Traditional LTCi Study Hall

"Traditional long-term care is dead" sounds convincing until you look at what no other product type can offer. Learn why advisors who skip traditional LTCi may be leaving their clients underprotected and themselves underpositioned.

Hybrid products dominate the conversation, but traditional long-term care insurance still holds ground that no other product can claim. In this episode of the Buddy Study Podcast, Jason breaks down the current state of traditional LTCi, why the negative stigma is overblown, and where this product type remains the strongest option for advisors and their clients.

We explore:

• Why traditional LTCi still delivers the best bang-for-buck when every premium dollar goes toward long-term care
• The Partnership Program and how it provides exclusive asset protection against Medicaid spend-down
• How business owners benefit from maximum LTC premium tax deductibility
• Executive carve-outs using individual traditional LTCi for small groups
• Carrier updates including NGL's Honest LTC refresh, Banker's Life, Mutual of Omaha Custom Solution, and Thrivent
• Shared care riders, inflation protection strategies, and how to compare 3% vs. 5% compound options
• The coming wave of traditional LTCi in the group worksite market
• Underwriting realities, pre-qualification best practices, and navigating cardiovascular and diabetes cases

This episode is designed to help advisors:

• Recognize where traditional LTCi remains the strongest fit in today's market
• Use the Partnership Program as a planning tool for middle-market clients
• Approach business owners with tax-advantaged LTC strategies
• Navigate rate increase conversations and legacy carrier concerns with confidence

Chapter Markers

0:00 Welcome & Episode Overview

1:28 Traditional LTCi: The OG of Long-Term Care

4:09 Ideal Clients and Underwriting Realities

7:06 Carrier Updates: Banker's Life and NGL Honest LTC

9:18 Why Business Owners Need Traditional LTCi

11:44 Traditional LTCi in the Group Worksite Market

15:05 The Partnership Program Explained

21:00 Inflation Protection and 10-Pay Options

27:16 Shared Care, Mutual of Omaha & Carrier Highlights

35:55 What Traditional LTCi Needs Going Forward

38:49 Rate Increase History and the Genworth Factor

45:36 Underwriting Q&A: Cardiovascular and Diabetes Cases

55:51 Final Thoughts & Advisor Takeaways

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🔎 About Buddy Study Podcast

The Buddy Study Podcast helps insurance professionals and financial planners master Long-Term Care Insurance through case studies, expert interviews, and carrier product updates. Our goal is to help advisors become more confident, efficient, and knowledgeable when helping clients plan for long-term care.

Transcript

Welcome & Episode Overview

SPEAKER_02 0:00

Hey everyone, welcome to another edition of the Buddy Study Group. And for today, we're continuing the 2026 Study Hall series, and we're going to be landing on traditional long-term care today. So uh of the series this year, it's only been hybrid and now traditional, but we do plan to cover all product types. Covered all product types last year, and it was a really good success. So I want to keep these conversations going, especially as there are new developments every year to talk about. So we are certainly blessed that every product type has had uh a major update over the last year. And uh what we want to do is go through traditional long-term care just as a product type on its own. We want to talk about the major players in the market, we want to talk about uh sales ideas and where the best fits are for traditional long-term care today, and I want to hear from you guys. You know, what carriers are you writing right now with any of the product changes? Are you finding anything interesting? Any interesting pricing sales? Uh, anything you've found out since the last time we've talked traditional that you want to go through uh anything at all, I would love to hear from you. So traditional long-term

