Mutual of Omaha Joins The Party

[Mr_Ed]

Great posts guys..................

I think about 11 years ago, it was I that started this thread about Mutual of Omaha raising their rates. So, I feel that I'm entitled to put in my 2 cents (for whatever it's worth).

There are dozens of LTC policies available for sale throughout the country. In my opinion, there is no such thing as a "BAD" policy. 95% are good policies and 5% are excellent. "Bad" policies aren't sold and eventually disappear.

We all know that a good LTC Specialist can take any 2 policies, rip them apart and come up with a difference between the two.

If you walk into a home and the prospect says "I met yesterday with another agent and I'm thinking of purchasing a policy from him with company 'A'. Company 'A' has a good policy doesn't it?"

Everyone of you (including me) will reply: "Company 'A'? Yes they offer a good policy, but let me show you why company 'B' is better."

Your company 'B' may be less expensive or may have a bell or whistle that company 'A' doesn't have. Or, they pay dividends, or they have a zero day EP.

Is a Chevy salesman going to tell you to buy a Volvo because Volvo is better?

So, my point is that to nit-pick a policy when at the end of the day it's still a "good" policy does not really prove much.

Just like the bantering going on here with Pru vs NWM. Can anyone of you look at either policy and say that one is a "Bad" contract? Probably not.

Yes, NWM is more expensive BUT............. We have a history of paying dividends. Is that a positive or a negative? According to these posts, it could be both depending on which policy you're trying to sell.

For me, if I have 3 good policies and the contracts are close,
I would usually recommend the least expensive one, unless of course health is a factor.

And........................
That's what I think about that!

Arthur, you know as well as I, that there are a lot of situations where the policy in question can cost anywhere from 50% to 100% more than comparable benefits from other LTC insurers.

Chuckles has stated that "strength of contract" (or, as he put it: "a contract that is designed to pay claims") is more important to him than the actual premium.

I'm simply asking for him to defend his statements.

His first attempt at describing the superior "strength of contract" was disappointing. He mis-stated the Pru EP and Waiver of Premium. The monthly vs. daily is a non-issue since it can be added as a rider to the Pru policy for about 4% more premium.

Essentially, his only argument to defend "strength" of contract was:

1) We can offer "Lifetime/Unlimited" and Pru can't.... and
2) We include upgrades (which is not even guaranteed.)


It would be nice if he could provide a little bit more substance to defend his "strength of contract" statement.
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5: Retroactive Contract Benefits (Benefit of being a Mutual)

NML: Offers any new benefits/changes in contracts to not only contracts sold from that date, but also to older series contracts already in place.

Pru: Stuck with what you bought.

Example: Let's use the Monthly vs. Daily benefit amount here. NML used to have a daily limit and once we saw that it was in the better interest of our clients to have a monthly benefit we changed it for our new contracts. Now if it is in the better interest of our clients what happens to the contracts that we sold with the daily benefit. Pru would say "To bad, you are stuck with what you bought." NML says "We are mutual and want to make sure we treat all our LTC clients fairly." We will offer to exchange your older contract to the newer one with better options/benefits without underwriting involved. By the way Pru not only doesn't offer this to it's past series holders, it raised both series 1 and 2's premiums. Thanks for buying our contracts, here is what you get for being a loyal customer.

Some pretty big differences in my mind that could lead to all your "saving" from the lower premium being for naught.

What you've described here is not in the sample policy you provided.

So, out of 5 points:

1) You mis-stated the Pru EP.
2) You mis-stated the Pru Waiver of Premium because you misunderstood Pru's EP.
3) The Monthly Benefit is available with the Pru policy for a lot less premium than the NWM, so this feature does not prove your point.
4) You're correct about this point: Pru no longer offers the Lifetime BP for the LTC3 policy series. But, we can have 20 years of shared benefits and about 50% more Monthly Benefit than a lifetime bp with NWM.
5) This "upgrade" thingy that you've described is not in the NWM policy.


You're only batting .200, chuckles.

