Resistance to Long-term Planning a Looming Crisis

[yankee466]

Bill,
Very rarely are single applicants less than $3,500 and couples are $6,000-$8,000. Luckily, I work in a high networth area.

NYS Partnership minimum daily benefits are $270 (increasing to $280 in 2014) and 5% cmp. inflation riders are mandated for every carrier except one, who just started offering a 3.5% cmp.

My Traitional proposals are usually 3 & 5 years with a $250/day benefit & 3% cmp. I do about 70% 5 years & 30% 3 years. Average age is about 59, but I still do alot of business for those
65-72.

I haven't written a $2,000 AP for a single in over 10 years.

Like I said, if all my Georgia clients had bought policies of that size, I would have retired by now. We may all be a little slow down here in the south, but at least we have access to a lot of low cost services. It is a red state you know.

 

[Arthur Rudnick]

previously posted by yankee466

Like I said, if all my Georgia clients had bought policies of that size, I would have retired by now.

Not if you smoked and had to buy a pack of cigarettes in NYC for $14.00 a pack.

Or lived in Manhattan where the "average rent" for a 2-bedroom apartment was almost $4,000/month.

Or, when crossing one of NY City's toll bridges back & forth to work sets you back $7.50 each way.

Or, you owned a home in Westchester County and had to pay $15,000-$20,000 a year in real estate taxes.

Should I go on?

 

[csalter]

previously posted by yankee466



Not if you smoked and had to buy a pack of cigarettes in NYC for $14.00 a pack.

Or lived in Manhattan where the "average rent" for a 2-bedroom apartment was almost $4,000/month.

Or, when crossing one of NY City's toll bridges back & forth to work sets you back $7.50 each way.

Or, you owned a home in Westchester County and had to pay $15,000-$20,000 a year in real estate taxes.

Should I go on?

Arthur, you have just reminded me of why I left New York. I grew up there and left when I was 24. It was the smartest move I made. When I go home to visit my family, I look at the quality of living and I thank my lucky stars that I moved to Southern California. Plus, I am talking about when it's summer not even winter. I really am glad during winters.

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I hear you, BUT.........

As has been discussed many times, this product is not for the middle class consumer. It's for the upper, middle class. Agreed, protecting one's assets is one of the prime features of a policy.

I'm not sure if someone with $200,000 is a target for LTCi. If a couple has that level of assets, they most likely will not have enough in the way of income to afford a decent policy.

In the NY metro area (and maybe it's a NY thing) nursing homes are running $120,000-$150,000/year (and in some cases more)

Unlike many agents, I'm not a big "fact-finder" when discussing the merits of purchasing a policy. My fact-finding consists of only 2 questions:
1) Do you have enough in the way of assets to protect? and
2) Do you have enough in the way of income to comfortably afford a policy?

The answer has to be "yes" to both questions in order for me to proceed. I find that in many cases, someone with only $200,000 in assets does not have enough in the way of income to purchase a policy.

I understand that I'm in the minority on this issue and I'm a little jaded because the prospects that I work with usually have assets (not counting the equity in their home) in excess of $500,000 and household income in excess of $75,000.

Arthur, there are many people with $200,000 in assets that receive monthly incomes in pensions of over $10,000 per month. They would be good candidates in my opinion, wouldn't they?

 

[scagnt83]

Arthur, there are many people with $200,000 in assets that receive monthly incomes in pensions of over $10,000 per month. They would be good candidates in my opinion, wouldn't they?

Great point. Cash flow is more relevant than assets. They would most definitely be a candidate for LTCI.

If someone has assets to protect, and sufficient cash flow to purchase a decent amount of LTCI. Imo they should get whatever amount they can afford. To protect a portion of your life savings is better than protecting nothing.

But as Author pointed out, what qualifies as a decent amount varies depending on location. But in most of the US $100k is double the average salary.

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I understand that I'm in the minority on this issue and I'm a little jaded because the prospects that I work with usually have assets (not counting the equity in their home) in excess of $500,000 and household income in excess of $75,000.

But as you pointed out, $75k per year is not all that much anymore.
your market is not all that rare and exists everywhere. Yet these are the same people who often claim that LTCI is too expensive. And often a Cadillac LTCI policy is too expensive for them with the many other expenses they have.

Dont get me wrong. LTCI is not for everyone. And you certainly need sufficient assets and cash flow to afford it along with all the other expenses that come with retirement.

But my point is that the "all or nothing" mindset (imo) is a huge roadblock in the american mindset that is holding a lot of people back from purchasing LTCI.

Again, give me one good reason why someone should not protect whatever portion of their assets they can, and extend those assets for as long as possible...

 

[Arthur Rudnick]

previously posted by scagnt83

LTCI is not for everyone. And you certainly need sufficient assets and cash flow to afford it along with all the other expenses that come with retirement.

I completely agree..........

As I previously posted, the protection of assets is a prime reason to purchase a policy. How much assets someone has to protect is subjective and differs with every prospect.

But, there's a fine line in the amount of assets worth protecting. Is a policy right for someone with $50,000, $100,000, or $150,000?

If someone had that amount of assets and required LTC services without a policy, they'd blow through all of their assets in a short period of time and wind up on Medicaid. That being the case, regardless of income, is a policy appropriate?

Are there people with $200,000 in assets and $120,000/yr in income? I'm sure there are. In that case, a policy is probably affordable.

So, where is the "cut-off"? I think every situation
is different. We've all met single prospects with assets, with no children or beneficiaries to leave their money to and don't really care if at the end of their life they were broke.

But, at the end of the day, if I'm sitting with someone discussing LTCi, they have already reached the decison that LTCi may make sense for them and they are looking to find out how much the premiums are.

The people that I meet with feel they have enough assets to protect and in most cases it's the premium amount that stops the sale.