There are so many LTC companies out there. I was just wondering, what are your favorites and why?
I am focusing on Business Owners DI and think that this would be a good side to offer once they are clients. I am not really looking for a senior product probably going to in the age range of 35-55. Middle to upper class.
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Excalibur Benefits
Larry Roberts
Larry.Roberts(at)Excaliburbenefits. com
I am no expert either but would like to have it to offer to my existing clients. I know that they are all held to a model so to speak but I also know there are some better companies that would be better suited to LTC just like DI and Life.
The top LTC companies in my opinion are (in no particular order) Allianz, Genworth, John Hancock, Prudential, and Transamerica. Yes there are others (Mutual of Omaha, MetLife, MedAmerica, LifeSecure, etc.) but I would consider them second tier often with a specific niche.
They all have their good and bad points and it comes down to how much of an expert are you in LTC or do you want to be. If you are looking for simple products most now have "simplified" products that essentially limit the rider choices to those most often chosen. If there are specific things your clients are looking for like international coverage or cash benefits you can pick the carrier with those features or rely on your FMO to help identify the best options for a particular situation like we often do for our agents.
There are combo products like MoneyGuard or Genworth's TLC but I think you sometimes end up with a watered down version and these are better fit's with those that have a pile of cash sitting around that you can put to use or another life policy you can convert.
If you want more detailed info. feel free to give me a call or shoot me a PM.
Graham,
That is the kind of answer I was looking for. I want to have this as an add on to my clients I sell DI too. I was thinking John Hancock so maybe Hancock and Genworth.
Graham,
That is the kind of answer I was looking for. I want to have this as an add on to my clients I sell DI too. I was thinking John Hancock so maybe Hancock and Genworth.
Thanks
No problem, if you would like to get appointed with either or both let me know and I can get you the information.
Graham,
That is the kind of answer I was looking for. I want to have this as an add on to my clients I sell DI too. I was thinking John Hancock so maybe Hancock and Genworth.
Thanks
I hope you don't me chiming in a little bit late.
I also tend to like Hancock and Genworth, but I compare pricing to several others.
For built-in features, Genworth Privileged Choice is the best that I have seen - no Elimination Period for home care, more flexibility on who the home care provider can be, no claims offset is used in computing the increase in benefits under the inflation rider. etc.
Having said that (and I hope I don't start an argument here) I must admit I got a bit nervous when the stock went under a dollar.
My personal opinion is that the cash option in MedAmerica is more than a niche market, it is pricier than reimbursement, but if the insured has a business and can deduct the premium, that bite isn't so bad.
I work with one particular immigrant group that really favors the cash benefits, for the flexibility and price advantage in paying for home care as well as for international benefits. If you are talking nursing home, the cash benefit doesn't seem to offer any advantage (but nobody wants to talk about nursing homes anyway.)
Double digit.
Can't you just telll everyone what the real amounts were. it's public info.
Don't spin it. just say it straight.
Let's use real numbers aobut the rate increases:
Gen's was between 0% and 12%. (depending upon state and policy series)
JH's was between 0% and 18%. (depending upon state and policy series).
Gen's was on less than half of their policyholders.
JH's was on a little more than half of their policyholders.
Gen has been selling ltci for 35 years.
JH has been selling ltci for 22 years.
One rate incraese in 35 years isn't too bad for Gen
One rate increase in 22 years isn't too bad for jh.
Just out of curiousity, how long has mm or nwm been selling ltci?
(i'm sure you don't know the answer, so i'll just blurt it out for you: 11 years and 9 years).
Consideirng this is a long-tail insurance product, you would hope that there would be no rate increases in the first 10 or 15 years. Their first batch of significant claims are probalby just starting to be filed now.
When mm or nwm haev been selling ltci for 22 years or 35 years with no rate increases, than please come back and make your arguement. until then your comparing the seasoned vets to the newer players.
And please, in the future if you're going to "sell the rate increases" (or lack thereof) like you told the others to do, please be honest about the amount of the rate increase and how long jh and gen have been selling ltci and how long your company has been selling ltci.
Lenght of time in the market is of graet importance when looking at rate stability.
I'm not against someone tryign to sell the policies that they are contractually obligated to sell. but do it by emphasizing the strength and benefits of that policy and that company.
Do not try to sell your policy by putting down another comapny or policy. that's just plain wrong.
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10 hours later and no reply from volagent.
Just a pm critcizing my typos.
And more ad hominem attacks.
I'm sorry i don't type well.
He/she obviously can't refute my arguements.
Volagent inssits that he/she is not a captive agent.
