Why (mostly) Everyone Is Buying Hybrid LTC Policies Today
- Thread starter ltcadviser
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- Thread starter
- #12
Securian, Nationwide, OneAmerica, Lincoln, Pacific Life, Brighthouse.
Is the Securian that you use a IUl with chronic illness on it?
- Thread starter
- #14
Never use that.
We use Securian SecureCare hybrid LTC.
Securian Minnesota Life SecureCare Hybrid Long Term Care Insurance Review - Cash Is King - LTC Partner
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New-business (and since about 2014) Traditional LTCI premiums will NOT, cannot increase looking-forward to the same degree and at the same high rates as has been applied to old-business in-force premiums. ALL of the pricing mistakes of the old policies - that are still being corrected-for - have already been priced into, baked-into new-business premiums. To suggest that new T-LTCI premiums, looking forward, will have the same risk of and level of rate increase as in the past is wrong, irresponsible, and shows a profound lack of understanding (or care) regarding how the pricing fundamentals have changed as well as the impact of Rate Stability Regulations now active in 41 states.
People think of they don't use the traditional LTC insurance, they are "losing it" (the premiums they've paid).
Of course, that's not accurate because they had coverage. You don't "lose" your car insurance premiums or home insurance premiums if you never use those policies.
However, the difference is that people drive their car and live in their home every day.
Even with regular health insurance... you go to the doctor at least once per year, maybe more. Maybe you need some medication, etc.
With LTC, people have a very difficult time seeing themselves ever needing care. And many seriously say they would rather just die if they ever got like that.
So the hybrid LTC does at least give them their premium (and maybe more) back.
And making your own hybrid is not guaranteed because they may not qualify for a GUL.
A jump in premium is simply not acceptable with any insurance policy that's not on a year-to-year basis.
LTCi a tough sell. Might be the most difficult insurance to sell.
I agree that it's crucial to financial planning because if someone doesn't qualify for Medicaid, it can wipe them out.
Of course, that's not accurate because they had coverage. You don't "lose" your car insurance premiums or home insurance premiums if you never use those policies.
However, the difference is that people drive their car and live in their home every day.
Even with regular health insurance... you go to the doctor at least once per year, maybe more. Maybe you need some medication, etc.
With LTC, people have a very difficult time seeing themselves ever needing care. And many seriously say they would rather just die if they ever got like that.
So the hybrid LTC does at least give them their premium (and maybe more) back.
And making your own hybrid is not guaranteed because they may not qualify for a GUL.
A jump in premium is simply not acceptable with any insurance policy that's not on a year-to-year basis.
LTCi a tough sell. Might be the most difficult insurance to sell.
I agree that it's crucial to financial planning because if someone doesn't qualify for Medicaid, it can wipe them out.
- Thread starter
- #17
Very true.
How do you answer the concern from a potential client when they ask about possible rate increases (for traditional LTCi)?
- Thread starter
- #19
There are many factors today that create premium stability. The rate stabilization guidelines today which are adopted by 41 states no longer allow underwriters to request rate increases due to loss ratio thresholds. Today, a rate increase may only be allowed if it is necessary to pay claims. The premium increase will not go to profits. Additionally, the pricing today is completely different. The margin for error is baked into the current rates. Current policies have gender-distinct pricing today. The low lapse rates and low interest rates are factored in to the rates. Could an increase still occur? Sure. However, the repeated rate increases requested on the older blocks of business prior to the rate stabilization guidelines will not occur in this current environment. That said, the concern your client will express to you is valid. I find that most people will still want guarantees. The traditional policy rate increase risk can be eliminated entirely through single premium traditional policies; or significantly mitigated through 10 Pay plans.
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