Custom Care II, Custom Care II Partnership and Corporate Solutions (multi-life) applications must be dated on or before June 6, 2010, and must be received at the home office by June 21, 2010.  This means that applications must be received in the BJFIM/Paradigm Woodland Hills, California office no later than June 18, 2010 so that they can processed and FedEx’d to the home office to meet the deadline.  Lot’s of “must be’s”, but having been through our share of fire sales over the past 15 years we know how important it is to understand the rules set forth by the insurance company in order to get this business issued.  Rest assured that the BJFIM/Paradigm LTCi team will do everything it can to help you get those applications submitted in a timely manner.

John Hancock has a number of other product changes, suspensions and withdrawals in various different states.  For state-by-state rules and information contact your BJFIM/Paradigm Marketing Representative or CLICK HERE for JH’s May 3, 2010 product announcement.

So you may be wondering why this is happening and is there cause for concern.  In my opinion the short answer is “NO”.  Let me start with the situation in California.  The primary reason for the withdrawal is the glacial regulatory environment at the California Department of Insurance.  Custom Care II, the basic chassis for all products sold in California, has needed a new business repricing for several years now. John Hancock has filed the request, but as is typical, it languishes on some bureaucrat’s desk.  Long-term care insurance new product approvals and repricing is a low priority at CDI and the shortened work week now in place for state government employees has made matters even worse. 

In my opinion John Hancock has made a good business decision pertaining to its California business.  If the home office actuaries are not comfortable with a product’s pricing as it pertains to a host of global economic issues (which appears to be the case) the responsible thing to do is suspend sales.  This isn’t the “schmata” business; an insurance company cannot lose money on every sale and try to make it up in the volume.

On the national level John Hancock appears to be honing it’s product offering.  At this point I don’t see any red flags that would indicate wholesale abandonment of this market segment or risk. All major long-term care insurance companies have or will reprice compound inflation protection, move away from lifetime benefits and attempt to simplify their overall product lines. I may be wrong but as agents we should be supportive of an insurance carrier’s attempts to act responsibly in product pricing.  We’ve seen the results of the opposite strategy and they can be ugly.

That being said there’s a whole lot of opportunity in this news. Here’s a quick review:

1. The most obvious is to close out any existing John Hancock long-term care cases you have by the submission deadlines outlined above. If Custom Care II (particularly California Partnership) is the right choice for your client then there’s no time like the present to get it done.  Be assured that when JH comes back into California, the premiums on 5% compound inflation will be much higher and lifetime benefits will probably no longer be available.
2. Going forward we still have a number of great companies with mid-2000’s 5% compound inflation pricing; Prudential, Genworth, United of Omaha, Transamerica and Berkshire have not yet repriced.  I’ve said it before but I’ll say it again, your client/prospect will never see better premiums then NOW on 5% compound inflation protection.  How do you say going, going, gone!
3. If California Partnership is your client’s preference then after June 6, 2010 your one viable choice in the independent LTCi brokerage channel will be Genworth.  Additionally, Genworth is one of the few companies that continues to be bullish on lifetime benefits. After a rough 2009 Genworth is looking very strong.
4. MetLife’s new LifeStage Advantage offers a very simplied “piece of money” product chassis. While the 5% compound inflation rider has been repriced upward on both LifeStage and VIP 2, other inflation options coupled with multi-life at three lives make Met an important player in the multi-life market.

Regardless of these and future changes anticipating the long-term care risk is an essential part of responsible financial and insurance planning. For better or for worse traditional and linked LTCi products will continue to evolve but the problem remains the same. The solution is get your client’s needs covered with the best choice or choices that exist in today’s marketplace. 

BJFIM/Paradigm stands ready to help.  Call us today!

First Michael, CalPers long-term care insurance is not state regulated insurance!  It is a self-funded trust, exempted by ERISA, from just about every California Department of Insurance regulation that insurance companies and agents in this state are obliged to abide by.  Calling CalPers long-term care coverage, “insurance”,is like calling me a tri-athelete!  CalPers early effort to guarantee issue policies was one of the many reasons this program has had so many rate increases.  This flaw is bound to doom CLASS as well but more on that in a moment.  Trying to paint real insurance companies with the grease brush of CalPers long-term care insurance is the height of hypocrisy and inaccuracy and this error should, but most likely will not, be corrected in future issues of the Bird Cage Gazette.