Why would an independent agent "recommend" to a client to buy an ltci policy that is usually priced 40% higher than the 2 leading companies? so that the client can get a 2% dividend every year? yeah that makes sense.
Has anybody found that barf bag yet? pass it over. quick. oops. too late.
Last edited by GonnaFlyNow : 09-04-2009 at 09:05 AM.
Reason: Posts merged: no response from volagent, just a pm attacking my typing.
double digit.
Can't you just telll everyone what the real amounts were. it's public info.
Don't spin it. just say it straight.
Let's use real numbers aobut the rate increases:
Gen's was between 0% and 12%. (depending upon state and policy series)
Isn't 10-12% a double digit increase? Vol could have clarified a bit, but you flat out declined to state there were actual increases.
JH's was between 0% and 18%. (depending upon state and policy series).
See above.
Gen's was on less than half of their policyholders.
JH's was on a little more than half of their policyholders.
Question: Did Genworth and JH increase rates on existing policy holders? Yes or no. Let me pose it to you this way: If you got on a plane and the pilot announced there is a 50% chance the plane lands safely, do you stay on?
Gen has been selling ltci for 35 years.
JH has been selling ltci for 22 years.
Pioneers in the industry to be sure, but part of the reason other companies stayed away was because there was no accurate way to price LTCi.
One rate incraese in 35 years isn't too bad for Gen
One rate increase in 22 years isn't too bad for jh.
I don't know about you, but my clients want ZERO rate increases.
Just out of curiousity, how long has mm or nwm been selling ltci?
(i'm sure you don't know the answer, so i'll just blurt it out for you: 11 years and 9 years).
These companies had the foresight to stay away from a market they knew they couldn't price accurately.
Consideirng this is a long-tail insurance product, you would hope that there would be no rate increases in the first 10 or 15 years. Their first batch of significant claims are probalby just starting to be filed now.
When mm or nwm haev been selling ltci for 22 years or 35 years with no rate increases, than please come back and make your arguement. until then your comparing the seasoned vets to the newer players.
Why does Genworth and other LTCi players have premiums that are 40% less than the mutuals? It's not because they are working off different data. It's because they are trying as best they can, to buy business. Put another way, the mutuals have premiums that are higher than the competition because they don't need LTCi to maintain operations. They are life insurance companies FIRST. Therefore, they don't want increases on existing policyholders and price their products accordingly.
And please, in the future if you're going to "sell the rate increases" (or lack thereof) like you told the others to do, please be honest about the amount of the rate increase and how long jh and gen have been selling ltci and how long your company has been selling ltci.
Lenght of time in the market is of graet importance when looking at rate stability.
I agree, which is why a professional agent gives their client the choice. I write some business with the mutuals, and some with the stock companies. As long as the client knows what the risks are of going for the lower-premium policy, that's all that matters.
I'm not against someone tryign to sell the policies that they are contractually obligated to sell. but do it by emphasizing the strength and benefits of that policy and that company.
Do not try to sell your policy by putting down another comapny or policy. that's just plain wrong.
I agree. Mutuality and not seeing rate increases are big selling points when positioning companies like Mass Mutual and NWM. I don't denigrate companies like Genworth, but it is telling that the stock traded below $1 for some time, have had rate increases on significant blocks of business (I consider 50% of policy holders significant - don't you?), and still are way below the competition in pricing.
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10 hours later and no reply from volagent.
Just a pm critcizing my typos.
And more ad hominem attacks.
I'm sorry i don't type well.
He/she obviously can't refute my arguements.
Volagent inssits that he/she is not a captive agent.
Why would an independent agent "recommend" to a client to buy an ltci policy that is usually priced 40% higher than the 2 leading companies? so that the client can get a 2% dividend every year? yeah that makes sense.
Has anybody found that barf bag yet? pass it over. quick. oops. too late.
For what its worth, YOU sound like the captive agent, raising the flag for Genworth against an onslaught of haters. Are you a career agent for them? I know their agents can write with 5 other carriers, John Hancock included. I know they are not allowed to write Mass Mutual or Guardian, so I can see why you would be so adamant about NOT using a mutual insurer's product. So, fess up GFN. Admit you are only allowed to sell certain LTCi products so we can fully understand your position.
I don't know about you, but my clients want ZERO rate increases.
Why does your insurer's application state:
"The company has the right to increase premiums on this policy form in the future."
Why do all of your applicants have to check a box that states,
"I understand that the rates for this policy may increase in the future."
Why do all of your applicants have to check a box that states whether they have consider if they could afford the policy if the premium went up by 20%?
Why does your insurer's outline of coverage state:
"premiums can be changed" for this policy.
