Regular LTC policies without rate increases?

Aug 22, 2018

  1. Mr_Ed
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    Consumers have no idea that the hybrids are costing them 2x to 4x more than a traditional LTCi policy.

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    Mr_Ed, Sep 17, 2018
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  2. Mr_Ed
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    Consumers have no idea that the hybrids are costing them 2x to 4x more than a traditional LTCi policy. Once they are educated they choose traditional LTCi policies 90% of the time.

    5 Facts You Should Know About Long-Term Care Insurance

    AARP knows.
     
    Mr_Ed, Sep 17, 2018
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  3. bluemarlin08
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    The consumers that I have met that bought the One America policies were not aware their one time deposit does not accrue inflation until exhausted and if one projects out 25 years they could be on the hook for another huge cost similar to their initial deposit. Not one was aware.
     
  4. Mr_Ed
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    Mr_Ed, Sep 17, 2018
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  5. ltcadviser
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    The consumers you have met with must have worked with idiot agents, Ned. Not to mention the consumers you have met with need to read contracts better themselves before they sign. I do not have any issues explaining how these policies work to any of my clients, nor do my clients have any issues with how these policies work. Obviously, your mileage varies. So, do what you want to do. You will anyway.
     
  6. JJ2713
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    I know your against hybrid LTC policies.

    However, some people REFUSE to get a regular LTC policy and receive no benefit if they don't use the policy (i.e. if you don't use it, you lose it).

    You also have to remember about the rate increases. Some people will prefer a higher stable rate rather than a lower unstable rate.
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    But if someone doesn't want a regular LTC policy for whatever reason, it's the agents job to present other LTC alternatives so the person still has the LTC risk covered.

    These people who buy hybrids are OK with receiving less LTC leverage for every dollar of premium.

    You're correct that for every dollar of premium ("pound for pound"), a regular LTC policy gives more LTC leverage.

    Nobody is arguing against this. But your insistence on bashing hybrids is not logical.
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    The agent has to use more than one tool to protect a client's risk. It's the agent's job to present all options. Explain where the client gets the most LTC leverage, and then have the client decide on which policy they feel best with. Or the client can choose multiple policies.

    And there are even some people who don't even want a hybrid and just want a Life insurance policy with a chronic illness rider or accelerated death benefit. In these policies, the LTC benefit is equal to or less than the death benefit (so even less LTC leverage than a hybrid).
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    This is similar to annuities. SPIAs/DIAs vs FIAs+income rider. The SPIAs/DIAs pay more income for every dollar of premium, but some people don't want to annuitize.

    So, a FIA+income rider is the only other way to get guaranteed income. It pays less and has more bells and whistles, but that's what the client prefers.
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    Just present all options with their pros/cons, and let the client decide.
     
    Last edited: Sep 17, 2018
    JJ2713, Sep 17, 2018
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  7. JJ2713
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    If given the choice...

    How many people would pay more in premium for their car, home, health, etc. insurance if they could get their premium back every year if they didn't have a claim?

    People do complain that they pay insurance and receive nothing back, but they also only have ONE option. There is no return-of-premium insurance for car, home, health, etc.

    If it existed, it would immediately be a very popular option compared to normal insurance.
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    Just for term life, that's it. But that's at the end of the term, not at the end of every year.
     
    JJ2713, Sep 17, 2018
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  8. Mr_Ed
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    The question is "how much more?"
    When consumers realize that they can get a traditional LTCi policy for about one-third the cost of a hybrid (sometimes even less) they pick the traditional and they keep the rest invested and earning money for themselve (not the insurance company).
     
    Mr_Ed, Sep 17, 2018
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  9. ltcadviser
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    Some people?

    How about a LOT of people.
     
  10. JJ2713
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    "Some" is a relative term... but yes, many people have a problem with regular LTC.

    How do you present LTC to clients?
    Present all options and let them decide?
     
    Last edited: Sep 18, 2018
    JJ2713, Sep 18, 2018
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