Second, due to the fact that real insurance companies are regulated by the California Department of insurance we now have rate stabilization in place that apply to all real long-term care insurance policies sold.  There are different sets of rules for pre and post 2002 LTCi policies but the fact remains that unlike CalPers, insurance carriers must get permission from the Commissioner of Insurance to increase rates and there must be actuarial justification for these increases.  I don’t suspect that CalPers will voluntarily submit to the same oversight any time soon.

Third, the American Academy of Actuaries and the Society of Actuaries have declared that CLASS long-term care “coverage” (not insurance) as submitted to Congress in June 2009 is “actuarily unsustainable”.  CLASS is rife with problems that make CalPers look good. LAT and its writers ought to reference something other than Democrat Party talking points when reporting, in an effort to accurately inform the public.  Get the latest on CLASS and changes in long-term care insurance markets on April 14, 2010 at a webinar that Susan and I will be conducting. CLICK HERE to register. 

This CalPers story in the LAT (it is mostly a fairy tale) is a great opportunity for you to reach out to your clients.  The bloom is off the rose of CalPers long-term care and the warts on the nose of CLASS coverage are so obvious that it shouldl be clear to the most casual of observers that state or Federal sponsored insurance look-alikes are bad for consumers.  We are in the process of completing our first CLASS Act review.  It will be in an easy to understand FAQ format so that you can easily discuss it and real long-term care insurance with your clients. 

Please comment to this Blog and let’s start a conversation.

Now at the risk of being politically incorrect or offending someone’s tender sensibilities my simple and straightforward philosophy towards an over weaning government controlled health care system has been simple and straightforward:

1. The government has a legitimate interest in fostering and regulating a level playing field so that private insurers can create insurance policies that people want to purchase and to make sure that the consumer is protected against insurance programs  that don’t live up to their promises; and
2. The government that governs least governs best.

To say the least, the health care reform bill that is being signed into law as I write this Blog is none of the above.  It is not only everything that many of us have fought over the years it is exactly the worst of all of the evils that supporters of more government invovlement claim that they are fighting against.  A case in point is the CLASS Act long-term care component of the reform bill. While it holds out the promise of long-term care benefits  it’s primary function within health care reform is one of the many  dubious “revenue neutral” funding schemes within the bill. 

While the outlines of coverage within CLASS are still hazy what is clear is that the majority political party is counting on it to generate $70 billion dollars of revenue towards the overall cost of health care reform. This despite the fact that the American Academy of Actuaries and the Society of Actuaries have already told anyone who will listen in the Federal government that CLASS is “actuarially unsustainable“.  Since I’ve already discussed CLASS in last month’s BJFIM/Paradigm Webinar and at our broker meeting in Woodland Hills two weeks ago I won’t bore you with the sketchy details of the plan and will cut to the chase; IN MY OPINION, CLASS is an integral part of a government run Ponzi scheme being perpetrated on the American people.  If an insurance company designed and marketed a product like this to consumers its executives, including the actuaries, would be “perp-walked” out on the nightly news. So to quote radio talk show host and President of the Landmark Legal Foudation, Mark Levin, “so there, I said it!” 

But the beautiful thing about America and the entrepreneurial amongst us is that there is a “pony” in this pile of *&*$. The one good thing about CLASS is that employers must “opt-out” of offering CLASS insurance (and I use the term insurance loosely) to their employees. This gives you the opportunity to open the discussion.  The pro-active agent and financial planner has a reason to discuss and encourage employers to insure themselves and key employees  with high quality private long-term care insurance and offer the same on a voluntary basis to all employees. There’s no time like the present to do this.  Overtime, CLASS will skew the private LTCi markets making products more expensive and less attractive to consumers. Why you may ask?  Enrollment in CLASS is likely to be less than predicted and adverse selection will be rampant due to the guaranteed issue basis of the program. As CLASS’ anticipated revenue does not materialize, it will threaten to torpedo the entire funding scheme of  Health Care Reform.  What happens when government programs fail?  Politicians and bureaucrats tinker with the private markets and we all know where that leads.