Why are you selling a policy that can have a premium increase? shame on you! your statements are awfully hypocritical. Out of your mouth you're telling consumers to buy your policy because they want ZERO premium increases. Yet, you have them sign paperwork that clearly states that they can have premium increases. you need to find yourself a good non-can ltci policy so that you can be honest with yourself.
If there is a non-can LTCi policy out there, you better believe I'd be presenting it first. Since we both know that doesn't exist, I'm going to repeat what I've stated time and time again: NEVER do I state that the mutual company's policy will never see an increase in premium. In fact, I let them know there is a chance it will go up. However, I state there is, in my opinion, a much greater chance a similar policy from Genworth will have their premiums increased. Why? History bears that statement to be true. Yes, I know the mutual companies are late to the party. All I can go off of is the data in front of me. However, the mutual companies purposely charge more premium because a) they don't want to raise rates on existing policy holders, and b) they realize the risk of this happening is high.
By the way, since you are such a stickler for disclosure, how often do you mention to your clients that:
Genworth raised their premiums on over 50% of their policy holders,
Nearly went bankrupt,
Begged for TARP money,
Is such a poorly-run company that GE (!) of all companies couldn't see their way to salvage it and thusly sold it right quick, and
Has a rating so low that some agents are not even allowed to use it with their clients.
Just curious. No need to respond in a PM, please present your case to the group. I'm a big boy, and I can handle what you dish out.
I've specialized in LTCi since 1995. I've been both a "captive" (first 3 years in the biz) and an "independent" (last 11). I'm licensed in over 40 states.
As an independent agent who is appointed with both "stock companies" and "mutual companies", I've placed about 15% of my business with "mutual companies".
I think it's disingenuous to say that Genworth or John Hancock are "buying" business by having premiums that are lower than the mutual insurers mentioned in this thread.
Assuming that all actuarial data is the same (which it isn't), and assuming that all investment returns are the same (which they are not), there are a lot of other factors that go into pricing LTCi policies.
Just a few of those factors are:
Overhead
Cost of distribution
Cost of development
(not to mention the "profit margin").
First, I submit to you that an insurer that has one million LTCi policyholders has a much lower overhead expense per policy than an insurer that has 100,000 LTCi policies. That's indisputable.
Secondly, I think it is a lot cheaper to distribute policies through independent producers who pay their own expenses (which is Hancock's primary method of LTCi sales), rather than distributing through statutory employees in a career agency system (upon which most of the mutuals rely for the bulk of their distribution).
Lastly, the cost is enormous to file policies with each state DOI and getting the marketing and compliance materials approved. That cost is divided amongst the new policies which are sold. The bigger LTC insurers can divide that cost amongst the 100,000+ policies that they sell each year. Others are dividing that cost between the 1,000 to 10,000+ policies that they sell each year.
The economy of scale applies to many industries, but it especially applies to LTCi.
Finally, to demonstrate my point about these "other factors" which contribute to the actual LTCi premiums, two of the leading mutuals mentioned in this thread use the exact same actuary and TPA to develop, underwrite, and service their LTCi products. Those 2 products, in some cases, vary in premium by as much as 30%. The actuarial data is the same. The underwriting is identical. Yet there are significant premium differences.
Thank you for adding some rational thought behind the discussion. You bring up some very interesting points, mainly the idea of economies of scale and distribution. I would agree that a company like Genworth has a much lower cost of entry and on-going costs than, say, a career shop mutual company.
However, I have a few questions. In one sentence you state actuarial data is the same across all LTCi issuers, and then you say the exact opposite. Which one is it? Moreover, you state the underwriting standards are the same. I would submit that this is 100% false - someone who gets flat declined by one company will be preferred with another. I've seen it first hand.
It is my opinion however, that the stock companies DO attempt to buy business. Why? They are beholden to their shareholders, who have a much shorter-term outlook on profits, revenue, and costs. By their nature, they must take a more aggressive stance for getting revenue or their stock suffers. Mutual companies don't have this pressure, and can afford to price their policies a lot more conservatively. Let's face it, companies like Mass and NWM are life companies first and are very late to the table with LTCi. They are babies compared to JH and Genworth. Their in-force business compared to their other lines is miniscule compared to JH and Genworth. Therefore, I would argue that the aforementioned mutuals can take a "take it or leave it" stance with regards to LTCi.
