Prospects waiting till the last minute

al3 · 05-10-2009, 10:50 AM

I think you might have more luck with LTC if you make two changes.

1. Move up to a higher-income demographic. Wealthy people will often pay to keep something they have before they will pay to get something they don't. While it is the middle class that probably needs LTC more than the better-heeled, until the "light goes on" in their collective heads, it will be an uphill struggle, IMO.

2. I think with a lot of people, LTC is looked at the same way they look at their home insurance... as money down a rat hole. Most don't make many claims and see it as a waste of money. The big objection to LTC is "What if I never need it? Who keeps all the money I paid in?" Answering them that "It's the same with your house or car" does not engender much love from them! So... sell a life policy with a LTC rider. That is always my first offering... the John Hancock LifeCare rider on top of a UL or a WL. It answers the objections that "My money is wasted" because they will either die or need LTC. In other words... either they will get use of the premiums or their kids will. It's a no-lose proposition. (Of course there are cost and UW issues with life+LTC, but it is easier to sell to those who have the assets.)

Just a thought. YMMV.

Al
Preserve your memories

Never_a_dull_moment · 05-10-2009, 11:53 AM

Originally Posted by Lute

What do you find is the best way to suggest clients pay for LTC? Am I wrong to be wary of suggesting reverse mortgages? That's messing with someone home. I tend to stress the high cost of paying for LTC yourself to put the high LTC premiums in perspective and mention the tax deductions for premiums.

If someone can't afford to pay for LTCi out of their current income, they probably shouldn't be buying LTCi. LTCi is primarily income protection.

somarco · 05-10-2009, 12:26 PM

LTCi is primarily income protection

Asset protection . . .

Never_a_dull_moment · 05-10-2009, 02:02 PM

I believe that LTCi is primarily "income protection". It can protect assets, too. But, it's primarily "income protection."

Someone could have little or no countable assets, yet still need LTCi if they are married and their incomes are high enough.

Focus LTC · 06-19-2009, 12:11 AM

Originally Posted by Never_a_dull_moment

I believe that LTCi is primarily "income protection". It can protect assets, too. But, it's primarily "income protection."

Someone could have little or no countable assets, yet still need LTCi if they are married and their incomes are high enough.

First of all in your in an LTC facility, your not earning an income, so there is nothing to protect income wise. Its all about assets (home, IRA's etc.)
Secondly there are "Spousal Impoverishment Laws." Spouse won't go broke if one is in nursing home. He/She can protect home, one car, $104,000 of liquid assets and $1,700/month which is about the average Social Security Check for H/W combined.

LTC to protect income... please elaborate I'm all ears.

Most seniors pay for LTCi out of savings

Never_a_dull_moment · 06-20-2009, 01:25 PM

Originally Posted by Focus LTC

First of all in your in an LTC facility, your not earning an income, so there is nothing to protect income wise. Its all about assets (home, IRA's etc.)
Secondly there are "Spousal Impoverishment Laws." Spouse won't go broke if one is in nursing home. He/She can protect home, one car, $104,000 of liquid assets and $1,700/month which is about the average Social Security Check for H/W combined.

LTC to protect income... please elaborate I'm all ears.

Most seniors pay for LTCi out of savings

Under current Medicaid rules, the community spouse can keep about $104,000 in savings, plus $500K in home equity, plus a car, personal items, etc. In other words, someone's spouse could easily qualify for Medicaid and they could still have a net worth of over $700k. Simply put, current Medicaid rules already protect a significant amount of assets for the community spouse.

However, Medicaid does not protect income (except if the community spouse's income is below the MMMNA.)

If you position LTCi as "asset protection" you are saying the same things that a Medicaid-planning attorney says.

However, Medicaid planning attorneys cannot protect their client's income (beyond the MMMNA limits--which is ridiculously low... about $2,700 per month (not $1,700).

If you think of LTCi as "asset protection" then your target market is mostly limited to those who have net worth significantly above 700k.

However, if you emphasize LTCi as "income protection" then your target market is anyone who has a spouse who needs more than $2,700 per month to live comfortably.

The LTCi industry is doing a disservice to many people by emphasizing the product as "asset protection." It is really "lifestyle protection" (aka "income protection") for the spouse who does not need care.

A married couple with $30,000 in savings and a mortgage, but a monthly income of $6,000 (from pensions and social security) needs LTCi more than a married couple with a $300k house that's paid for and only $3,000 per month in income. The second couple, in this example, could easily qualify for Medicaid, with little or no change in the lifestyle of the community spouse. In order for the first couple to qualify for Medicaid, the community spouse would see her household income drop from $6,000 per month to $2,700 per month.

Since most of a couple's income cannot be protected from Medicaid's grasp, LTCi's biggest advantage is that it protects one's income.

SalemInsuranceGuy · 06-20-2009, 09:54 PM

Originally Posted by TDY418

Some Will Some Want Whose next is my Motto! We as professionals can only educate, present the products show the value and benefits and move on.

What do they want? I always thought it was "Some will, some won't, who's next"?
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Originally Posted by Never_a_dull_moment

If someone can't afford to pay for LTCi out of their current income, they probably shouldn't be buying LTCi. LTCi is primarily income protection.

I thought disability insurance was for income protection and LTC was for asset protection.
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Originally Posted by somarco

That is not unique to the LTCi market. I believe most folks would not buy insurance if not required.

If you have a mortgage, you are required to have HO insurance.

If you have a car, you are required to have auto coverage.

Some states have enacted partnership laws that (as I understand it) denies you access to Medicaid funds if you do not have LTCi until you first deplete your assets.

Insurance is something many folks don't want to pay for until they need it.

So true. When I managed a large insurance agency before I would always get at least a couple calls a month from a young female saying I need to get health insurance with maternity coverage. Which I immediately followed with the question, "Are you pregnant now?". To which she would excitedly answer yes, we just found out. Then I had to burst her bubble and explain that no company will cover her or anyone in her family until after she delivers the baby.

Or I would get a few calls with a client asking for dental insurance. My next question was always, "Do you need any dental work done right now?" To which they usually replied, "Yes, I have a tooth ache and need to get it taken care of." Then I had to inform them of the waiting periods with most plans.

It always amazes me that people think the insurance companies are some type of charity organization and they can just wait until they need to use it and get pissed off when the company won't cover them.

That would be like a widow saying my husband died last night, I need life insurance on him. Sure Ma'am how much would you like? 1 Million, 2 million?

Never_a_dull_moment · 06-21-2009, 10:58 AM

Originally Posted by SalemInsuranceGuy

I thought disability insurance was for income protection and LTC was for asset protection.
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Disability insurance replaces income, it doesn't protect income.

LTCi protects income (including the income one is receiving from a disability insurance policy.)

Because LTCi protects income, it prevents the claimant and the claimant's spouse from having to tap into savings. So, by protecting income, LTCi also protects assets.

moonlightandmargaritas · 06-21-2009, 11:27 AM

Originally Posted by SalemInsuranceGuy

I always thought it was "Some will, some won't, who's next"?

[COLOR=blue]Why let a little thing like correct use of the English language get in the way?[/COLOR]