Presenting Life W/LTC Rider Along-side a Traditional LTC Contract

[ltcadviser]

If your client needs life insurance, then you're not doing them any good by ruining the life insurance benefit if they need LTC. Sounds like they don't really need the life insurance.

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Single pay combo products rarely make sense.
And you pick the two worst ones to compare.

MG and PacPremCare are the two worst combo products.

gen tlc will crush those products for a healthy married couple every day.

but the best combo products are not single pay and they offer guaranteed annual premiums:

state life assetcare4
nationwide's new product
minnesota life's

Scott,

Asset Care IV is the exact same product as Asset Care 1, the single pay design. I actually wrote a 10 Pay Asset Care IV last week. The single pay has some advantages, though. Full ROP.

Minnesota Life is an IUL and the benefits are not guaranteed, whatsoever. Hybrid buyers will want the guarantees not found in traditional products.

The Nationwide product is indemnity based. Which is great. But Moneyguard crushes it on a dollar/benefit basis.

Pac Life is awful today.

Genworth TLC is not fully guaranteed on the benefits side. Inflation growth can collapse in 80s if charges are increased. I do not think it will happen. I am totally comfortable with TLC. But some clients will prefer moneyguard or asset care.
TLC can lose the ledger war if another adviser is involved.

I run these numbers every day in multiple applications.

Moneyguard, State Life Asset Care, and Genworth TLC are generally in the discussion.

Each one can be a fit, at least from my perspective.

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Anyway, Scott, to me the real issue with long term care planning isn't to debate which policy will provide the maximum benefit. As the advisor, our clients expect us to figure this out for them anyway.

The greater issue for all of us is to completely understand why our clients are doing long term care planning.

It is NOT because care costs $7000 month.

It is NOT because they believe statistics indicate they will need care.

It IS because they wish to be responsible to their partner, or their children; or even to themself.

Now, understanding this mindset of being viewed as a responsible party is important. Especially as it relates to single premium policies.

The buyer of the single premium policy writes the check because it immediately satisfies their strong prevailing desire to address and complete the issue.

The single premium buyer wants to know the plan is done.

The lifetime premium, even if guaranteed, is a bill.

With couples, a death could occur with the partner that views itself as the responsible provider and there could be doubt as to whether the surviving partner will pay the bill.

This is why single premium fully guaranteed policies are being bought today in record numbers.

It is solely because the buyer needs to know that the plan is done. And the buyer's duty of responsibility to the family has been upheld.

When this mindset is fully understood, long term care planning is easy.

 

[Mr_Ed]

Scott,

Asset Care IV is the exact same product as Asset Care 1, the single pay design. I actually wrote a 10 Pay Asset Care IV last week. The single pay has some advantages, though. Full ROP.

Minnesota Life is an IUL and the benefits are not guaranteed, whatsoever. Hybrid buyers will want the guarantees not found in traditional products.

The Nationwide product is indemnity based. Which is great. But Moneyguard crushes it on a dollar/benefit basis.

Pac Life is awful today.

Genworth TLC is not fully guaranteed on the benefits side. Inflation growth can collapse in 80s if charges are increased. I do not think it will happen. I am totally comfortable with TLC. But some clients will prefer moneyguard or asset care.
TLC can lose the ledger war if another adviser is involved.

I run these numbers every day in multiple applications.

Moneyguard, State Life Asset Care, and Genworth TLC are generally in the discussion.

Each one can be a fit, at least from my perspective.

----------

Anyway, Scott, to me the real issue with long term care planning isn't to debate which policy will provide the maximum benefit. As the advisor, our clients expect us to figure this out for them anyway.

The greater issue for all of us is to completely understand why our clients are doing long term care planning.

It is NOT because care costs $7000 month.

It is NOT because they believe statistics indicate they will need care.

It IS because they wish to be responsible to their partner, or their children; or even to themself.

Now, understanding this mindset of being viewed as a responsible party is important. Especially as it relates to single premium policies.

The buyer of the single premium policy writes the check because it immediately satisfies their strong prevailing desire to address and complete the issue.

The single premium buyer wants to know the plan is done.

The lifetime premium, even if guaranteed, is a bill.

With couples, a death could occur with the partner that views itself as the responsible provider and there could be doubt as to whether the surviving partner will pay the bill.

This is why single premium fully guaranteed policies are being bought today in record numbers.

It is solely because the buyer needs to know that the plan is done. And the buyer's duty of responsibility to the family has been upheld.

When this mindset is fully understood, long term care planning is easy.

For DIYers, who understand the time value of money, the math of the single premium doesn't make sense.

fyi... the full ROP on the AssetCare1 policy only applies to the base policy premium, not the continuation of benefits rider. There's never any type of refund on the continuation of benefits rider, which is why it is tax deductible.

 

[ltcadviser]

For DIYers, who understand the time value of money, the math of the single premium doesn't make sense.

fyi... the full ROP on the AssetCare1 policy only applies to the base policy premium, not the continuation of benefits rider. There's never any type of refund on the continuation of benefits rider, which is why it is tax deductible.

"FYI". Lol, Yes, Scott. I know this

Scott, as we've discussed people are buying these policies, and will continue to buy these policies in record numbers.

Like you, I over-analyzed the numbers and the IRR and opportunity cost of capital for years.

Now, today I understand it is not always about the numbers. As I mentioned above it is about the emotional appeal of the buyer signaling to the family that the issues are resolved.

The typical buyer of single premium policies that I work with have net worth between $2 million and $12 million.

Repositioning an asset into a single pay appeals to this high net worth individual.

I continue to provide my clients all of the available options so they may elect the course of action they prefer.

My point above is to help all of us as LTC planners understand why people today are electing certain options.

 

[Mr_Ed]

Scott,


Minnesota Life is an IUL and the benefits are not guaranteed, whatsoever. Hybrid buyers will want the guarantees not found in traditional products.

That's incorrect, Jack.
If the guaranteed death benefit rider is included, then the death benefit AND the LTC benefits are fully guaranteed. Since there's a guaranteed death benefit and a guaranteed long-term care benefit, the fact that it is an IUL allows for the death benefit and the long-term care benefit to be HIGHER than the guaranteed amounts (unlike AssetCare).

I'm not sure which one I will buy... I'm leaning towards ML.


sao

 

[ltcadviser]

That's incorrect, Jack.
If the guaranteed death benefit rider is included, then the death benefit AND the LTC benefits are fully guaranteed. Since there's a guaranteed death benefit and a guaranteed long-term care benefit, the fact that it is an IUL allows for the death benefit and the long-term care benefit to be HIGHER than the guaranteed amounts (unlike AssetCare).

I'm not sure which one I will buy... I'm leaning towards ML.


sao

The Eclipse Indexed UL?
Single Life? Joint Life?

Scott,

Email me an illustration as to how you would design this for you and let me take a look.

 

[Mr_Ed]

The Eclipse Indexed UL?
Single Life? Joint Life?

Scott,

Email me an illustration as to how you would design this for you and let me take a look.

certainly joint life.