Traditional LTCi: The OG of Long-Term Care

SPEAKER_02 1:28

care. It is peanut butter and jelly, right? It's the OG of the long-term care market. It is what you think of still today when people talk about long-term care. It is pure long-term care. There's a million different uh characterizations for it, just like anything else in this industry. Of course, everybody has a different name for it, but it is the longest standing form of long-term care insurance, primordial long-term care insurance, if you want to go that far. So, uh, because traditional long-term care has been around for a long time, the market has really started to prove out, right? And with some of that proving out, has come some negative stigma around traditional long-term care. I'm sure you all deal with that when you're working with your clients, and traditional long-term care comes up in the conversation. And hey, I read in my favorite financial publication that traditional long-term care stinks and uh it's expensive, and the rates go up, and uh, I would rather not look at it. And of course, we want to do right by our client, we want to meet their desires, but there's, as we all know on this call, a lot of reading in between the lines that we're going to have to do and going to have to get the client to do to a degree to get them to explore beyond just their stigma. You know, the people who are writing these articles are not necessarily long-term care specialists. It's not to say what they're saying does not have layers of truth to it. Of course, uh, traditional long-term care has definitely made some mistakes in the early goings in their assumptions that has led to rate increases, that has led to people having unpleasant experiences. And uh still to this day, we just had a session not too long ago about how to handle the rate increase conversation, right? How to handle that consultation with your clients. These things are very real. We can't ignore them, but we also can't ignore that traditional long-term care still has a ton of fits in today's market and still has a really good uh section of ideal clients for the product, right? Now, when we talk about

Ideal Clients and Underwriting Realities

SPEAKER_02 4:09

ideal clients, we got to remember a couple things. Number one, health matters a lot with traditional long-term care. Um it's all health-based, right? There's no life insurance component that we're underwriting on here. Um, so we do have to remember that traditional long-term care is likely the most strict underwriting you will find in the long-term care market today. Um, even if you want to use uh, you know, maybe if you don't want to use the term strict, you can certainly say rigorous, I would say. Uh a number of different pages of medical questions. These are not streamlined underwriting solutions where you would find on the hybrid market a lot of carriers kind of giving a blanket assessment. There's a lot of homework done in traditional long-term care. Um, probably the most important to pre-qualify for. Um, and at the end of the day, the process, though it is getting much better, is probably the longest when you consider from app submitted to policy delivery. It's probably the longest underwriting process we have in the long-term care market. So I think that comes with um, you know, a layer of care that's needed. And working with a long-term care specialist if you are not one is the best way to go for traditional long-term care because they're going to be able to head that conversation off at the pass and really let the client know that, you know, we're in for potentially a couple month process of underwriting. And at the end of that process, we may not end up being approved, right? These are facts of life and things we need to do to set expectations correctly for clients. Um, when it comes to traditional long-term care, I think in the previous few years, we have really said the predominant theme with traditional long-term care is not so much innovation on the product itself, but innovation on the process overall. So using various different third parties to make sure that underwriting process, that window is shorter from app submitted to policy delivery. Um, and we're we're still seeing carriers having that as their main focus. But we have seen some new developments in traditional long-term care for sure. Um, I would say when it comes to innovation on the product itself, banker's

Carrier Updates: Banker's Life and NGL Honest LTC

SPEAKER_02 7:06

life is definitely the carrier that's kind of into the most innovation right now, kind of making a traditional long-term care product that really is kind of geared like a short-term care plan. Even though it is a partnership qualified traditional long-term care plan, we're dealing with shorter benefit periods, uh, potentially a bit more lenient underwriting, um, but pretty wide availability when it comes uh to underwriting, though they're not, say, like a one America level of lenient. There are some cases that bankers can take that other carriers cannot, because they've limited their amount of exposure by limiting the range of benefit periods you can actually access, right? Um obviously we have NGL Honest LTC that just released uh a few weeks ago, two about a month ago now, which um I wouldn't say is tremendously innovative. I I don't think that's anything against NGL whatsoever in saying that, but there have been vast improvements by flipping over to honest LTC without a doubt, when we think about the calendar day elimination period, when we think about flipping to a monthly benefit. And I guess I shouldn't say calendar day elimination period, I would say it's really a one equals seven service day elimination period, but it is better than a kind of full one equals one uh 90-day elimination period. Um, but there's a lot of client-centric changes with Honest LTC that I really like. So it's nice to see a refresh in this area because we haven't seen product refreshes from our traditional long-term care carriers in in in quite a while. You know, bankers releasing their product as kind of a new development for the market. Sometimes no news is good news, right? Um, but it's nice to see some refreshes in the market. Now, back to just traditional

