Presenting Life W/LTC Rider Along-side a Traditional LTC Contract

[CFP83]

I wanted to see what if some of you who are specialist in the LTC market operate this way.

Most of my insurance production is on the life side, and my average new client is a referral who is going through our financial-planning process, bringing their investments over to us and looking for overall guidance. As called for I utilize Life insurance as part of the estate planning/legacy for the kids while also being a small portion of their conservative asset allocation.

Over the past two years I have been utilizing more and more JH's UL/IUL's with the LTC rider. Unlike some other carriers who offer "chronic illness riders" I feel JH's permanent life products combined with their LTC rider is a unique concept as the client can exhaust 100% of the death benefit during their life for qualified long-term care needs.

I wonder how much you folks who specialize in LTC are using this concept/product?

JH is not one of my top 2 bread and butter carriers but they serve as a niche product/concept within our overall offerings.

From the clients perspective, it essentially is a guaranteed return of premium LTC contract.......if they don't need LTC, the death benefit goes to their heirs tax free. During their life they also have access to the cash-value.

From a premium perspective obviously the client has to "pay" a good bit more for a Life/LTC contract, however unlike LTC annuities or Lincoln's MoneyGuard single pay product, JH's life w/ltc rider product does not require a large upfront premium.....it is an annual or monthly premium like any other life policy. Further, my thoughts are that a traditional LTC premium is a "premium cost" while the life/ltc product, although higher premium, is more of savings moving as if the policy is held full term they are guaranteed to have a larger payout (through ltc need or death) than what they've put in.....traditional LTC in comparison is more of a pure insurance risk play.

I realize, and also explain to clients, that the risk we are exposed to with a life/ltc product is that the cost of long-term care could potentially exceed the amount of death benefit/ltc benefit we have....in comparison to a life-time benefit traditional ltc product.

Again, I'm just curious to hear the ltc specialists view on how/if they are using this product or similiar one's to JH's.....to my knowledge Genworth is the only other carrier who offers a true LTC rider on a traditional life contract.

Thanks

 

[yankee466]

I wanted to see what if some of you who are specialist in the LTC market operate this way.

Most of my insurance production is on the life side, and my average new client is a referral who is going through our financial-planning process, bringing their investments over to us and looking for overall guidance. As called for I utilize Life insurance as part of the estate planning/legacy for the kids while also being a small portion of their conservative asset allocation.

Over the past two years I have been utilizing more and more JH's UL/IUL's with the LTC rider. Unlike some other carriers who offer "chronic illness riders" I feel JH's permanent life products combined with their LTC rider is a unique concept as the client can exhaust 100% of the death benefit during their life for qualified long-term care needs.

I wonder how much you folks who specialize in LTC are using this concept/product?

JH is not one of my top 2 bread and butter carriers but they serve as a niche product/concept within our overall offerings.

From the clients perspective, it essentially is a guaranteed return of premium LTC contract.......if they don't need LTC, the death benefit goes to their heirs tax free. During their life they also have access to the cash-value.

From a premium perspective obviously the client has to "pay" a good bit more for a Life/LTC contract, however unlike LTC annuities or Lincoln's MoneyGuard single pay product, JH's life w/ltc rider product does not require a large upfront premium.....it is an annual or monthly premium like any other life policy. Further, my thoughts are that a traditional LTC premium is a "premium cost" while the life/ltc product, although higher premium, is more of savings moving as if the policy is held full term they are guaranteed to have a larger payout (through ltc need or death) than what they've put in.....traditional LTC in comparison is more of a pure insurance risk play.

I realize, and also explain to clients, that the risk we are exposed to with a life/ltc product is that the cost of long-term care could potentially exceed the amount of death benefit/ltc benefit we have....in comparison to a life-time benefit traditional ltc product.

Again, I'm just curious to hear the ltc specialists view on how/if they are using this product or similiar one's to JH's.....to my knowledge Genworth is the only other carrier who offers a true LTC rider on a traditional life contract.

Thanks

There are many carriers that offer an accelerated death benefit for LTC besides JH...Protective, TransAmerica, StateLife to name a few. I think Nationwide has a product as well if memory serves me correct....likely others too, with more to come as carriers get nervous about traditional LTC plans

I will discuss with a client, as appropriate, the pros and cons of traditional LTC, versus LTC riders in a permanent life plan, versus hybrids like MG or TLC, and annuities like Forethought/Forecare. They either need life insurance or they don't. They may want to re-postion $200K in a lump sum with RoP, or pay $150/month in premium and hopefully never use it...everyone is different....and it depends on what brought them to the table in the first place. Underwriting is different with traditional versus life based plans....so that comes into play as well. Longevity annuities with doublers and triplers of income for a LTC need may have a place as well....like Phoenix or some Guggenheim products

The more options you are proficient in, the less likely the client will go elsewhere for info.