Moreover, it is a stance I feel more comfortable with, considering that in reality, no company (Genworth and JH included) really has a handle on how to price these kinds of policies. Think about it: When the DI marketplace got blasted in the late '90's, part of the problem was a dearth of revenue to pay claims. The entire industry was forced to figure out how to price these policies. As a result, you saw large increases in premiums with the surviving companies, and you saw quite a few companies leaving the game all together. A lot of the same parallels can be drawn in the LTCi arena. I for one am more comfortable proposing a higher-premium policy, but ultimately letting the client decide how they would like to have their LTCi.
Apparently I own GonnaFlyNow an apology. Some of us actually have clients to see. I'm sure you are going to tell me you work primarily by phone and internet, but I find that hard to believe with your personality.
I would say Scott hit the nail on the head. There are numerous factors in pricing any type of insurance. The mutuals sat back and were able to see the experience of other companies. Also, you should know that everyone grossly misjudged the lapse ratio. Instead of being similar to life insurance, it is much, much lower.
The big mutuals do not have a large, existing book of LTCi business that was mispriced based on lapse, claims and now investment return. The fact that the price increases emerged last year when uncertainty started to enter the market shouldn't be a surprise. I have to admit, I really like a quote from the following link:
"Given the decline in long-term interest rates as a result of the current economic recession, premium adjustments may be likely in the future. According to the American Association of Long-Term Care Insurance (AALTCI), every 1 percent decline in long-term interest rates could lead to a 10–15 percent increase in LTCI premiums."
I think we all know what that means for certain stock companies.. That does not mean the mutuals are immune, but certainly they were more conservative in their pricing estimates.
And finally, I believe the following really shows the difference in premium. The mutuals are not expecting any lapses, and the stock companies expected high lapses. Hopefully they are reevaluating this in line of recent experience.
It is my opinion however, that the stock companies DO attempt to buy business. Why? They are beholden to their shareholders, who have a much shorter-term outlook on profits, revenue, and costs. By their nature, they must take a more aggressive stance for getting revenue or their stock suffers.
Deathcab,
So, you're saying that since the stock insurers "are under pressure" to show a profit to Wall Street, they have to charge less premium? Hmmmm. Wouldn't they need to charge more premium if they are under pressure to show a profit? How does charging less equate to "more profit"?
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Originally Posted by Death Cab For Tootie
However, I have a few questions. In one sentence you state actuarial data is the same across all LTCi issuers, and then you say the exact opposite. Which one is it? Moreover, you state the underwriting standards are the same. I would submit that this is 100% false - someone who gets flat declined by one company will be preferred with another. I've seen it first hand.
That's not what I wrote. Go back and re-read it.
Of course the underwriting criteria are very different from one LTC insurer to another. That's the premise upon which my website (www.DeclinesIntoCash.com) is based.
What I said was that there are 2 mutual insurers (previously mentioned) who use the exact same actuary and TPA. Yet, the premiums for those 2 insurers vary significantly: often as much as 30%. Why does a policy from one of those mutuals cost significantly more premium than the other?
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Originally Posted by Death Cab For Tootie
Moreover, it is a stance I feel more comfortable with, considering that in reality, no company (Genworth and JH included) really has a handle on how to price these kinds of policies. Think about it: When the DI marketplace got blasted in the late '90's, part of the problem was a dearth of revenue to pay claims. The entire industry was forced to figure out how to price these policies. As a result, you saw large increases in premiums with the surviving companies, and you saw quite a few companies leaving the game all together. A lot of the same parallels can be drawn in the LTCi arena.
The Facts:
34 years of LTCi experience.
About $5 Billion dollars of LTCi claims PAID to date.
Over $10 Billion reserved for future LTCi claims.
One rate increase of less than 13% on about half of their LTCi policyholders.
Your conclusion:
"no company has a handle on how to price these policies."
Hmmmm.... I wonder.... Do they need to go 40 years with only one 12% rate increase before you will be willing to admit that they have a handle on how to price LTCi? 50 years? How long?
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Originally Posted by Death Cab For Tootie
Scott,
Therefore, I would argue that the aforementioned mutuals can take a "take it or leave it" stance with regards to LTCi.
Wouldn't it be better to own a policy from an insurer that is committed to the LTCi market for the long haul?
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Originally Posted by Death Cab For Tootie
I for one am more comfortable proposing a higher-premium policy...
That doesn't make any sense to me. Even with Genworth's 12% rate increase and Hancock's 18% rate increase, their policyholders are still paying significantly less than if they had gone with a "higher premium policy" that has not had a rate increase.
What do your clients gain by paying a significantly higher premium for the same coverage?
Last edited by Never_a_dull_moment : 09-04-2009 at 08:15 PM.
Reason: Posts merged
Best LTC Companies
Re: Best LTC Companies
oops. too late.
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