You can do good for yourself and your clients by getting them into private long-term care insurance today.  Traditional or linked LTCi will never get better or be “cheaper” than it is now.  Over the next month I will post a series of product reviews giving you the highlights of each of the carriers in our portfolio.  We will also do a webinar sometime prior to the end of April to sum up the best of the best.  As always, our job at BJFIM/Paradigm is to help you make more long-term care insurance sales easily and quickly. Our staff stands ready to assist you.

In the meantime I hope that you will join me in becoming more actively involved in our electoral process so that we can replace those in Washington D.C. and Sacramento who wish to abrogate our freedom of choice in all things health insurance and health care related.  As we’ve painfully learned elections have consequences. Let’s make sure that the next one does as well but this time in the freedom’s favor.

barry@paradigmins.com

Where does this leave the typical consumer?  Ill served at best.  In the dark with an uncovered insurance risk at worst.  The smart planner will search out the information and broker that can help them but the simple truth remains that most don’t.  They either don’t understand or don’t know the problems that are headed their way. 

There is a confluence between my assertions above.  Many agents and most consumers are unaware of the expanding world of long-term care planning and insurance solutions that now exist.  Traditional long-term care insurance is no longer the only choice.  Brokers that focus on life insurance or annuities can now offer products with the advantage of long-term care coverage.  And traditional long-term care insurance agents may begin losing sales to their more nimble competition if they don’t move their game to a higher level.  The full implementation of the Pension Protection Act of 2006 means that financial and insurance professionals of all stripes are now playing in each other’s sandbox.  Either they will become fluent in how all of the various planning tools fit consumer’s needs or they will begin to lose sales, get sued by disgruntled clients and heirs or both.  Which category do you want to find yourself in?

It is because of this growth of new product types that we at BJFIM/Paradigm are changing our focus from long-term care “insurance” to long-term care “planning”.  Yes, we still make our living by helping you market and sell insurance products that indemnify against the long-term care risk.  But now the solution may include a life or annuity combo, traditional long-term care insurance or all three.  Sales will be won by those agents who can appropriately discuss the long-term care risk, help clients understand that planning for it makes sense and recommending the proper insurance solutions.

So does this mean that you’ll have to learn about new products and techniques that will help you assist your prospects and clients?  Afraid so. I’ve been at it for more than a year and our staff has as well.  And now that the provisions of the Pension Protection Act are fully in play insurance carriers are bringing new products online every month.  1035 Exchange opportunities will abound. Consumers will soon learn that they can use latent cash values in existing life or annuity products to provide themselves with life, retirement and long-term care security.  These folks will represent the low-hanging fruit for the agile agent. The question is, will you be the on the receiving or short end of the exchange process? 

As always our plan is to make it easy for you to succeed in all things involved in long-term care planning.  That’s why on March 11, 2010 we will be hosting a seminar that will help you become a master of this new world.  Join us for Links To Long-Term Care Planning Success, a day complete with product, marketing and sales ideas, continuing education credits and a whole lot more.  You won’t want to miss this opportunity to meet with our entire staff and our friends from Genworth Financial an industry leader in traditional and linked long-term care insurance products and planning.  

Take advantage of our early bird tuition and don’t forget, space is limited. Our meeting in October sold out so you want to reserve your seat today.  Click Here to get a complete program guide and register today!  We look forward to seeing you on March 11.

barry@paradigmins.com

The Good News……..

While LIMRA reports year-over-year life and long-term care sales are down significantly, I’m pleased to say that, thanks to many of you, our LTCi production, particularly in the past six months, has been robust. Many of our agents continue to spread the gospel of long-term care planning and they are finding clients who wish to protect the assets and income they’ve been able to preserve.  The need for long-term planning has not gone away.  Informed consumers will continue to take advantage of the growing number of long-term care planning solutions. Smarter agents will educate themselves and stay abreast of changes and opportunities in long-term care planning.

