NML LTC Misrepresentation

Jul 15, 2019

  1. Bill Boersma
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    Bill Boersma New Member

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    I have a client who was clearly a victim of misrepresentation by an NML agent. Specifically, the agent had some story about how NML wanted to price their LTC policy at 400% of market rates but regulators only allowed them to price it at 200% of market rates and that is a part of the reason they ultimately had a premium increase. I am told by a former NML LTC specialist that there actually was home office training to this effect. I'd love to get my hands on it.

    Agent also told client that even though LTC prices weren't guaranteed, NML knows what they're doing and doesn't increase rates. It would take a pandemic or similar disaster for them to increase rates.

    Any thoughts from anyone?
     
  2. Mr_Ed
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    Mr_Ed Guru

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    1) Has your client had a rate increase? If so, how much?

    2) In which state did your client reside when he/she purchased the policy?

    3) What was the effective date of the policy?



    mr_ed
     
    Mr_Ed, Jul 15, 2019
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  3. kpbdy99
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    kpbdy99 Expert

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    Must've been the same training where they told them how to make their DI product's medical specialty wording appear to be true own-occ.
     
    kpbdy99, Jul 16, 2019
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  4. Bill Boersma
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    Bill Boersma New Member

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    I'd have to pull the file to calculate the increase. This is a Michigan case from 2012.
     
  5. trustandadvice
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    trustandadvice Expert

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    Just had a client email me the NML letter today. Last year his daily benefit was cut from $371 to $327. He has 5% compounded growth so this year his daily benefit was $343 and NML knocked that down to $306. 2018 = -11.8% reduction, 2019 = -10.7%. Total reduction in benefit so far -22%+. 2018 premium = $8,130, 20019 premium = $8,101. Essentially premiums stayed the same/substantially similar but benefits way down.

    NML always said that their premiums were double the industry to give themselves a buffer plus they are participating and the dividend was/is also a buffer. Seems like the only buffer for NML is the client's balance sheet.