 

[GreenSky]

In the past few months I have decided to refocus my practice into LTC. i'm very comfortable selling Medicare products but almost a newbie on LTC. That's why i studied and received my CLTC designation to get a jump start Until Arthur's post I was concerned that I would not recommend the absolute best product. However, it appears that there is nothing that is "the best" and as he said, something is much better than nothing.

I like the pricing from Mutual of Omaha and the shared benefit rider. I like the Moneyguard plan for those who insist that it won't happen to them and if it does they can pay for it themselves. I like Genworth for their CA partnership product.

Both Arthur, Scott and Herman have taken time to help me and i think the most important thing they all say is rather than focusing on which policy is the best, perhaps it is better to focus on actually helping the prospective client.

Now if I could just find a way to generate some leads....

Rick

 

[Chuckles21]

So, out of 5 points:

1) You mis-stated the Pru EP.
2) You mis-stated the Pru Waiver of Premium because you misunderstood Pru's EP.
3) The Monthly Benefit is available with the Pru policy for a lot less premium than the NWM, so this feature does not prove your point.
4) You're correct about this point: Pru no longer offers the Lifetime BP for the LTC3 policy series. But, we can have 20 years of shared benefits and about 50% more Monthly Benefit than a lifetime bp with NWM.
5) This "upgrade" thingy that you've described is not in the NWM policy.


You're only batting .200, chuckles.

1. Admitted was wrong (.000)
2. Am correct in my statement, was wrong on the example. (.100 half correct)
3. Base contract is daily can add monthly for a cost. Let me ask you. Do you do the monthly rider or just write the daily???? Was again half right (.100)
4. Is a rider that adds cost for shared benefit. Also you then take benefit away from spouse who may also need it. Point remains no lifetime benefit (.200)
5. It isn't in the contract. It is just what we do. Tell you what call NML's LTC department and ask about the exchange program if you don't believe me. Fact remains that we do this for our clients and Pru has been raising their rates. (.200)

Your math is a bit off... .600

Now to get to your point of cost. From what I understand we are pretty cost comparable after Pru's cost hike on new plans. So run an illustration and post it for a single male, 55, monthly benefit of 4200 with 3% or 5% annual compounding interest, 90 day waiting period, 6 year benefit and we will compare price. I would post mine but can't until later as am not on my work computer (will be in a few hours).

 

[Arthur Rudnick]

"Arthur, you know as well as I, that there are a lot of situations where the policy in question can cost anywhere from 50% to 100% more than comparable benefits from other LTC insurers.

Chuckles has stated that "strength of contract" (or, as he put it: "a contract that is designed to pay claims") is more important to him than the actual premium.


Scott,
I hear you and you certainly have the right to call someone out when they make mistatements. And yes, premiums do vary from company to company, sometimes substantially.

But personally, if I'm offering 2 or 3 good policies and there are minor differences within each contract, my usual recommendation is to go with the lowest premium.

"Chuckles has stated that "strength of contract" (or, as he put it: "a contract that is designed to pay claims") is more important to him than the actual premium."

The strength of contract is important, (aren't all LTC contracts designed to pay claims?) but as I said previously, just about every carrier out there has a good, strong contract. And, yes the stronger (or better) the contract, in theory the more the policy should cost.

Chuckles knows that, you know that, I know that and everyone in the business knows that.

However....................
The prospect doesn't know squat!

In most cases, the #1 concern for the person you're talking with is the premiums. In 16 years in the business, I've never had a prospect ask me; "what about the strength of contract"?, but everyone asks "how much"? Because at the end of the day, if it's unaffordable, it's over!


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Chuckles,
Just out of curiousity, run me a NWM quote for a 60 yr. old couple.

Standard Health Rates
$6,000/monthly benefit
5 year benefit period
5% compound inflation rider
90-day EP
zero day EP for home care
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Rick states:

Both Arthur, Scott and Herman have taken time to help me and i think the most important thing they all say is rather than focusing on which policy is the best, perhaps it is better to focus on actually helping the prospective client.