CLASS-less In Washington, DC

I think it’s safe to say that Americans of most political persuasions are disgusted with the spectacle of Congress debating health care “reform” behind closed doors and taking votes in the middle of the night in the hope that we won’t notice.  The soon-to-be passed Senate version includes the CLASS Act (another misnomer), an inspiration of late Senator Ted Kennedy, designed to provide basic long-term care benefits to those who cho0se to enroll. It is hard to say exactly what this plan will cover, when it will cover it, how benefits will be accessed, how underwriting (if any) will work and what it will cost; other than that it’s great! CLASS may not even make it into a final health care reform bill depending on the reconciliation process used between House and Senate versions of their respective bills.  With this in mind, I’ll keep my powder dry as to what impact, if any, a government option for long-term care coverage will have on us.  Frankly, I don’t think the Federal Government can compete with the private sector, nor do I believe the current purchaser of long-term care insurance will be impressed with the offering. Time will tell and I’ll keep you posted.

Pension Protection Act (PPA) & Long-Term Care Is Here!

The world of long-term care planning will become bigger and better in 2010 as provisions of PPA 2006 come into play.  Beginning on January 1, 2010:

• Linked Benefit Annuity products with Qualified Long-Term Care Benefits
  • Qualified long-term care benefits received for covered long-term care expenses are tax-free
  • Internal long-term care rider charges are not taxed as distributions
• Linked Benefit Life Insurance products will improve
  • Internal long-term care rider charges are not taxed as distributions
  • Accelerated benefits for long-term care will be received tax-free
• Traditional long-term care funding opportunities expand
  • New 1035 exchange rules provide tax-free options to fund traditional long-term care insurance policies.
    • In theory, the owner of a cash value life insurance policy or non-qualified single premium deferred annuity can do a partial 1035 exchange to pay for a traditional LTCi policy.  How quickly and effectively companies can put this mechanism in place remains to be seen.
    • Payments sent from a single premium immediate annuity carrier to pay for a traditional LTCi policy are tax-free.  Again, the inter-company ability to perform this transaction may not yet be widely available.

Earlier in the year I wrote two articles for Broker World on the topic of linked products. CLICK HERE for the article pertaining to linked life insurance products and HERE the article on linked annuity products.

BJFIM/Paradigm is on the cutting edge of this new world of linked products and funding mechanisms.  For those of you who attended our October meeting, you know that life and annuity products with linked long-term care benefits present expanding sales opportunities for you. We’re pleased to represent the following linked benefit companies in California (listed alphabetically):

Genworth

John Hancock

Lincoln Financial

Nationwide

State Life

Next year we plan to schedule monthly webinars with these various companies in order to assist you in identifying the right clients for these linked products, how to open new cases, how to position these products with and without traditional long-term care insurance and how to close the deal. Stay tuned for more information on these web meetings.

Spring Is Almost in the Air – Well Maybe Not Quite Yet

We are currently developing our concept for a broker meeting in early March.  I hope to have a date for you shortly.

New BJFIM Website Coming Soon

We’re hoping to have a brand new Barry J. Fisher Insurance Marketing, Inc. website before the end of Q1 2010.  The new website will be simplified and easier to navigate.  It will also be more completely linked to our new Paradigm Insurance Marketing website which is already providing our agents with forms online and a whole host of life insurance tools. We devote many resources to our websites.  We hope you find them useful and we’d appreciate your feedback on their usefulness for you.

2009 has been a challenging but good year. We appreciate your business and continued friendship. The staff and I wish you slightly belated Happy Chanukah as well as an upcoming Merry Christmas and Happy New Year.  We look forward to working with you in 2010.

barry@paradigmins.com

P.S. Our offices will be closed December 24^th and 25^th for Christmas and December 31^st and January 1^st for the New Year holidays.

LTC E-Alert #9-135: CLASS News and More

Wednesday, November 18, 2009

Seattle–

LTC Comment: Good news and bad news today for CLASS advocates.

Surely proponents of the government-run LTC financing plan will celebrate its inclusion in the Senate’s health reform bill. See “Long-Term Care Plan to Be in Bill” in the Wall Street Journal here if you subscribe online or on page A-4 in the print edition.

But hold off on the celebration because the Chief Actuary at the Centers for Medicare and Medicaid Services (CMS) says CLASS is a dud. See “CMS Actuary: CLASS Act Would Not Work” posted by National Underwriter here. Some excerpts:

“In a report given to House Republicans Friday, CMS actuary Richard Foster says the Community Living Assistance Services and Support Act, or CLASS Act, program provision in H.R. 3962 would bring in $39 billion in new federal revenue during its first 9 years of operation, but then start to fall apart.

“Foster predicts:

- Average premiums for the program would be $180 per month.

