Net worth/assets for LTC policy

ABC · 10-07-2008, 01:10 PM

Question,
I only sell about one of these LTC policies a year and it is usually from an existing client that has a larger net worth.

What would be an average net worth/assets for a person to consider a LTC policy?
I was thinking around $200,000.

Feedback?

Crazy Rick · 10-07-2008, 02:34 PM

No mate, I think that's a little high. Figure $100k or maybe even a little less. Figure if a plan will cost $12k a year, figure they'll have to at least earn that a month. We're talking combined income too by the way. Husband/wife, whatever. Two people. Both Husband and wife will need to earn $6k each. This will make the plan affordable. Hope this helped.

-Rick

ABC · 10-08-2008, 09:22 AM

Originally Posted by Crazy Rick

No mate, I think that's a little high. Figure $100k or maybe even a little less. Figure if a plan will cost $12k a year, figure they'll have to at least earn that a month. We're talking combined income too by the way. Husband/wife, whatever. Two people. Both Husband and wife will need to earn $6k each. This will make the plan affordable. Hope this helped.

-Rick

Thank you

Crazy Rick · 10-08-2008, 09:44 AM

Not a problem mate. Look, whatever happens, you have to make the plan affordable. They're going to give you their basic info anway to begin with. Age, weight, height, DB, Benefit max in years they want, inflation protection. Then present them with three plans and explain why the go from the highest to the cheapest: This way the system and the plans dictate what they'll be able to afford. Maybe they can afford the $12k plan, you don't know: you didn't get the rest of their financial info yet. So, present them three proposals and ask them: "Which one of these plans do you like?" Then shut up. I don't care if there's dead silence for 2 hours: wait for them to answer, say nothing. They'll come around. Then they'll tell you and that's the plan you work from there to make it affordable and fullfilling their needs while you work the rest of their health and financials. This is a tuff product to sell let me tell you. Everyone, but everyone will balk at the price unless you happen to hit it with a wealthy client then the complaining will be kept to a minimum. Good luck.
- - - - - - - - - - - - - - - - - -
You'd think since the LTC market's inception in 1986; the general buying public would get it through their thick, ignorant heads that the answers are NO: You're kids won't take care of you. No, the Government's job isn't to take care of you till you're gone. No, it's not the Government's fault you didn't plan ahead. No, Medicare doesn't and won't pay for your Long Term Care needs for who knows? 14 years in a home? No, it's not too bad and working folk will keep more of what they earn. No, you don't get your choice of what facility or even in what state you'll live in , in said facility once you're on the Medicaid system. No, you won't be able to keep your house. No, a six year plan for both you and your wife isn't enough of a Benefit Period. Yes, illness and injury can strike any time. Yes, even to young people. Yes, you'll need to be cared for by professionals, not unskilled day workers that'll pop in every now and then to "check on you."

You'd think this would be an easy product to sell. Man O Man O Schewitz Robin, what can I say I just dig it.

ABC · 10-10-2008, 09:51 AM

Thanks for the info.

I am using MetLife and their perffered rates look good.
The middle of the road plan is coming in around $3,000 a year for a Male 58. I really dont think this type of plan design has enough coverage but its affordable.

It so much easier when a person of high net worth comes in and says cover all my assets. Those are the type of policies I have put in place in the past.

The average folks are a much tougher sale.

I really appreciate your feedback.

Thanks

thewold · 10-10-2008, 11:51 AM

IMO - I don't think net worth has any bearing on who needs LTC. Sure some who do have a net worth want to protect their assets, but some don't want to rely on kids and don't have the assets to cover ltc, in that case they should get a plan as long as their monthly income can afford. Also, some might want to have choices as to where they receive their care, whether they have any savings or not. I have clients with 10K in savings but bring home a pretty good income from SS and pensions that would not be enough to foot the monthly payment of a good assisted living, but would never want to go to a Medicaid facility. A LTC plan allows this to happen.

Sure some can't afford to have an unlimited plan and most don't need it. The average stay for someone who needs LTC is something like 30 months. Therefore, I try to fill that atleast with a three year plan. If they can afford a longer plan then great. I also try and design the plan to make up the difference for what they might be able to pay out themselves. I wrote a sigle female a while back who brought in around 3000/mo. Home is paid for and so if she went into a facility, her income would go to cover part of the 5500/mo it would cost for the high end homes. Therefore she only needed a 2500 monthly benefit as opposed to 5500 which greatly reduced her premium. We actually went up to 3500 to cover HHC so she could stay at home for as long as possible.

I guess what I'm getting at is, you need to design the plan to fit the situation, everyone doesn't need the cadilac. Make sure it will cover the cost of what homes in the area whether wholly by the plan or a combination of plan and income and make sure they can afford the plan. And add inflation, always. And the need for LTC coverage goes way beyond just protecting assets. And if they truly can't afford, have their kids pay for it. They are going to be ones who have to deal with. No kid wants to put thier parents in a nursing home, but if they do atleast it can be a nice one.

Once again, just my opinion.

ABC · 10-13-2008, 11:04 AM

Originally Posted by thewold

IMO - I don't think net worth has any bearing on who needs LTC. Sure some who do have a net worth want to protect their assets, but some don't want to rely on kids and don't have the assets to cover ltc, in that case they should get a plan as long as their monthly income can afford. Also, some might want to have choices as to where they receive their care, whether they have any savings or not. I have clients with 10K in savings but bring home a pretty good income from SS and pensions that would not be enough to foot the monthly payment of a good assisted living, but would never want to go to a Medicaid facility. A LTC plan allows this to happen.

Sure some can't afford to have an unlimited plan and most don't need it. The average stay for someone who needs LTC is something like 30 months. Therefore, I try to fill that atleast with a three year plan. If they can afford a longer plan then great. I also try and design the plan to make up the difference for what they might be able to pay out themselves. I wrote a sigle female a while back who brought in around 3000/mo. Home is paid for and so if she went into a facility, her income would go to cover part of the 5500/mo it would cost for the high end homes. Therefore she only needed a 2500 monthly benefit as opposed to 5500 which greatly reduced her premium. We actually went up to 3500 to cover HHC so she could stay at home for as long as possible.

I guess what I'm getting at is, you need to design the plan to fit the situation, everyone doesn't need the cadilac. Make sure it will cover the cost of what homes in the area whether wholly by the plan or a combination of plan and income and make sure they can afford the plan. And add inflation, always. And the need for LTC coverage goes way beyond just protecting assets. And if they truly can't afford, have their kids pay for it. They are going to be ones who have to deal with. No kid wants to put thier parents in a nursing home, but if they do atleast it can be a nice one.

Once again, just my opinion.

I like your approach of selling it more on the side of quality of care.

I have always sold it as more of asset protection.

Thank you for the advice

teambuilder · 10-13-2008, 08:14 PM

I had a guy once (who didn't buy), tell me that LTCi is like having "Jesse James in your hip pocket."

Needless to say, I never overcame that objection.

Joe H · 10-22-2008, 04:31 PM

You should have said Wyatt Earp was in your pocket protecting you from the Jessie James Long Term Care health care costs…

thewold · 10-23-2008, 08:22 AM

Good one, I'll have to use that if I ever get that objection. That's like the people who tell me that God is going to take care of them. I then tell them that it was God who sent me here to sell you LTC. God helps those who help themselves right?

policy doctor · 10-29-2008, 03:29 PM

To be totally honest....no one knows what is the perfect LTC policy. Too many variables and then the freaking premiums go up!

So remember this: Short and Fat or Long and Thin