"Hey....I just started in this business last week.....you guys must be really old."

Not me, must be Scott.

You've been to his website. You know what he looks like.

I have a neighbor down the block who's 96. If you compare the top of his head to the top of Scott's head, you can't tell the difference.


(Now THAT'S a good one)

 

[Chuckles21]

Chuckles,
I'm surprised. $9,320 was lower than I thought.

I'm wondering why the WI DOI allows an illustration that shows dividends payable 40 years down the road when dividends are never guaranteed. In fact, it says as much in your illustration. Obviously it's allowed and it's a good selling point. A little bogus, but a good selling point.

In comparing apples-to-apples, here's what NWM is up against in WI:

Pru: $7,165
Genworth: $6,420
Mutual of Omaha (with a 35% cash benefit option): $7,229

Assuming that all offer a good policy (and they do) the only thing NWM has to hang their hat on are dividends down the road, that may or may not reflect the actual numbers in your illustration. But, your prospect doesn't know that because an illustration is pretty convincing.

So, I ask you this: Why should someone purchase a NWM policy for any reason other than the projected dividends?

That's assuming that your prospect also had the benefit of looking at the other 3 carriers listed above?

Arthur,

Thanks for the #'s. It is the same as selling a life insurance contract as far as showing projected dividends. I am always very forthright in letting my clients understand that they are not guaranteed. The reason I still feel confident in showing them is our history and financial strength. We are arguably one of the most conservative companies out there for underwriting which also helps.

Now to answer why one would buy NWM over the other carriers if presented with all 4. As you say they are all good policies. Clients relate to our companies financial strength, lack of a rate increase and projected dividend payout. We have the absolute best financial strength ratings. Most already have had our whole life policies and have seen the superior performance on them. They like going into something with a pretty strong feeling that we won't raise rates on them. Not that we can't but we never have and if we are giving money back in the form of a dividend that would have to go away first.

In all our products we are not the least expensive. That is not our goal. We strive to provide a quality product that we will never have to apologize for by going back and asking for more money and plan on giving back instead.

 

[dgoldenz]

In all our products we are not the least expensive. That is not our goal. We strive to provide a quality product that we will never have to apologize for by going back and asking for more money and plan on giving back instead.

Let's say it takes on average 10 years for a rate increase to hit an old block of business (sound about right?). Let's say the increase is 30%. Using the illustrations posted, the premium difference is about $3k/year times 10 years = $30k in extra premiums, less whatever dividends may or may not be there in the future. If the rate goes up 30% on a $6k premium, it would still take another 17 years to shell out that $30k difference, a little longer factoring in the time value of money. That's 27 years from when you started IF there is a rate increase at all, not even factoring in the stricter underwriting...

 

[Mr_Ed]

Arthur,

Thanks for the #'s. It is the same as selling a life insurance contract as far as showing projected dividends. I am always very forthright in letting my clients understand that they are not guaranteed. The reason I still feel confident in showing them is our history and financial strength. We are arguably one of the most conservative companies out there for underwriting which also helps.

Now to answer why one would buy NWM over the other carriers if presented with all 4. As you say they are all good policies. Clients relate to our companies financial strength, lack of a rate increase and projected dividend payout. We have the absolute best financial strength ratings. Most already have had our whole life policies and have seen the superior performance on them. They like going into something with a pretty strong feeling that we won't raise rates on them. Not that we can't but we never have and if we are giving money back in the form of a dividend that would have to go away first.

In all our products we are not the least expensive. That is not our goal. We strive to provide a quality product that we will never have to apologize for by going back and asking for more money and plan on giving back instead.

Your post that got this discussion started mentioned "strength of contract."

Can you please provide some concrete examples of the "strength of the contract"?

The dividends are not guaranteed. (Plus, they don't make sense. Why should I pay more money now that I might get back. Why not pay less now, keep my own money, earn money on my own money, and only pay more later if I have to.)

The "retroactive contract benefits" you boasted about are not in the policy. They certainly are not guaranteed.

You said the policy is designed to "pay claims". Can you please provide a concrete example from the contract of how the NWM policy is better designed to "pay claims" than the other policies?

Or do you have nothing else to offer but sales pitches?


nadm

 

[billberry12]

Scott, you, as well as I know, it's all about NWM koolaid. He drank it. Period. You can debate from now on until he quits in six months. Just me 2 cents. Dividends are only overcharged premiums being returned to the policyholder, with no interest. What a great deal for NWM!!
Bill

 

[Mr_Ed]

"Hey....I just started in this business last week.....you guys must be really old."

Not me, must be Scott.

You've been to his website. You know what he looks like.

I have a neighbor down the block who's 96. If you compare the top of his head to the top of Scott's head, you can't tell the difference.


(Now THAT'S a good one)

Arthur,
I will remind you that there are no wrinkles on my bald head.

;-)
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Scott, you, as well as I know, it's all about NWM koolaid. He drank it. Period. You can debate from now on until he quits in six months. Just me 2 cents. Dividends are only overcharged premiums being returned to the policyholder, with no interest. What a great deal for NWM!!
Bill

Bill,
I know.
I just wanted to encourage the discussion and try to get him to examine some of the things that he's been told.

Only in the mind of a captive agent does it make sense to say, "We're doing you a favor by charging you more, because we might give you some back."

And I'm all in favor of a "strength of contract." I just wanted him to actually examine the contracts and point out what in the NWM contract was truly superior. It was pretty obvious that he was just regurgitating what he's been told. His statements were not based on his own investigation, just what he's been told about other products.

I was a captive agent once, too. I was told that there was only a 10% difference between the cost of my company's policy and all the other policies. So, why not pay the extra 10% because of the "financial ratings" and the "quality of the contract".