- By 2025, the program would start paying out more than it collected in premiums, resulting in a net federal cost.

- Despite assurances of actuarial soundness, there is a significant risk that the program would be unsustainable.

“‘Voluntary, unsubsidized and non-underwritten insurance programs such as CLASS face a significant risk of failure as a result of adverse selection by participants,’ Foster writes in his report. . . .

“‘This effect has been termed the ‘classic assessment spiral’, or ‘insurance death spiral’,’ he writes. . . .”

You can find the full report of the CMS Actuary here. And it’s a doozy going much further than nixing the CLASS Act to lambasting the House’s health reform proposal in general.

Interesting note: CMS Chief Actuary Foster is the same fellow the Bush Administration allegedly threatened to fire in 2003 for disclosing higher estimates for the then-proposed Medicare Part D pharmacy program than management wanted to concede. Nervy guy!

Here’s a summary of Foster’s full report from the NCPA: Daily Policy Digest 11-17-2009:

HOUSE HEALTH BILL WILL HIKE COSTS $289 BILLION

————————————————————————

The House-approved health care overhaul would raise the costs of health care by $289 billion over the next 10 years, according to an analysis by Richard S. Foster, the chief actuary at the Centers for Medicare and Medicaid Services (CMS).

Minority Leader John Boehner (R-Ohio) highlighted the CMS report on Saturday in a written statement. “This report once again discredits Democrats’ assertions that their $1.3 trillion government takeover of health care will lower costs, and it confirms that this bill violates President Obama’s promise to bend the cost curve. It’s now beyond dispute that their bill will raise costs, which is exactly what the American people don’t want.”

According to the 31-page report, the House-passed bill would increase costs, cut Medicare and expand Medicaid:

o For calendar years 2010 through 2019, national health expenditures would increase by $289 billion.

o About three-fifths or more than 60 percent of the uninsured would gain coverage by an expansion in Medicaid eligibility.

o Medicare would be cut by more than one-half trillion dollars ($571 billion), possibly jeopardizing access to care for beneficiaries, and smaller companies would be inclined to terminate their existing coverage.

The nonpartisan analysis demonstrates that the Democrats’ bill “does the opposite of everything they’ve been wanting to do” in terms of reducing overall health costs, says House Ways and Means Committee ranking member Dave Camp (R-Mich.).

He added the CMS report shows that “this is not health care reform, this is entitlement expansion.”

In an interview with The Hill on Saturday afternoon, Camp pointed out that CMS actuarial numbers were cited by Democrats back in 2003 during the Medicare prescription drug debate:

o CMS estimated at that time that the GOP-crafted Medicare bill would cost more than $550 billion over 10 years while CBO estimated its price tag at $395 over the same period.

o The CMS cost estimate did not emerge until after the final conference bill was approved by Congress.

Source: Molly K. Hooper, “CMS: House Health Bill Will Hike Costs $289B,” The Hill, November 14, 2009; and Richard S. Foster, “Estimated Financial Effects of the “America’s Affordable Health Choices Act of 2009,” (H.R. 3962), as Passed by the House on November 7, 2009,” Centers for Medicare & Medicaid Services, November 13, 2009.

For text:

http://thehill.com/homenews/house/67791-cms-house-health-bill-will-hike-costs-289b

For CMS report:

http://republicans.waysandmeans.house.gov/UploadedFiles/OACT_Memorandum_on_Financial_Impact_of_H_R__3962__11-13-09_.pdf

For more on Health Issues:

http://www.ncpa.org/sub/dpd/?Article_Category=16

More from our dear friends in Washington DC!

Here’s hoping you have a great Thanksgiving.