 

[ltcadviser]

I wanted to see what if some of you who are specialist in the LTC market operate this way.

Most of my insurance production is on the life side, and my average new client is a referral who is going through our financial-planning process, bringing their investments over to us and looking for overall guidance. As called for I utilize Life insurance as part of the estate planning/legacy for the kids while also being a small portion of their conservative asset allocation.

Over the past two years I have been utilizing more and more JH's UL/IUL's with the LTC rider. Unlike some other carriers who offer "chronic illness riders" I feel JH's permanent life products combined with their LTC rider is a unique concept as the client can exhaust 100% of the death benefit during their life for qualified long-term care needs.

I wonder how much you folks who specialize in LTC are using this concept/product?

JH is not one of my top 2 bread and butter carriers but they serve as a niche product/concept within our overall offerings.

From the clients perspective, it essentially is a guaranteed return of premium LTC contract.......if they don't need LTC, the death benefit goes to their heirs tax free. During their life they also have access to the cash-value.

From a premium perspective obviously the client has to "pay" a good bit more for a Life/LTC contract, however unlike LTC annuities or Lincoln's MoneyGuard single pay product, JH's life w/ltc rider product does not require a large upfront premium.....it is an annual or monthly premium like any other life policy. Further, my thoughts are that a traditional LTC premium is a "premium cost" while the life/ltc product, although higher premium, is more of savings moving as if the policy is held full term they are guaranteed to have a larger payout (through ltc need or death) than what they've put in.....traditional LTC in comparison is more of a pure insurance risk play.

I realize, and also explain to clients, that the risk we are exposed to with a life/ltc product is that the cost of long-term care could potentially exceed the amount of death benefit/ltc benefit we have....in comparison to a life-time benefit traditional ltc product.

Again, I'm just curious to hear the ltc specialists view on how/if they are using this product or similiar one's to JH's.....to my knowledge Genworth is the only other carrier who offers a true LTC rider on a traditional life contract.

Thanks

Bottom line is you are funding a life insurance policy full boat. So, your client better express a need for permanent life insurance. Because my clients have expressed a concern for ltc planning I have only used the life with LTC continuation of benefits products----lincoln moneyguard, state life asset care, Genworth total living coverage, pac life premier care---to date.

 

[Arthur Rudnick]

I think we're on a different page than you.
Your clients are first looking for a Life insurance product.

LTC specialist's clients are first looking at a LTC policy.

Different needs and a different focus.

 

[CFP83]

Bottom line is you are funding a life insurance policy full boat. So, your client better express a need for permanent life insurance. Because my clients have expressed a concern for ltc planning I have only used the life with LTC continuation of benefits products----lincoln moneyguard, state life asset care, Genworth total living coverage, pac life premier care---to date.

Of course the client needs to realize that they are buying a life insurance policy with LTC benefits......but what is the negative about this?
I believe imho, clients need to be educated......no one walks into their doctors, attorney, CPA's, office and starts giving orders.

I educate clients about traditional LTC and then always show a life policy with LTC.......the reason for my post in the first place was because clients are ALWAYS choosing the life with ltc rider! I was inquiring as the whether others having the same success or always showing life w/ltc.

I still don't understand, so I would appreciate it if someone please explain to me, why someone would sell a plan like moneyguard or PAC's product over life/with ltc benefits.....the numbers just don't add up to a better deal for the client from what I'm seeing. Let's look at an example:

With PAC's PremierCare if I am a 60yr old female and am willing to take $100,000 out of my portfolio and loose all that future interest or capital gains here is what I get in return:

• $325,000 day one ltc benefit

• 6 year benefit with 5% simple interest

• $100,000 death benefit

• $615,000 of LTC at age 80

With a life/ltc rider plan, I can use my $100,000 that is still invested in my portfolio to pay the premiums each year on my life/ltc plan. Here is what I get:

• $500,000 of LTC benefit day 1

• $500,000 of death benefit day 1

• I still have my $100,000 liquid within my portfolio earning me money

• annual premium of $6,157

 

[ltcadviser]

Of course the client needs to realize that they are buying a life insurance policy with LTC benefits......but what is the negative about this?
I believe imho, clients need to be educated......no one walks into their doctors, attorney, CPA's, office and starts giving orders.

I educate clients about traditional LTC and then always show a life policy with LTC.......the reason for my post in the first place was because clients are ALWAYS choosing the life with ltc!! I was inquiring as the whether others having the same success or always showing life w/ltc.

