Article Suggests Moving CDs into LTC

An article suggesting baby boomers with CDs/bank accounts they don't intend to use (and pass on), should instead buy LTCi.

It may help LTCi build credibility and close more sales. If your clients read your facebook page, you can share it so it's available for them to read, and easier for you to find.

7 Vital Retirement and Estate Rules Baby Boomers Need to Follow Now - TheStreet


he's talking about single premium combo products.

a single premium combo product is NOT a good deal (compared to lifepay products) UNLESS you can't qualify for a lifepay policy.
 
he's talking about single premium combo products.

a single premium combo product is NOT a good deal (compared to lifepay products) UNLESS you can't qualify for a lifepay policy.

Why are single premium combo products not a good deal Scott? Genworth sells both funding options-traditional stand alone lifetime pay and single premium hybrid policies. Full medical underwriting in both. Is it your position the Genworth actuaries have mistakenly priced the traditional policy to be a good deal? Or are you stating the Genworth actuaries have purposefully overpriced the combo policy to be a bad deal?

Or rather could it be that the Genworth actuaries have priced both models as they see fit without creating an advantage for either funding option over the alternative? (Most likely)
 
Why are single premium combo products not a good deal Scott? Genworth sells both funding options-traditional stand alone lifetime pay and single premium hybrid policies. Full medical underwriting in both. Is it your position the Genworth actuaries have mistakenly priced the traditional policy to be a good deal? Or are you stating the Genworth actuaries have purposefully overpriced the combo policy to be a bad deal?

Or rather could it be that the Genworth actuaries have priced both models as they see fit without creating an advantage for either funding option over the alternative? (Most likely)



in my opinoin, the isngle premium products are a bad deal when you look at them in their totality:

1) opportunity cost
2) if you go on claim, they use your money first.
3) the "multiplying effect" is minimal in most cases.


the problem is that the concept for the "hybrid" products was created for one reason and one reason only: denial.

What if someone came up to you and said, "Why are you wasting money on old-fashioned homeowner's insurance premiums?"

"There's this new type of homeowner's insurance policy where you don't have to pay premiums year after year after year."

"It's called "Asset-based" homeowner's insurance."

"It combines homeowner's insurance with life insurance."

Here's how it works.

Suppuse your house is worth $300,000, you just put $100,000 into this "Asset-based" homeowner's insurance.

If you die without ever needing to make a claim, the insurance company will pay your heirs $150,000.

If you need to make a small claim, the insurance company will just pay the claim from the $100,000 you put into it and it reduces how much your heirs get.

If you need to make a big claim, the insurance company will use your $100,000 deposit first, then if the claim is over $100,000, the insurer will pay their money to repair/replace your home but no more than $200,000 over your deposit.

Of course, in the event of a big claim, your heirs won't get any money from this policy.


Who in the world would buy such a policy?
No one would. It doesn't make sense.
Yet, the probability of needing LTC is so much greater than needing to make a claim on one's homeowner's policy.


:)
 
in my opinoin, the isngle premium products are a bad deal when you look at them in their totality:

1) opportunity cost
2) if you go on claim, they use your money first.
3) the "multiplying effect" is minimal in most cases.

Who in the world would buy such a policy?
No one would. It doesn't make sense.
Yet, the probability of needing LTC is so much greater than needing to make a claim on one's homeowner's policy.

:)

I think you missed the point.

The article discusses the need for LTC, and I don't believe I'm alone (especially here) in thinking highlighting LTC is a good thing.

It also demonstrates that a single premium product is superior to holding the same in a bank account. It's not the venue to debate which product is best for any given situation.

Again, compared to a CD, the single premium policy life insurance w/LTC doesn't use your money first and the multiplying effect is massive compared to a bank account.

While a single premium may be a "bad deal" for some, it's the "best deal" for others. Each situation, needs, and desires are unique and I think it's a mistake to use one criteria that may be important to you and then extrapolate that upon everyone else.
 
originally posted by 1reason

I think you missed Scott's point.

What he was trying to say was that if your client had any interest at all in LTC insurance, you should advise him to purchase a homeowner's policy.

:D
 
I think you missed the point.

...

Again, compared to a CD, the single premium policy life insurance w/LTC doesn't use your money first ....


You put $100K into a single premium life/ltc combo product.

You make a claim for long-term care.

Does the insurer use their money first to pay for your care or do they first use the $100K you deposited to pay for your care?


:twitchy::no::nah::swoon:;):goofy:
 
originally posted by Mr_Ed


You put $100K into a single premium life/ltc combo product.

You make a claim for long-term care.

Does the insurer use their money first to pay for your care or do they first use the $100K you deposited to pay for your care?

You spend $5,000/yr for 20 years to pay for a LTC policy.
You make a claim for LTC.
Does the insurer use their money first to pay for your care or do they first use the $100K you deposited over 20 years to pay for your care?

I fail to see much of a difference.
 
originally posted by Mr_Ed




You spend $5,000/yr for 20 years to pay for a LTC policy.
You make a claim for LTC.
Does the insurer use their money first to pay for your care or do they first use the $100K you deposited over 20 years to pay for your care?

I fail to see much of a difference.



There's a huge difference.

The LTC benefits in a life/ltc combo product with a single premium of $100K would cost about $2,000/yr NOT $5,000 per year.

Therefore, I can get comparable LTC benefits for only $40,000 in premium over the next 20 years, NOT $100,000.

That $40,000 in premium that I pay over the next 20 years has a present value of about $20,000. So, now I'm getting the same LTC coverage for 1/5th of the cost of the combo product.

Keep the $100K yourself. Invest it in something safe that will generate 2% or 3% every year. Use that earnings to buy equal or better ltc coverage than the life/ltc product. Your beneficiary gets the $100K when you die.


With the combo product you lose your deposit AND you lose the earnings you could have made on it.

:biggrin::biggrin::biggrin:
 
in my opinoin, the isngle premium products are a bad deal when you look at them in their totality:

1) opportunity cost
2) if you go on claim, they use your money first.
3) the "multiplying effect" is minimal in most cases.


the problem is that the concept for the "hybrid" products was created for one reason and one reason only: denial.

What if someone came up to you and said, "Why are you wasting money on old-fashioned homeowner's insurance premiums?"

"There's this new type of homeowner's insurance policy where you don't have to pay premiums year after year after year."

"It's called "Asset-based" homeowner's insurance."

"It combines homeowner's insurance with life insurance."

Here's how it works.

Suppuse your house is worth $300,000, you just put $100,000 into this "Asset-based" homeowner's insurance.

If you die without ever needing to make a claim, the insurance company will pay your heirs $150,000.

If you need to make a small claim, the insurance company will just pay the claim from the $100,000 you put into it and it reduces how much your heirs get.

If you need to make a big claim, the insurance company will use your $100,000 deposit first, then if the claim is over $100,000, the insurer will pay their money to repair/replace your home but no more than $200,000 over your deposit.

Of course, in the event of a big claim, your heirs won't get any money from this policy.


Who in the world would buy such a policy?
No one would. It doesn't make sense.
Yet, the probability of needing LTC is so much greater than needing to make a claim on one's homeowner's policy.


:)

But there is nearly zero chance of ever filing a major homeowners claim. Right? So it is stupid to buy a homeowners policy like that. Heck, you maye move 4 more times.

This works well for LTC because of how likely an insured is going to need to use this poilicy.
 
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