barry@paradigmins.com

• Long-term care insurance sales are alive and well at BJFIM/Paradigm. We want to thank all of you who helped make July one of our best new business months of the year. We know that you’re selling into a head wind but keep up the good work.
• The MetLife individual and multi-life LTCi fire sale is in full swing. As I’ve mentioned in several previous emails and Blogs, Met will be introducing “revised” new business rates on VIP 2 sometime in the fall.  From experience in other states where this has already happened, the 5% compound inflation rates will increase as much as 40%. If you have any outstanding individual or multi-life quotes now is the time to motivate your prospects with this news.  We know this is happening we’re just not sure exactly when or how long we’ll have to harvest the bounty.  Now is the time to act.
• We are rapidly moving towards more linked LTCi product sales. State Life (OneAmerica) has a terrific portfolio of life and annuity combo products. We also are pleased to represent Genworth’s TLC (single premium life+ LTCi combo) and TLC-A (SPDA + LTCi combo) product line and Lincoln Financial Money Guard (single premium life + LTCi combo) products.  The market niche are clients age 65+ with investable assets of $750,000 and up. Purchasers of these products have generally considered traditional long-term care insurance in the past but have chosen to self-insure.  These products provide them with liquidity, access to their money if they change their minds and leverage for the long-term care risk.
• We are in the midst of major changes to our internet presence.  First, Paul Kaplan and I are pleased to introduce our new Paradigm Insurance Marketing website.  Here you will be able to download applications for most of our key insurance carrier partners, run term life insurance proposals work through many of the thorny issues surrounding sub-standard life and long-term care insurance underwriting.  Second, Susan and I are now working on significant changes to our Barry J. Fisher Insurance Marketing website. We will be making it more user friendly and easy to navigate. Both websites will be linked so you can work between them efficiently. Please be patient and we’re certainly open to suggestions.
• Mark your calendars for October 8, 2009!  We will be hosting our fall broker meeting with a number of our key carrier partners. Topics will include traditional and multi-life long-term care insurance as well linked and asset based combo products.  The meeting will be at the Woodland Hills Country Club, 8:00am to 1:30pm and will include lunch and continuing education.
• Last but not least we will be having a webinar on Thursday, August 27^th at 11:00am PDT.  We will be sending out an invitation in the next few days.  This will be short, sweet and to the point. We just want to get you primed and ready for the end of the year push.

Thanks again for your business. We’re looking forward to talking with you at month end and seeing you in October.

barry@paradigmins.com

With the “dog days” of summer upon us you may think planning for your holiday shopping is a bit premature.  THINK AGAIN!  Prudential Long-Term Care will send you gift cards you can use at over 350 merchants including popular restaurants, department and specialty stores, movie theaters, hotels, etc. etc.

Starting August 1, 2009 gift ft cards start coming your way once you’ve placed two policies. After that, they just keep on coming on each placed policy through October 30, 2009.  For detailed information contact your BJFIM/Paradigm marketing representative or CLICK HERE to view the terms and conditions of this outstanding offer.

barry@paradigmins.com

This first issue is as old as long-term care insurance itself.  For some reason many insureds and agents have the misguided notion that sons, daughters, spouses, etc. are the best qualified people to provide care.  Forgetting the merits of this notion for a moment, with the exception of expensive cash benefit policies, the vast majority of LTCi products have never allowed for payment of benefits to family members regardless of their qualifications.

The problem occurs when agents and insurance companies do not just come out and say this. They’re afraid this simple fact will cause some consumers not to buy a policy. Instead they talk around the issue instead of (1) making the case that qualified third party providers are generally the best caregivers or (2) that family caregiving  benefits are available if the insured is willing to pay a premium two to three times higher for “cash”.  For too long carriers and brokers minced words and indirectly implied a benefit feature that doesn’t exist. This is the case in this matter.

According to various news reports the crux of this case is as follows:

1. The CNA brochure stated: “caregivers cannot be a member of your immediate family living with you.”

2. The actual insurance contract stated caregivers cannot be “any family members.”

On the face of it you may think this is strictly a CNA problem. However, it appears that Suze over-promised and under-performed.  The complaint against her stipulates “Orman’s declaration that a person’s financial adviser has the obligation ‘to make sure you understand all the ramifications of the policy.’“ [1] If true, Orman has established a duty and responsibility that no one could attain in regards to any insurance policy or investment vehicle.  And, regardless of the truth of these charges, Suze’s high profile places her squarely in the crosshairs of a disgruntled consumer and the plaintiff’s bar.

I’m no great fan of Suze Orman or CNA for that matter.  But this story provides all of us with a great many lessons that should be obvious.  One should not be however, that you stop selling long-term care insurance.  If you come to that conclusion, you should find another career that does not allow any contact with the end user of a product or service.

