Traditional LTC or Hybrid

[PrivClientSG]

Let's say you have a client -- male, a young age 67, very active, vibrant, athletic, single (divorced), in a long-term relationship, net worth about $3mm ($2mm of investments, $500k in his IRA, and a $500k home). He's still working. Wants to continue, for as long as he can as he enjoys what he does (he's an attorney, solo). Doesn't really have an exit strategy. He has two kids who live in other parts of the country. Longevity runs in his family. His mother is alive at 95 and his father made it to 93.

After all the data gathering, etc. -- you determine he does warrant some type of LTC coverage. What factors are you looking at to determine whether you start with a traditional LTC policy, or one of the hybrid policies? If you land on the former -- what carriers are you looking at today? I feel they are rather out of favor as lifetime benefits are no longer feasible, guaranteed premiums no longer exist and if they do they are not feasible, and the product has seemed to become somewhat antiquated, both by coverage and cost. However, if you want traditional LTC coverage -- what carriers and what coverage are you looking at? Five year benefit? Home health care? Cost of living/inflation protection? And what else?

On the other hand, if you look at hybrids, same questions, what carriers and what coverage are you looking at? I am going to hand this off to an associate, however, I'd still like to be educated. Thank you very much in advance. I greatly appreciate the insight, perspective, and expertise.

 

[ltcadviser]

Probably start with Securian (benefit periods of 6 years, 7 years, or 8 years) for a hybrid, or OneAmerica for an Unlimited benefit period; Mutual of Omaha for a traditional policy. Have your client buy as much monthly benefit and inflation protection as he wants. Securian and Mutual of Omaha will give him a Couples discount for the relationship he is in.

 

[yankee466]

You said he was in a long term relationship. If it is with a female, she has a much higher chance of needing LTC than he does statistically (aka men don't like to play bingo).

Either way, perhaps you should then consider a shared care policy with MoO, or maybe a joint hybrid like Nationwide or OneAmerica. Let's hope everyone is healthy enough to qualify for all options.

Single men are least likely to purchase any LTC on themselves in general.

 

[LostDollar]

You said he was in a long term relationship. If it is with a female, she has a much higher chance of needing LTC than he does statistically (aka men don't like to play bingo).

Either way, perhaps you should then consider a shared care policy with MoO, or maybe a joint hybrid like Nationwide or OneAmerica. Let's hope everyone is healthy enough to qualify for all options.

Single men are least likely to purchase any LTC on themselves in general.

Caveat, NOT an agent.

Relationships can change.

As an example, see current thread about a girlfriend from long, long ago inheriting a $1M retirement plan.

As a second example, see prospect's own life.

Is setting up a long term payment obligation for joint life coverage really wise advice for prospect?

And what happens to prospect's coverage if this relationship does terminate?

Single men are least likely to purchase any LTC on themselves in general.

In my (non-agent) opinion, this would not necessarily mean they don't have a need for it. My understanding of LTC costs and coverage options is almost non-existent, but it seems to me like if this hybrid coverage combines funding for possibly needed LTC costs with a possibly useful life insurance payout, prospect could be presented with an option for managing his funds to deal with his own possible health needs first and then pass on some money to his kids if it is not needed for his own care.

In my (non-agent) opinion, if some type of coverage is desired for the relationship partner, prospect would be wiser to handle that in a separate manner, even if it costs him more money.

 

[PrivClientSG]

Probably start with Securian (benefit periods of 6 years, 7 years, or 8 years) for a hybrid, or OneAmerica for an Unlimited benefit period; Mutual of Omaha for a traditional policy. Have your client buy as much monthly benefit and inflation protection as he wants. Securian and Mutual of Omaha will give him a Couples discount for the relationship he is in.

What do you mean "traditional" policy? Traditional LTC policy, and not a life insurance based/chassis policy? Thanks in advance.

 

[ltcadviser]

Yes, Mutual of Omaha underwrites traditional LTC insurance. Securian and OneAmerica underwrite hybrid Life/LTC policies. Any of these underwriters can be reasonable options for 67 year old males. Lincoln Moneyguard too probably.

 

[Lloyds of Lubbock]

Years ago my wife came home from networking group and said we need LTC.
I am uninsurable, she was in her late 40's at the time.
We took out a policy from one of her friends and within 3 years the premium was 25% more.
While I am pretty sure that rates did not go up based on claims of people in their 40's, obviously her increases were helping out with older ages.
WE decided to cancel, ended up taking a Guardian l121 with an LTC rider.
If she doesn't need the LTC, she can access the cash the increases are extremely linited and seemed like the best solution all around

 

[PrivClientSG]

Yes, Mutual of Omaha underwrites traditional LTC insurance. Securian and OneAmerica underwrite hybrid Life/LTC policies. Any of these underwriters can be reasonable options for 67 year old males. Lincoln Moneyguard too probably.

Got it. Thanks. The traditional products now have returned to reality -- both premium and benefit-wise, LOL. I don't touch this myself, and used to have someone on-staff who did, but they retired, and I just haven't replaced him.

I haven't looked at a traditional product myself in a very long time. Premiums were increasing, and big time! Benefits were being reduced, and big time! All a result of poor product pricing and assumptions. The hybrid products seem to fill the need, right? However, being that they are built on a UL-chassis, does that cause any concern(s)? Thanks.

 

[PrivClientSG]

When you look at LTC riders on WL policies -- any concern(s) about the "cost" of the rider(s) and/or the "drag" on policy performance? Thanks.

 

[ltcadviser]

Got it. Thanks. The traditional products now have returned to reality -- both premium and benefit-wise, LOL. I don't touch this myself, and used to have someone on-staff who did, but they retired, and I just haven't replaced him.

I haven't looked at a traditional product myself in a very long time. Premiums were increasing, and big time! Benefits were being reduced, and big time! All a result of poor product pricing and assumptions. The hybrid products seem to fill the need, right? However, being that they are built on a UL-chassis, does that cause any concern(s)? Thanks.

To me nothing has changed in the arena except cost of insurance. We can write traditional policies today exactly the way we wrote them 28 years ago. Just costs more premium today. Most of my clients buy the hybrid plans today, they are certainly more popular with my clients but different agents attract different clients.
The UL chassis is irrelevant for this arena. Benefits are guaranteed and non cancellable.