WSJ article about NYL "simplified" LTC product

Aug 30, 2018

  1. Brian Anderson
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    Brian Anderson Executive Editor

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    Link below to Leslie Scism's Aug. 29 Wall Street Journal article about New York Life pitching a new "simplified" LTC product to middle market...
    Couple of excerpts:

    New York Life Insurance Co. is trying to find a new way to sell a product that some middle-class customers don’t want to buy anymore.
    The company said it recently started offering a simplified version of long-term care insurance that makes the coverage easier to understand and more predictable in cost...
    The new offering from New York Life is one of very few long-term-care policy introductions of the past five years, according to insurance-industry organizations, consultants and academics. It is designed to appeal to middle-class consumers. The longtime seller of such coverage will continue offering its existing stand-alone product...
    The new policies from New York Life will generally cost at least $100 to $150 a month per person, depending on age and designated benefit level. As much as $500,000 in future payouts for a couple is available. The cost will generally be in the midrange of top-selling products, according to industry figures.
    The insurer is scrapping use of “elimination periods,” which are typically 90-day waiting periods before the policies pay out. Instead, it is using a one-time deductible. A deductible is a specified amount of money that a policyholder is responsible for paying.
    The “elimination period” concept can be off-putting to consumers because the amount they would need to pay isn’t known when they are purchasing a policy.


    New York Life Tests New Pitch for an Unpopular Insurance Policy
     
  2. ltcadviser
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    ltcadviser Guru

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  3. kpbdy99
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    Nothing either new or revolutionary here, and it's still NYL, so it's still going to be expensive.
     
    kpbdy99, Sep 10, 2018
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  4. wc2624
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    This article doesn't even describe the product correctly.
     
    wc2624, Oct 3, 2018
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  5. kpbdy99
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    kpbdy99 Expert

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    Selling against will be easy - not that I ever find myself up against NYL. It has an increasing deductible - the deductible is 3, 6, 9 or 12 X the maximum monthly benefit, not a fixed number. And, if you have inflation protection, that applies. So, if I buy a $6,000 monthly benefit at age 60, with 3% compound inflation, and a "6X" deductible, my deductible is $36,0000. But at age 84, my daily benefit would be $12,000, and deductible would be $72,000. What if you're only getting 2-3 hours/day of home care?? It's going to take a LONG time to satisfy that deductible.
     

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    kpbdy99, Oct 4, 2018
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  6. ltcadviser
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    Monthly benefit would be $12,000, not daily benefit. But agreed, would be much better to have a calendar day EP with no out of pocket expenses required to satisfy the elimination period.

    This design is structured to benefit the insurance company, not the insured.
     
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