The conclusions I reach are as follows (and these apply to ANY type of insurance policy):

1. Be careful what you say. Don’t make promises that are not clearly outlined in the policy documents.
2. Be clear as to your representations of what the product or service does regardless of representations in brochures; read outlines of coverage and specimen contracts.
3. Understand what the client is really after; do your homework.
4. Get the client engaged in the choices and cost-to-benefit trade-offs they will undoubtedly make.
5. Document your discussions with clients in case they are deceased when questions arise and you’re dealing with unhappy heirs.
6. Make sure you have a good E & O policy that covers prior acts and defends you against a litigious plaintiffs bar.

Considering the number of long-term care insurance policies that have been sold over the decades there have been relatively few lawsuits. Let’s also keep in mind that independent surveys (one of which I wrote about in one of my early Blogs) points to high consumer satisfaction with LTCi claims payment and the services that insurance companies provide families at time of claim.  We should all be proud of the protection that we’ve put in place over the years and need to continue to inform prospects and clients of the looming personal long-term care crisis that they face and their need for appropriate planning and protection.

Have a great weekend.

barry@paradigmins.com

The tone of the 2009 meeting was a bit more subdued than past years. Clearly government oversight and the media have caused the insurance companies to be more circumspect in their “hospitality”.  I don’t mind this; candidly, I go to these meetings for the information and networking not the food and booze.  There did appear to be fewer carrier marketing representatives in evidence. A number of companies limited attendance. Others have either “reorganized” their staffs, imposed hiring freezes, or both.  Also, my impression was fewer long-term care insurance agents attended this year.  This is too bad because I think it is good for home office employees of all stripes to have regular contact with the field force.

That being said, the conference was great, the topics lively and the information dispensed invaluable.  The clear trend on the traditional long-term care insurance side of the equation is multi-life. We’ve been talking about this for several years, and as I’ve mentioned in past posts, our multi-life sales accounted for more than 50% of 2008 production.  There are also new companies coming into play. Transamerica is back in the game and LifeSecure, a wholly owned subsidiary of Blue Cross/Blue Shield of Michigan (the latter is not yet available inCalifornia – now there’s a surprise!).  We’re pleased to be representing both companies and our marketing representatives are ready to assist you with information and quotes.  Product innovation continues as companies attempt to simplify their products and make them appear more affordable.

As I’ve also been writing (both here and the industry trade pubs) a new era of linked life + LTCi and annuity + LTCi are set to expand consumer choices in long-term care insurance.  If you’d like to read my January and February Broker World articles on this topic, please email me directly at barry@paradigmins.com.  We are set to go with the products that are currently available in the market place.  This includes Genworth’s TLC product and Lincoln Financials’ MoneyGuard, both single premium universal life + LTCi.  Additionally we represent State Life’s Asset Care (single premium whole life + LTCi) and Annuity Care (SPDA + LTCi) as well asNationwide’s Ultimate U.L. (annual premium universal life + LTCi rider).

As to overall industry trends and outlook, traditional sales are down for some, flat for others; the Q1 LIMRA production report is pending.  Much of this has to do with the economy and concerns over carrier financial viability. The long-term outlook, however, is optimistic and candidly the future will be written by those of us who choose to continue marketing and selling this product.  Regardless of challenges ahead, the need for long-term care planning has not disappeared and may very well be greater than ever before. We will continue to innovate and work to help you sell more.  All you need to do is talk to your clients, give them the facts and solution that fits their need.

Before I sign-off for the week I’d like to provide you with some additional information on state guarantee associations and how they may or may not work in relationship to long-term care insurance. I want to assure you that I am not concerned about any of our insurance carriers but I continue to get calls and emails from brokers regarding a few of the carriers that are struggling or that are being “rehabilitated” by their state of domicile.  The American Council of Life Insurers (ACLI) has an excellent fact sheet on Insurance Guarantee Associations.  If you have any questions specific to the California Life & Health Insurance Guarantee Association, you may want to contact them directly as they are located in Los Angeles.  As to the specific long-term care insurance company (which we never represented but you keep calling and emailing me about) that is currently under state rehabilitation you may want to check withPennsylvania Department of Insurance on their status.

Next week you can look forward to my comments on what I believe will be the long-term care insurance industry’s next great fire sale and why the best time to be selling traditional long-term care insurance is NOW!

barry@paradigmins.com