And, it was actually a client of mine who taught me how and why I should NOT be a captive agent. She changed my life.

If it wasn't for Harley Gordon's satellite seminars and for that client of mine teaching me how to do a good, thorough job for each client, I wouldn't be in this biz.


nadm

 

[Arthur Rudnick]

I'm not defending Chuckles, but a point can certainly be made................

1) NWM has the highest financial ratings on the planet:

AMBest: A++, Highest rating available; Superior
Fitch: AAA, Highest rating available, Extremely strong
S & P: AAA, Highest rating available, Extremely strong
Moody's: Aaa, Highest rating available, Superior
Comdex: 100, Highest rating available,

They're batting 1000 on everyone of the above categories.

2) They have a high-end client base. Someone with a NWM portfolio of investments and/or other insurance products feels very comfortable with the company and previous products purchased and if the NWM agent recommends a LTC policy, they will buy it and will not shop around.

3) They have a history of not missing a dividend payment for Life insurance for well over 100 years. That's a pretty strong statement.

4) They have a good+ product

5) Scott, you admit that you were at one time a captive agent and therefore sold product from one company. You promoted that company, you promoted that product and when someone questioned your motives, you defended both your company and your product.

Is it fair to say that "Scott drank the Kool Aid"? I think not............

Although I have been independent since day 1, there certainly can be solid arguments made for reasons to be captive. (as there are reasons to be independent)


I may be wrong, but I would guess that the only reason Chuckles would not sell a client a NWM LTC policy is because of an underwriting issue, which is understandable. The same is true for every other captive agent in the business. That doesn't make him a bad guy.

And, if 90% of his business is NWM, I can understand why he doesn't know every single verse of a PRU policy or any other product. As long as he knows more than the prospect he's in front of, that's enough to get by.

But, we're not prospects. This is a pretty tough crowd and hopefully Chuckles will learn that in the future not to post statements that he's not 100% sure of......


This post was paid for by Chuckles

 

[Chuckles21]

Your post that got this discussion started mentioned "strength of contract."

Can you please provide some concrete examples of the "strength of the contract"?

The dividends are not guaranteed. (Plus, they don't make sense. Why should I pay more money now that I might get back. Why not pay less now, keep my own money, earn money on my own money, and only pay more later if I have to.)

The "retroactive contract benefits" you boasted about are not in the policy. They certainly are not guaranteed.

You said the policy is designed to "pay claims". Can you please provide a concrete example from the contract of how the NWM policy is better designed to "pay claims" than the other policies?

Or do you have nothing else to offer but sales pitches?


nadm

I posted how I felt our contract is stronger in a few categories and admitted I misunderstood my first point.

Dividends are not guaranteed and not once have I said that they are. I make it a point to make sure my clients understand this as well. On the flip side of that is that you cannot ignore history, although it proves nothing for the future, it does give us some guidelines. Our history is one of paying dividends and pricing policies correct, in our companies mind, from the start. Why is it companies are raising their rates? It is because they did not properly price the products to begin with. We never want to be in that situation. We pride ourselves on our financial strength and our value to the client.

"The "retroactive contract benefits" you boasted about are not in the policy. They certainly are not guaranteed."

Never said they were guaranteed, but we do this. It is part of our value proposition to our clients. Being a mutual company means we want to treat all our policy holders equal. It would not be right in our mind to not offer a policy enhancement to new buyers and leave the current holders in the dust. See attachment for proof.

 

[Chuckles21]

I'm not defending Chuckles, but a point can certainly be made................

1) NWM has the highest financial ratings on the planet:

AMBest: A++, Highest rating available; Superior
Fitch: AAA, Highest rating available, Extremely strong
S & P: AAA, Highest rating available, Extremely strong
Moody's: Aaa, Highest rating available, Superior
Comdex: 100, Highest rating available,

They're batting 1000 on everyone of the above categories.

As much as nadm doesn't think this matters it does in almost all our clients eyes. Especially in today's market with so much personal distrust in large companies getting bailed out.

2) They have a high-end client base. Someone with a NWM portfolio of investments and/or other insurance products feels very comfortable with the company and previous products purchased and if the NWM agent recommends a LTC policy, they will buy it and will not shop around.

That is part of our relationship building proposition. We work with clients throughout their life making sure everything they do works together like the pieces to a puzzle. A lot of these clients have had our policies for decades and have never had a complaint. Also many clients use their life insurance dividends to pay for their LTC.

3) They have a history of not missing a dividend payment for Life insurance for well over 100 years. That's a pretty strong statement.

Plus having paid dividends on our DI every year for something like 30+ years running. We pride ourselves on our dividend paying history in all our product lines.

4) They have a good+ product

We may have one or two things better in ours, but a lot of other companies have one or two things better in theirs as well.

5) Scott, you admit that you were at one time a captive agent and therefore sold product from one company. You promoted that company, you promoted that product and when someone questioned your motives, you defended both your company and your product.

Is it fair to say that "Scott drank the Kool Aid"? I think not............

Although I have been independent since day 1, there certainly can be solid arguments made for reasons to be captive. (as there are reasons to be independent)


I may be wrong, but I would guess that the only reason Chuckles would not sell a client a NWM LTC policy is because of an underwriting issue, (Pretty much) which is understandable. The same is true for every other captive agent in the business. That doesn't make him a bad guy.

And, if 90% of his business is NWM, I can understand why he doesn't know every single verse of a PRU policy or any other product. As long as he knows more than the prospect he's in front of, that's enough to get by.

But, we're not prospects. This is a pretty tough crowd and hopefully Chuckles will learn that in the future not to post statements that he's not 100% sure of......

I did get caught with my pants down on the waiting period.

This post was paid for by Chuckles

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