Why Business Owners Need Traditional LTCi

SPEAKER_02 9:18

long-term care as a whole, where are the advantages of working with traditional long-term care? Where can we kind of overcome the negative stigma and say there are some real tried and true reasons to be looking at traditional long-term care? Number one is business owners. I think traditional long-term care should always be on the table as a recommendation for a business owner. I I struggle to find um, you know, a reason to not include it for business owners because you have the maximum long-term care deductibility that you could possibly look at on the market, right? When every single dollar of premium is going into long-term care and long-term care only, that increases the amount of deductibility, right? Now we've seen hybrid long-term care carriers uh innovating and um breaking out the long-term care from the life premiums called separately identifiable long-term care premiums. That allows you to deduct the long-term care portion of the premium for business owners. And I think, you know, that's a wonderful thing. But if you want to really maximize uh that deductibility, can only really be done with traditional long-term care. And I think it traditional long-term care is going to make quite a splash in the group work site market, right? Uh, with carriers starting to, you know, existing carriers retooling to fit the work site market or brand new traditional long-term care options coming to the work site market, it is just a matter of time. I would say it's likely within about a year that we'll start to see um, you know, these products releasing on the market. And when we see guaranteed issue, simplified issue, at the very least, underwriting concessions, when we start to see things like unisex rates um for traditional long-term care hitting the work site market, plus the incentive that you can offer to the business owner or pitch to HR to take to the business owner, decision maker, CFO, whoever it may be, that's going to be a powerful combination that's in high demand. So

Traditional LTCi in the Group Worksite Market

SPEAKER_02 11:44

don't just think about this from uh a view of traditional long-term care for the individual market. If you are at all interested or tangential to the group work site market, traditional long-term care, I believe, is going to make a very big splash there, especially when you consider inflation protection, uh, where most of the true group carriers do not have inflation protection at this moment. Um, I think it's primed for a little renaissance in the group long-term care market. Um, Marcus, the tax deductibility of long-term care premiums is not necessarily a new development. Somebody, one of the true long-term care nerds in the audience might be able to tell me um the year in which that flipped over, but I I want to say it's 15, 20 years um, that it's been around at least. Um, so that's always been a very compelling sales idea. I would say it's newer to the hybrid market. Separately identifiable premiums uh are relatively new there. Hybrid long-term care is still relatively new compared to traditional long-term care, though. Um, but a very good question. And um the work site market 1997 with HIPAA. Thank you, Mark. So that puts us almost at the 30-year anniversary. I knew the true long-term care nerd would step up. Um the worksite employer market is rapidly growing. Yes, uh, I would say um more than I've ever seen anything in the long-term care market grow um over the last three years. Well, really, you could say five years now, um, with the Washington CARES Act from 2021, um, releasing a payroll tax for long-term care or the opportunity to opt out of that payroll tax with the ownership of private insurance. I think that really started the you know, group work site market coming back, and the demand has kind of stayed, and not just in Washington, but across the country. I think group really um had a heyday and then fell off the radar for a while and is now like a Phoenix from the ashes, it's like back in a very big way. Um, traditional has not made it there yet, but it is coming shortly, and I think it's going to have a really big impact. Um really good questions. So we talked about deductibility. I think uh what everybody, not everybody, what many people tend to overlook about traditional long-term care, because I hear from so many people who want an update from me just when we're meeting one-to-one on what the long-term care market looks like today. I hear from people, yeah, I'm just really selling hybrids right now. I'm not really looking much at traditional long-term care. Number one, that leaves out about five other product types that can really help be an arrow in your quiver and fill in a lot of holes and help you to cover