That's because between Scott, Herman and myself, we have about 765 years between us in the LTC business.

Rick, it's always about the premiums. I'm convinced that in 90% of the cases, when someone does not purchase a policy, it's because they can't afford the premiums. They may blow smoke and give you a whole bunch of excuses, but it's always about the cost. They're just too embarrassed to tell you they can't afford it. At the end of a presentation, I've never had someone say: "Long term Care insurance? What a stupid idea".

Being from the NY metro area, I see it upfront everyday. Nursing homes around here are running $375-$400+/day. I can't sell $150/day policies like other agents. So, when I'm dealing with $250-$300 daily benefits, sticker shock is obvious.

"I like the pricing from Mutual of Omaha and the shared benefit rider. I like the Moneyguard plan for those who insist that it won't happen to them and if it does they can pay for it themselves. I like Genworth for their CA partnership product."

Every agent has their favorites. It may be the contract, it may be the underwriting, it may be the premium or a combination of all 3. Run with what you feel comfortable with but always be aware of your competition's product.

Now if I could just find a way to generate some leads...

That my friend, is the hardest part of our job.........

 

[Chuckles21]

Chuckles knows that, you know that, I know that and everyone in the business knows that.

Somethings better than nothing

Chuckles,
Just out of curiousity, run me a NWM quote for a 60 yr. old couple.

Standard Health Rates
$6,000/monthly benefit
5 year benefit period (Don't have 5 year so did 6)
5% compound inflation rider
90-day EP (have weeks not days, did 12 weeks = 84 days, close enough)
zero day EP for home care (Not an option)

I've attached the quote which shows both separate and together.

 

[CALTCAgent]

I wished more people would have a NWM quote in hand before I see them, now that would be nice!

 

[Mr_Ed]

I've attached the quote which shows both separate and together.

My bad.

I was wrong.

I thought it would be 50% higher. It's only 46% higher.

 

[Chuckles21]

My bad.

I was wrong.

I thought it would be 50% higher. It's only 46% higher.

Does that have the monthly benefit rider on it? Also not sure how up to date that software is but Pru did implement a decent rate refresh on their policies that haven't been approved in all the states yet. I do know that Michigans rate refresh took affect April 4th. Again not sure if that software reflects the raise in cost as it is not first party. Could you try running same quote for Michigan?

 

[yankee466]

I was wondering when someone would just run a Straticision quote and end the debate!!!!!! Nothing is worth the extra price. I should point out that, at least here in Georgia for my typical client, Mutual of Omaha and the lowly A rated Genworth will typically blow Prudential away on benefits for the buck.......making NWM an even more expensive choice.

If its not first about finding a good value, its then about who will allow you to get through UW relatively unscathed. For example, who allows bone density scores of -3.9 may be more important than who charges what. Maybe NWM has some sweet spots in UW? They must be good at something to make up for the ridiculous rates they charge besides just Comdex scores.

 

[Arthur Rudnick]

"I thought it would be 50% higher. It's only 46% higher".

Scott, 46% higher than what?

Chuckles,
I'm surprised. $9,320 was lower than I thought.

I'm wondering why the WI DOI allows an illustration that shows dividends payable 40 years down the road when dividends are never guaranteed. In fact, it says as much in your illustration. Obviously it's allowed and it's a good selling point. A little bogus, but a good selling point.

In comparing apples-to-apples, here's what NWM is up against in WI:

Pru: $7,165
Genworth: $6,420
Mutual of Omaha (with a 35% cash benefit option): $7,229

Assuming that all offer a good policy (and they do) the only thing NWM has to hang their hat on are dividends down the road, that may or may not reflect the actual numbers in your illustration. But, your prospect doesn't know that because an illustration is pretty convincing.

So, I ask you this: Why should someone purchase a NWM policy for any reason other than the projected dividends?

That's assuming that your prospect also had the benefit of looking at the other 3 carriers listed above?