I still don't understand, so someone please explain to me, why someone would sell a plan like moneyguard or PAC's product over life/with ltc benefits.....the numbers just don't add up to a better deal for the client from what I'm seeing. Let's look at an example:

With PAC's PremierCare if I am a 60yr old femail and am willing to take $100,000 out of my portfolio and loose all that future interest or capital gains here is what I get in return:

• $325,000 day one ltc benefit

• 6 year benefit with 5% simple interest

• $100,000 death benefit

• $615,000 of LTC at age 80

With a life/ltc plan, I can use my $100,000 that is still invested in my portfolio to pay the premiums each your on my life/ltc plan. Here is what I get:

• $500,000 of LTC benefit day 1

• $500,000 of death benefit day 1

• I still have my $100,000 liquid within my portfolio earning me money

• annual premium of $6,157

Below is a link to my blog in which I did a comparison of the 2 types of life policies with LTC benefits. Granted, I used Nationwide's single pay as an example, but the concept should not change with JH's lifetime pay premiums. If it does change, maybe I need to write another blog post.

LTC Insurance Hybrids Link Long Term Care Insurance Combined with Life Insurance - LTC Partner

 

[CFP83]

Below is a link to my blog in which I did a comparison of the 2 types of life policies with LTC benefits. Granted, I used Nationwide's single pay as an example, but the concept should not change with JH's lifetime pay premiums. If it does change, maybe I need to write another blog post.

LTC Insurance Hybrids Link Long Term Care Insurance Combined with Life Insurance - LTC Partner

Thanks for this link, I will read this tonight.

I would be very interested to see a side-by-side comparison from a LTC specialist/expert like all of you here on this forum of the following...
-A traditional long-term care plan
-A single pay life/ltc plan like moneyguard, pac's product, or nationwides, with a $100,000 single premium.
-An annual pay life insurance plan with true LTC rider (not chronic illness), with a side fund of $100,000 (to equal what went into the single pay product) earning 5% return.

Since almost all of our clients rely on us to manage their assets as well as provide insurance planning, my concern on the single pay combo products is the lost time value of money on that $100,000. In the example I gave in my last post, if the 100k that would of went into the combo product were invested at 5% it would produce $5000 per year, and the premium on the lifetime pay life/ltc rider plan was just over $6000.....meaning the client is only drawing down the side fund by just over $1000 per year, and has far more ltc and death benefit day one.

Thanks for this conversation and all of your feedbacks. This is a topic I have been thinking a lot about. And as I mentioned above, clients of mine are overwhelmingly stating that, when seeing a traditional ltc plan side-by-side with a life/ltc rider plan, the life/ltc rider plan just provides a better all-around value...and most were not initially even interested in the life insurance component. To them they life insurance is simply a "guaranteed return of premium".

 

[yankee466]

Of course the client needs to realize that they are buying a life insurance policy with LTC benefits......but what is the negative about this?
I believe imho, clients need to be educated......no one walks into their doctors, attorney, CPA's, office and starts giving orders.

I educate clients about traditional LTC and then always show a life policy with LTC.......the reason for my post in the first place was because clients are ALWAYS choosing the life with ltc rider! I was inquiring as the whether others having the same success or always showing life w/ltc.

I still don't understand, so I would appreciate it if someone please explain to me, why someone would sell a plan like moneyguard or PAC's product over life/with ltc benefits.....the numbers just don't add up to a better deal for the client from what I'm seeing. Let's look at an example:

With PAC's PremierCare if I am a 60yr old female and am willing to take $100,000 out of my portfolio and loose all that future interest or capital gains here is what I get in return:

• $325,000 day one ltc benefit

• 6 year benefit with 5% simple interest

• $100,000 death benefit

• $615,000 of LTC at age 80

With a life/ltc rider plan, I can use my $100,000 that is still invested in my portfolio to pay the premiums each year on my life/ltc plan. Here is what I get:

• $500,000 of LTC benefit day 1

• $500,000 of death benefit day 1

• I still have my $100,000 liquid within my portfolio earning me money

• annual premium of $6,157

With GNW, for example, if you use TLC and take $100K for a 60Y old female in good health with the spouse also getting a plan, I see the following numbers:

Immediate and permanent $711K of LTC benefits, death benefit of $237K based on current assumptions, and of course full RoP if needed. The trick to making linked benefit plans work efficiently, IMHO, is not to include an inflation rider. They tend to make them under-perform.......but that may be a debatable topic. They start out with BIG LTC benefits and stay that way...else you see your example of small and growing. I just happen to know the person who was instrumental in the design of MG....and his advice to me was to NEVER sell it with an inflation rider. GNW echoed the same comment to me when I was first introduced to the product.

If the goal is to maximize the LTC coverage, this may be a better choice, as now you would have to get a $711K life plan with LTC rider to match up. Your point of time value of money is well taken of course.