The Partnership Program Explained

SPEAKER_02 15:05

people who might not be able to get coverage with traditional or hybrid. But when it comes to traditional long-term care, if you are purposely kind of ignoring traditional in favor of hybrid, you are missing out on the partnership program. And for especially middle market clients, this is a massive benefit that cannot be overlooked. And I think when you're doing any sort of fact-finding or you get information on a new client, you should really look to see if the partnership program can help that client. It is a exclusive benefit value add to traditional long-term care. So you cannot access the partnership program with any other product type than traditional. Um, so really, really important to look at the partnership program. For those of you who are um unaware, the long-term care partnership program does vary in the way it works from state to state. Uh, but essentially the aim of this is to provide extra asset protection against the Medicaid spend down for owning a traditional long-term care plan. Most states, and just keeping this general, I will have somebody on this year you can bet, that will give us a detailed overview of uh the partnership program, deficit reduction act, what you can keep in each state, yada yada. But generally, in most states, the way it works is based on the total amount of long-term care benefit you owe, you generally receive dollar-for-dollar asset protection against the Medicaid spend down. And so if I own a traditional long-term care policy with $300,000 of total long-term care benefit, essentially my floor that I have to spend down to to qualify for Medicaid is no longer, say, $3,000. It is now $303,000, which allows you to retain a nice chunk of assets and still be able to qualify for Medicaid if it came to it. This is a government program that was instituted back in 2006, long-term care nerds. Am I right? Is it 2006? Um, that really incentivized people to hold private long-term care insurance because you're not with this program just getting the protection of your long-term care policy, but you're getting that extra layer of asset protection that allows you to still qualify for Medicaid and potentially retain your house and a car or other assets, right? Um, so I think for especially middle market folks who don't have millions in assets or um, you know, ultimate levels of liquidity, um, I think it's a a huge thing to keep these folks from being devastated by the Medicaid spend down. I think any chunk of defense you can put up against spending down all of your assets is a huge, huge thing. And for middle market folks, especially, uh, the pay as you go premiums really tend to be um a bit more manageable than, say, a single premium or a 10-pay. Of course, clients come in all shapes and sizes, um, but just as kind of a rule of thumb, pay as you go premiums tend to benefit the middle market a bit better, right? So each state has you know different rules for their partnership program, different um levels of benefit that you have to purchase to actually make the plan a partnership qualified plan. So that's information that differs state by state. And every state has different numbers for what you can actually keep when you undergo the Medicaid Medicaid spend down. Um, so that's an important thing to go over, but you can't access the partnership program any other way than through traditional long-term care. Okay. Um, that is, I think, the most overlooked thing. And that's the thing that makes me cringe when I hear folks say, I'm just ignoring traditional long-term care, really. I'm not really writing it. I'm just writing hybrids. It's easier to sell. Um, and I agree, maybe easier to sell a live dire quit proposition, certainly. Um, but I think these folks who are meeting with you who are interested in protecting themselves for long-term care, they know what they know and they don't know what they don't know, right? So maybe introducing the idea of partnership protection with traditional long-term care, that could really change somebody's opinion when you think about their overall financial health into retirement, right? Um, and and maybe not truly bulletproofing them, but making their plan a lot stronger for their given financial situation. So uh I'll always be a broken record about that. I'm gonna have Rhonda or Jim Bosley on the study group at some point to lay down the law and give you guys kind of all of their expertise on the partnership program, deficit reduction act, etc. Um, but I think you I just can't let that go unsaid. Um, traditional long-term

