Traditional LTCI Vs. LTC Annuity

[Mr_Ed]

Intersting points and counter points. However, for the vast majority of seniors, qualifying for LTCi is a long shot at best, which makes purchasing a stand alone policy nearly impossible. And for those that do, why would they buy a single premium LTC product and lose access to available funds in case of other likely emergencies?

Personally, I believe the PPA Annuity and Annuity/Life products that provide LTC benefits to make more financial sense for the average Senior. They appear to have easier qualifying, leave funds available for other use and DO NOT have the potential for future rate increases. Add to this the ability to make transfer/exchange of Qualified AND Non-qualified accounts into a leveraged Living benefit.... you have the makings of an excellent hybrid product.

One note, look for products that do not exclude benefits for cognitive impairment.

These new products should be a boom for all educated annuity producers. These products will make for a great niche in the Senior Seminar Market, at least I think it will for me.

ya know... this has got me thinking.
very few people make large claims on their homeowner's insurance. think of all that money that is just wasted in homeowner's premiums... and they get NOTHING in return.

maybe they should develop some type of annuity/homeowner's insurance combination product.

this way, if you never make a claim on your homeowner's, at least you don't lose all that money you spent in premiums.

i'd say a $100,000 deposit into one of those products should be enough to cover up to $300,000 in home value, wouldn't you say?... maybe even $400,000 in home value.

these combo annuity/homeowner's products will sell like ice cold cokes on a hot summer's day. isn't this a brilliant idea?

 

[arnguy]

NADM, in the Philadelphia and nearby New Jersey area The Philadelphia Contributionship for the Insurance of Houses from Loss by Fire that was founded in 1752 by Benjamin Franklin (the oldest property insurer in America) offers Perpetual Insurance on Dwellings. The homeowner makes a deposit in lieu of paying annual premiums. If the policyholder cancels, they get their deposit back less any claims paid. The company is rated A+ by A.M. Best.

 

[CALTCAgent]

since Genworth just discontinued sales of their annuity LTC product due to poor sales, I wonder how the other carriers are doing.

Else, your statements about easier to qualify for and no rate increases are both incorrect. The cost of the LTC rider can increase, which can result in lesser benefits than originally planned on some of these products, and the UW is still pretty strict in general....with exceptions of course.

Do you know of where there are any "exceptions" to the "strict in general" underwriting?

(assuming you mean same as traditional stand alone LTC)

I am looking for where they might be a decline for stand alone LTC, but be accepted by a hybrid product.

I have found hybrids underwriting guidlines to be more restrictive than stand alone LTC along with less clear underwriting guidlines, but some hybrids marketed to the agent as the opposite.

I believe OneAmerica and Annuity Care come to mind. They pitched it to me to at first be "relaxed" after talking for an hour with rep, oh its not "relaxed" but we got you interested. I also don't like the faxing client health history quote form then getting a response within 4 hours back and forth hassle.

Thanks!

 

[yankee466]

Do you know of where there are any "exceptions" to the "strict in general" underwriting?

(assuming you mean same as traditional stand alone LTC)

I am looking for where they might be a decline for stand alone LTC, but be accepted by a hybrid product.

I have found hybrids underwriting guidlines to be more restrictive than stand alone LTC along with less clear underwriting guidlines, but some hybrids marketed to the agent as the opposite.

I believe OneAmerica and Annuity Care come to mind. They pitched it to me to at first be "relaxed" after talking for an hour with rep, oh its not "relaxed" but we got you interested. I also don't like the faxing client health history quote form then getting a response within 4 hours back and forth hassle.

Thanks!

The one beauty of some of the annuity products, like One America, is that they will make a decision based on the questions on the application and the phone interview. So, if no medical records are pulled, there are no surprises. I lose most of my LTC business to what is in the medical records that the client either knows nothing about or may be in denial about. Else, the UW rules vary so much from one carrier to the next, it is a hard answer. When you go with a full life/LTC plan, then you are much more subject to full medical records, as there is a paramed exam et all. Hope this helps.

 

[CALTCAgent]

The one beauty of some of the annuity products, like One America, is that they will make a decision based on the questions on the application and the phone interview. So, if no medical records are pulled, there are no surprises. I lose most of my LTC business to what is in the medical records that the client either knows nothing about or may be in denial about. Else, the UW rules vary so much from one carrier to the next, it is a hard answer. When you go with a full life/LTC plan, then you are much more subject to full medical records, as there is a paramed exam et all. Hope this helps.

I agree with the LTC medical records suprises, I hope one day they come up with a better system.

I think I was told with One America, they could pull an APS, I guess if any "red flags".

Do you know exactly what they ask on the phone?

If they don't have a specific script then you may still get "suprised".

Thanks

 

[VolAgent]

The one beauty of some of the annuity products, like One America, is that they will make a decision based on the questions on the application and the phone interview. So, if no medical records are pulled, there are no surprises. I lose most of my LTC business to what is in the medical records that the client either knows nothing about or may be in denial about. Else, the UW rules vary so much from one carrier to the next, it is a hard answer. When you go with a full life/LTC plan, then you are much more subject to full medical records, as there is a paramed exam et all. Hope this helps.

Hate to break it to you, but if your client is in "denial" about his/her health and fails to disclose requested medical information, you've got a problem on your hands.

 

[yankee466]

I agree with the LTC medical records suprises, I hope one day they come up with a better system.

I think I was told with One America, they could pull an APS, I guess if any "red flags".

Do you know exactly what they ask on the phone?

If they don't have a specific script then you may still get "suprised".

Thanks

They would pull a MIB, not an APS....so you need to watch your terms.

There is a standard application with all the medical questions, and there would be a cognitive phone test as we are used to on the regular LTC aps. You obviously have to start with their "ticket", which is the initial series of question that you ask to make sure they should submit the application. Last I recall, there were 13 questions. I'll assume they reserve the right to request an APS if warranted, but this is not my area of expertise.

The other poster is of course correct in that the client can get themselves in trouble if they are not truthful/complete on their medical history.

Your FMO can help you on all the details with One America and the other linked benefit plans.

 

[Mr_Ed]

NADM, in the Philadelphia and nearby New Jersey area The Philadelphia Contributionship for the Insurance of Houses from Loss by Fire that was founded in 1752 by Benjamin Franklin (the oldest property insurer in America) offers Perpetual Insurance on Dwellings. The homeowner makes a deposit in lieu of paying annual premiums. If the policyholder cancels, they get their deposit back less any claims paid. The company is rated A+ by A.M. Best.

how much is the deposit?
what is the maximum benefit?

 

[arnguy]

how much is the deposit?
what is the maximum benefit?

You should access their website for that information. Some years ago I had a client that had that type of policy. I believe the deposit was based on the value of the property, but I am not certain exactly how his deposit was computed. I do remember that he did have a claim of $36,000 that was paid quickly.

 

[CALTCAgent]

They would pull a MIB, not an APS....so you need to watch your terms.

Your FMO can help you on all the details with One America and the other linked benefit plans.

If "your FMO" could help you with the "details" I would not be here, lol. Fact is most FMO's are not that helpful with the "details", hence looking for real world experiences and not someone that has never sold before and/or not as familiar with the product as necessary, lol.