The carriers claim the ideal target for the "hybrid" plans like MG or TLC tend to be those with "lazy" money available. CD's, money market, stock market fear (all under performing assets), or 1035 exchange from plans without the LTC benefit.

Any one good at math will be able to poke holes in MG/TLC as an investment vehicle, as you always give up max death benefit and loss of othe investment opportunity. You might as well just buy a cheaper permanent life plan, and with no uplift for the LTC rider...take all the savings and investment potential over MG/TLC and buy some traditional LTC product as an add on. You can even throw the RoP switch on the traditional RoP plan if it helps.....this way you will never die with no death benefit one day.

Depends again on what the client wants to do. Everyone has an opinion.

 

[ltcadviser]

I just happen to know the person who was instrumental in the design of MG....and his advice to me was to NEVER sell it with inflation.

Depends on the age of the applicant. Most of my applicants today benefit from including inflation factors. Moneyguard II looks better with inflation, generally.

And it's not about what "sells" easier, either. It is about the proper design for LTC planning.

 

[Mr_Ed]

I wanted to see what if some of you who are specialist in the LTC market operate this way.

Most of my insurance production is on the life side, and my average new client is a referral who is going through our financial-planning process, bringing their investments over to us and looking for overall guidance. As called for I utilize Life insurance as part of the estate planning/legacy for the kids while also being a small portion of their conservative asset allocation.

Over the past two years I have been utilizing more and more JH's UL/IUL's with the LTC rider. Unlike some other carriers who offer "chronic illness riders" I feel JH's permanent life products combined with their LTC rider is a unique concept as the client can exhaust 100% of the death benefit during their life for qualified long-term care needs.

I wonder how much you folks who specialize in LTC are using this concept/product?

JH is not one of my top 2 bread and butter carriers but they serve as a niche product/concept within our overall offerings.

From the clients perspective, it essentially is a guaranteed return of premium LTC contract.......if they don't need LTC, the death benefit goes to their heirs tax free. During their life they also have access to the cash-value.

From a premium perspective obviously the client has to "pay" a good bit more for a Life/LTC contract, however unlike LTC annuities or Lincoln's MoneyGuard single pay product, JH's life w/ltc rider product does not require a large upfront premium.....it is an annual or monthly premium like any other life policy. Further, my thoughts are that a traditional LTC premium is a "premium cost" while the life/ltc product, although higher premium, is more of savings moving as if the policy is held full term they are guaranteed to have a larger payout (through ltc need or death) than what they've put in.....traditional LTC in comparison is more of a pure insurance risk play.

I realize, and also explain to clients, that the risk we are exposed to with a life/ltc product is that the cost of long-term care could potentially exceed the amount of death benefit/ltc benefit we have....in comparison to a life-time benefit traditional ltc product.

Again, I'm just curious to hear the ltc specialists view on how/if they are using this product or similiar one's to JH's.....to my knowledge Genworth is the only other carrier who offers a true LTC rider on a traditional life contract.

Thanks

If your client needs life insurance, then you're not doing them any good by ruining the life insurance benefit if they need LTC. Sounds like they don't really need the life insurance.

----------

Of course the client needs to realize that they are buying a life insurance policy with LTC benefits......but what is the negative about this?
I believe imho, clients need to be educated......no one walks into their doctors, attorney, CPA's, office and starts giving orders.

I educate clients about traditional LTC and then always show a life policy with LTC.......the reason for my post in the first place was because clients are ALWAYS choosing the life with ltc rider! I was inquiring as the whether others having the same success or always showing life w/ltc.

I still don't understand, so I would appreciate it if someone please explain to me, why someone would sell a plan like moneyguard or PAC's product over life/with ltc benefits.....the numbers just don't add up to a better deal for the client from what I'm seeing. Let's look at an example:

With PAC's PremierCare if I am a 60yr old female and am willing to take $100,000 out of my portfolio and loose all that future interest or capital gains here is what I get in return:

• $325,000 day one ltc benefit

• 6 year benefit with 5% simple interest

• $100,000 death benefit

• $615,000 of LTC at age 80

With a life/ltc rider plan, I can use my $100,000 that is still invested in my portfolio to pay the premiums each year on my life/ltc plan. Here is what I get:

• $500,000 of LTC benefit day 1

• $500,000 of death benefit day 1

• I still have my $100,000 liquid within my portfolio earning me money

• annual premium of $6,157

Single pay combo products rarely make sense.
And you pick the two worst ones to compare.

MG and PacPremCare are the two worst combo products.

gen tlc will crush those products for a healthy married couple every day.

but the best combo products are not single pay and they offer guaranteed annual premiums:

state life assetcare4
nationwide's new product
minnesota life's