Inflation Protection and 10-Pay Options

SPEAKER_02 21:00

care generally has um quite adequately priced inflation protection. Um, at the end of the day, there are several carriers, um, NGL and Thrivant as of right now that accommodate 10peys. Um, I don't know how many of you out there are using traditional 10peys. In those business owner scenarios, they can be, you know, extremely helpful. Um, so I wouldn't overlook, you know, the concept of a 10pey or the way um somebody's financial picture is structured. A 10pey actually may make more sense. Um, we're seeing that 10 pays are really only coming with about uh a five-year rate guarantee now, as opposed to a 10 year, which we normally saw. Um, but again, it's all about does this fit the client's situation? Does it fit their preferences? Right? So that option is certainly available. Um, let me see. Does anybody have any comments or questions on what we've gone over so far? Bob asks, Do you have a recommended five to ten slide PowerPoint for long-term care discussion for a small to medium business? We absolutely do. Um and that can be found in the buddy system. If you are not a member of the buddy system, you can get started here. I can throw you a link in the chat. This will give you information about the buddy system itself, how to become a member, a link to actually create yourself an account. But if I actually go find that for you, we won't have anything that's traditional long-term care geared right now. We will as those products become available, but we have them that are more centered around number one, um, long-term care is a workplace issue and kind of your 101, but we also have some that go into the predominant plan design of the day in group long-term care. So let me see if I can pull that up for you. Yes. Okay. So we have a couple of things. So if you go to our marketing section here, the filter is automatically applied to Worksite Group. And if you just type in presentation in the search bar here, it'll pull you up a generic presentation that you can open up. And this is in PowerPoint format. So it walks you through uh it's actually 10 slides right within your range. Uh, we also have a presentation template in Canva. Don't be scared of Canva, it's an amazing, amazing software. This one's actually 11 slides, so not exactly in the range you asked for, but this also is nice and pretty customizable. So everything in here is editable, and you could make this fit if you were talking to a business owner uh about individual traditional long-term care, right? So that is still very possible. Just because there are not true group traditional options that are fully available today, individual long-term care can be used to do executive carve outs, right? That was how we did executive carve outs before true group plans. There are still people today that are doing executive carve outs with traditional long-term care. Uh still hear about it, right? Um, there are some drawbacks compared to True Group, right? Um, guaranteed and simplified issue underwriting is not necessarily on the table for every traditional long-term care carrier today. Um and generally, you're not going to see much of a discount for doing that. You're not going to see Unisex rates with many carriers, but you can still get yourself a really nice case uh with a small group. If the business owner wants to compensate some of their key executives, say five to ten employees, that's five to ten applications for you right there coming out of the company checkbook. Um, kind of an open and shut case. But at the end of the day, the underwriting on the back end is going to be your biggest challenge. It's case management on every one of those applications, right? It's uh am I approved or denied? It's finding alternative products for those who do get declined. We know, just based on carrier data, that you know, approaching 50% of people can be declined depending on the carrier for traditional long-term care. It's not a one-size-fits-all product. But at the end of the day, if you're able to turn over every stone and find alternatives for those who are declined and set that conversation up like you would when you're speaking to an individual client, you've got a really, really nice case on your hands that really helps out the business owner, right? Tax deductibility is uh tax deductibility and tax mitigation, especially this time of year, is uh one of the things that business owners are concerned with the most when uh you really kind of peel back the layers, right? Um, and you could have yourself a nice case right at the end of the year, which is uh, you know, a lot of the time when business owners do this sort of planning um of uh you know three, five, ten apps at the end of the day, that's uh a fantastic case type to go after. So traditional's not dead,

