We Need To See The Numbers/Premiums First......

Discussion in 'Long Term Care Insurance Forum' started by CALTCAgent, May 30, 2017.

  1. yankee466
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    yankee466 Well-Known Member

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    yes...but so is paying into a traditional plan for 20-30 years before you use it.....they still have a lot of your money, albeit a little at a time.
     
  2. bluemarlin08
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    bluemarlin08 Well-Known Member

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    Don't you have lost opportunity cost on traditional policies plus the "loss' of the non guaranteed premium?
     
  3. Mr_Ed
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    Mr_Ed Well-Known Member

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    I'll do the math for you later.
    I don't have time now.

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    "non guaranteed premium"...gimmeabreak.

    #1) Some hybrids are NOT guaranteed, were you aware of that?

    #2) are you aware that for LTCi policies purchased in TN since 2004, in order to get a rate increase the insurance company has to decrease their profits?
     
  4. bluemarlin08
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    bluemarlin08 Well-Known Member

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    I only use the guaranteed. Back to my question though, aren't those lost opportunity costs? Do you tell your clients about potential rate increases?
     
  5. Mr_Ed
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    Mr_Ed Well-Known Member

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    of course I tell them about potential rate increases....geez.
    don't you tell your clients about Tennessee's Rate Stability Regulation and how it penalizes an insurance company if they have a rate increase?
     
  6. bluemarlin08
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    bluemarlin08 Well-Known Member

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    I tell them rates are not guaranteed. Are you not going to answer my initial question? Geez, as you say.
     
  7. Mr_Ed
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    Mr_Ed Well-Known Member

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    Assuming a 2% interest rate, the opportunity cost of a $100,000 single premium is $2,000 per year EVERY YEAR!

    That means the $100,000 single premium has the same opportunity cost as a policy that has a $2,000 annual premium.

    The difference is when you need to make a claim. With the traditional, you pay the first 90 days. With the single premium hybrid, you're paying for the first 2 to 3 years.

    And, in most cases, the traditional policy is going to have a higher monthly benefit, a better inflation benefit, and a longer benefit period.

    And if interest rates go up, the opportunity cost of that $100K single premium will be even worse.

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    don't you tell consumers about Tennessee's Rate Stability Regulation and how it penalizes an insurance company if they have a rate increase? :biggrin::biggrin::biggrin:
     
    Last edited: Jun 1, 2017
  8. kpbdy99
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    kpbdy99 Active Member

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    Just give them a sample plan, show them the cost. If they're serious shoppers, they already have a rough idea, and they'll still talk to you. If they pitch a fit at the sample, they were never going to buy anything anyway, and it's better you know that now than after meeting with them two or three times.
     
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