Shaking my Head Today

[ltcadviser]

So, I receive a call from a 68 year old widow that states she wants to buy long term care insurance.

In our discussions, she reveals her financial advisor wants her to reposition $50,000 in Lincoln Moneyguard.

And she reveals an ACSIA agent had applied her to Life Secure.

I ask her to tell me her net worth.

She replies $80,000. Total.
Fixed income of $3500 month.

I state emphatically to her I will not apply her for any long term care insurance product. Not suitable in my eyes.

Now, obviously any financial adviser that would move 63% of liquidity really needs to have a sit down with the state insurance commissioner. Without a doubt, Lincoln would not accept that application although I would imagine the adviser would misrepresent assets on the application to get it through.

Would anyone even consider a traditional policy for this profile??

I know I wouldn't.

 

[Arthur Rudnick]

Agreed............

Obviously this lady is not too bright and needs an advocate (a child) to sit in with her before she makes a financial decision on her own.

Like you, I would walk away.

 

[wln417]

Did she put the $50k into Moneyguard, or was it just recommended?

Did she take the advice of a professional and apply for Life Secure?

Why is she "obviously not too bright?" Seems she was "bright" enough to seek another opinion!

 

[Arthur Rudnick]

originally posted by win417

Why is she "obviously not too bright?" Seems she was "bright" enough to seek another opinion!

Why is she obviously not too bright?

Read post #1 again..................

 

[VolAgent]

originally posted by win417




Why is she obviously not too bright?

Read post #1 again..................

Playing devil's advocate.

Perhaps she wants piece of mind? Maybe her biggest fear is being dependent on Medicaid for her long term care needs if the time comes?

Financially, it really is not a good move, but I can easily see how she would want this and not be "not too bright".

 

[Arthur Rudnick]

originally posted by VolAgent

Perhaps she wants piece of mind? Maybe her biggest fear is being dependent on Medicaid for her long term care needs if the time comes?

Financially, it really is not a good move, but I can easily see how she would want this and not be "not too bright".

Well, here's my thoughts and I'll assume ltcadviser's as well:
(Jack, correct me if I'm wrong)

1) I would never consider selling someone a LTC policy if they had only $80,000 in assets. If she wound up in a nursing home without a policy, she would blow through 100% of her assets within a year. True, home care may take a little longer. But, once she has spent down to Medicaid levels, Medicaid will step in and pay 100% of her care.

2) At 68 years old, any kind of decent policy would probably cost her about about $4,000/yr. Her income is $42,000/yr. $4,000 is just short of 10% of her annual income, which according to all industry standards is above the qualification level for recommended coverage.

3) Her net worth is $80,000. I think it's borderline unethical to recommend that someone use 2/3 of their total assets and put it in any type of financial vehicle. This woman is 68 years old, not 88. She may have another 20 years to go and you're suggesting that she survive for the rest of her life on $30,000?

4) ltcadvisor even stated that if she did purchase a Money Guard policy, if her total financial picture was honestly exposed on the app, they would refuse to issue her a policy. So, not only do my concerns appear valid, but the insurance company themselves agrees the product is not appropriate.

Everyone has their guidelines. I may be wrong, but those are mine.

 

[VolAgent]

I agree, it doesn't make a lot of sense from a financial aspect.

I was playing devil's advocate. Also, her concerns are her concerns. We may not agree and can refuse the business, but it doesn't make her "not too bright" for wanting to address them.

The people who are "not too bright" are the agents trying to force through business that is surely to be rejected or where they are having to falsify information to get it approved.

 

[wln417]

Perhaps it was my fault. Perhaps Mr. Rudnick can read things into ltcadviser's posts that are not obvious to someone who is not as familiar with him.

I said nothing about whether or not the lady should purchase the insurance. She probably shouldn't, based on the facts as presented.

I merely suggested - and maybe I did a poor job of it - that calling her "obviously not too bright" and needing an "advocate" based on the limited information provided was being maybe a bit too judgmental. I don't believe that the client is required to know what is suitable or not before inquiring about it.

The agents, OTOH, should be held to a higher standard, which I believe was the intent of the post.

I could be wrong.

Oh, forget my post, I was just looking for something to post so those screens would quit popping up because I don't post often enough.

 

[Arthur Rudnick]

originally posted by wln417

Perhaps it was my fault. Perhaps Mr. Rudnick can read things into ltcadviser's posts that are not obvious to someone who is not as familiar with him.

I said nothing about whether or not the lady should purchase the insurance. She probably shouldn't, based on the facts as presented.
I merely suggested - and maybe I did a poor job of it - that calling her "obviously not too bright" and needing an "advocate" based on the limited information provided was being maybe a bit too judgmental. I don't believe that the client is required to know what is suitable or not before inquiring about it.
The agents, OTOH, should be held to a higher standard, which I believe was the intent of the post.
I could be wrong.
Oh, forget my post, I was just looking for something to post so those screens would quit popping up because I don't post often enough.

When dealing with seniors (65+) an agent must be very careful about what products to (or not to) recommend. And, that's why E&O insurance is a must have.

Maybe my choice of "not too bright" was a little stretch, but if I ran into this type of case and in spite of my recommendation for her not to purchase either product, she insisted, I would request a sit-down with her and an adult child, if available.

Her decision to go ahead with the purchase would lead me to believe that she's not "well educated" (is that better than "not too bright?) on financial matters.

I would also have her sign a document stating that although her agent recommended she not purchase either product, after doing her due dilligence, she felt it was appropriate.

There are too many stories out there about agents being sued for selling someone a product that was inappropiate for their needs.

I'm not sure that I was reading anything into ltcadviser's posts that were not plainly explained by him in his first post. Sometimes in a selling situation, the best move for an agent is to just pass and walk away.

Jack,
Comments?

 

[ltcadviser]

originally posted by wln417



I'm not sure that I was reading anything into ltcadviser's posts that were not plainly explained by him in his first post. Sometimes in a selling situation, the best move for an agent is to just pass and walk away.

Jack,
Comments?

"Selling situation"

That is the problem.

How about everyone starts to remove the sales pitches, and start speaking with our clients in a true consultative fashion.

The actions of my fellow agents really worry me.
Just seeing a lot of evidence these days of used car salesmen masquerading as insurance advisers.

The lady contacted me only because the ACSIA agent applied her to Life Secure and she was declined. Curious if he even did a fact finder?

A 68 year old with $80,000 should not buy LTC insurance. Period.
You are right, Arthur. Any reasonable policy for her is $3000-$4000 year, minimum.

I am not sure she understood or appreciated it when I told her she should not buy any long term care insurance policy.

But I told her this fact, nonetheless.

And don't get me started on her "financial adviser."