Shared Care, Mutual of Omaha & Carrier Highlights

SPEAKER_02 27:16

guys. There's a a lot to like about it, and there's a lot of privilege that traditional long-term care has as a product. Um, and just highlighting what I like about some of the carriers. I talked about 10pey with NGL and Thriven. I talked about the honest LTC update, but I also like with NGL what stayed from essential LTC to honest LTC is their shared care rider. Shared care is big with traditional long-term care, but it's not bigger anywhere else than NGL with their third pool shared care, right? So it allows uh two spouses to you know not only um you know have access to shared benefit between them, but it is a third pool above and beyond the benefit amount that each spouse has for themselves that they can access for their care. So just a tremendous amount of value there. Um, I think shared care is always worth a look um when you're dealing with couples, generally pretty generous couples discounts across the board for traditional long-term care. Um, so maybe looking at the extra, what would you say, guys, 10 to 15 percent to add shared care, looking at that extra amount of premium to increase the chance that you're going to use more of your total benefit uh as a couple is a fantastic rider to look at. What I like about Mutual of Omaha, another carrier in the game. We haven't seen a ton of changes from Mutual of Omaha outside of process-related changes, right? Or maybe um underwriting related changes. Um I really like their custom solution product. They have secure and custom solution. Secure is kind of, I would call it their flagship, maybe a little bit cheaper than custom solution, but less bells and whistles. But custom solution allows for a couple of really interesting riders, like access to professional home care. I really like the professional home care rider on that plan. Uh, I love the inflation protection tinkering that you can do. And we're starting to see this with a lot more carriers as well. NGL is now offering one to five percent compound inflation protection. Uh, mutual of Omaha's kind of remains unbeaten for me because they have the ability to buy up to higher inflation protection levels with without evidence of insurability for many situations, and of course, buying down, right? Reducing the amount of inflation protection. And I think that's something that more carriers should offer. I love the idea of making a long-term care plan a real policy reviewable reason to keep in touch with the client every single year as income allows. Maybe your kid has graduated college and you've got most of those bills off your plate and you really want to focus on your long-term care planning. You can buy up your inflation protection to get a little bit more growth every year out of the plan. When you are getting into your older years and you're satisfied with the level of benefit that your policy has grown to and want to tail back the inflation protection, you can bring it all the way down to 1% compound, which is really, really nice. Um, they have 20-year terms of inflation protection, so it'll shut off after 20 years. They have lifetime. I believe they have even more than that. Moo Custom, thank you, Diane, offers joint waiver of premium, um, which is also a super nice rider. Um, claim for one means waiver of premium for both, which is super helpful. Um, I also agree with you, Diane, that NGL's underwriting is more strict. NGL's underwriting does not allow for rated cases anymore. Uh, it used to, but now it is kind of premiere, which is approved, and decline, which is decline, right? It's very black and white. Everything else in the underwriting guide is kind of an individual consideration. So knowing that, knowing they don't have room to say rate a case but still approve it, they're going to be a bit more strict than the rest of the field. And you want to be really careful with your pre-qualification with NGO. Uh, nobody wants really high, you know, decline rates on their record, whether you're a BGA, whether you're an individual producer, whether and a carry carriers don't want to have high decline rates either, right? So the more homework you do up front with traditional long-term care in general, but especially NGO, the better off you're gonna be, the better your ratios are gonna be there. Uh, let's see. Dave said, I think the lower premium with traditional long-term care in general is more approachable to clients that don't have assets to transfer for asset-based long-term care. Totally agree, right? Uh with hybrid, I know that hybrid has come up with uh options for recurring premium, right? Be it a pay to 65, pay to 100, a true recurring premium, uh monthly modes available for things like 10 pays, right? Um I still think traditional is still going to give your best bang for your buck for many clients if they don't have that need for life insurance, right? Mark and I, when we're on webinars for groups, we are predominantly dealing with life long-term care hybrid plans right now. And would you guess the number one question that we get on these webinars is I already have life insurance. Can I just buy these two things separately? Why does this product need life insurance? And there's a lot of reasons for that, a lot of really good reasons for that. But we still get people who ask, can't I just have long-term care benefit at the end of the day? And uh, you know, that's where the bang for your buck comes from for traditional. Every dollar is going into long-term care, a premium you put into the plant. Um, so where there kind of lacks flexibility, I agree, Dave, that um, you know, the the lower premium, the pay as you go, a bit more accessible inflation protection is still something that many people are going to be interested in. Um, so a lot of this is like let's kind of undo some of the bad rap traditional gets. Bill Comfort would be so proud of me. Um, if he were here right now. I'm surprised I haven't summoned him with this agenda. Um, but I think we need to undo a lot of the bad rap that traditional has gotten, not just out there in the world, uh, out there on the market and out there in Forbes articles or what have you, but also in our own mind. I think hybrid for many of us has um really developed this bias in our minds. We need to remember where traditional is still the strongest and kind of won't be unseated, right? I think that was kind of the purpose of talking about it as a product category today, is it's still strong in so many areas, it's undeniable. Um obviously, hybrid has taken a lot more of a market share because there's a ton of flexibility there, right? It makes um certain case types available, like Dave was saying, with um some sort of exchange, right? With 1035s. Um, you know, the ability to pay up in one shot, lib die or quit proposition. There's a lot of flexibility there, right? So it's no surprise that we're seeing uh a lot of market share being taken up by hybrids, but do not forget about traditional. Um, you will help clients in ways that you could not help them with any other type of product. So that's what I want you to remember. What would I like

What Traditional LTCi Needs Going Forward

SPEAKER_02 35:55

to see from traditional long-term care going forward? I want to see them start to copy some of the things that the hybrid market is doing. Number one being international benefits. I want to see the treatment of international benefits um become more of a priority to traditional long-term care carriers. I think that can only do good in a more globalized world today. I mean, long-term care is not strictly 100% an American thing, but uh, you know, it mostly applies to us over here. And people come into this country and retire and go back to their home country. Or uh, hey, I just decided that I want to live in Europe in retirement, whatever it may be. Uh, we need to address that. It's a societal change that I think the market, at least on the hybrid side, is doing a good job of adapting to. But I think traditional carriers need to do a better job. I think underwriting is a problem always. I I don't know exactly how we solve that issue, but traditional long-term care and long-term care insurance in general, uh, remains hard to get for some. We have more options than ever for alternatives, but uh maybe traditional is not interested in in being the one that kind of is more inviting on the underwriting side. That's part of the levers each carrier has the choice to pull. Generally, they're gonna choose to be tighter um on underwriting in general. Guaranteed premiums. Oh, Dave, I don't know. Are you like rubbing a genie lamp as you as you say that? I I don't know if we'll ever see it. I mean, it would be crazy if we saw it. It'd be crazy to see what the premiums are as well for for guaranteed premiums. Do a lot of asset-based, I can totally understand that. And this is not me um shaming anybody if you know the primary um percentage of the long-term care business you do is asset-based. I think you'll find that across the industry. I think as long as you don't forget traditional, it's you know, that's a perfectly understandable position as far as I'm concerned, especially given the client basis that people work with. You came off mute, Dave. Do you have anything else you wanted to say there?

SPEAKER_01 38:32

Yeah, I just wanted to share because uh I'm in brokerage, and so um I do a lot of hybrid long-term care, three or four million dollars a year uh through my advisors. And the number one complaint I get about traditional loyalty is the premiums, and I've gotten so many notices that they email me. And so I think

Rate Increase History and the Genworth Factor

SPEAKER_01 38:49

for your point, I'd love to see it make a like a soaring comeback, a roaring comeback to the market. But until you kind of get rid of that, I mean I got an email the other day where it has a letter from Genworth that was settling a uh the you know, the settlement letter that said, by the way, over the next three years, there's a 438% increase in your premiums. Right? And so the client's like, well, I just I'm done. You know, not to throw them under the bus, great company historically, um, but you know, until we can cross that bridge and kind of get past that pain point. I think a lot of uh uh carriers are are gonna struggle, you know, with that. But I love the LTPIs, what I call it, the institutional type ones that have that, because if they don't have access to move over to reposition for after-based long-term care, that's an absolute fallback, yeah. Especially for younger individuals. So I just want to throw that in there. Big crawl, you do.

SPEAKER_02 39:42

Yeah, I appreciate your insight too. Um, and it's a really good point. You know, the rate increase history is hard to outrun, right? We're seeing like the long-term care industry needs Genworth to be able to figure it out. I mean, think about the amount of business, the amount of long-term care business that Genworth has as a percentage of the market. We need them to stick around, and they are fighting tooth and nail to get it figured out and get it turned around. But I can also understand if there is some skepticism or reservation um with Care Scout, you know, being a Genworth affiliated company, right? I've heard many people say you can change your name, you're not gonna be able to hide from me. I know who you are in there, right? Um, just speaking candidly, right? I I totally understand that. Um, so that's gonna be an interesting development as well, you know, with the preferred provider network as well as just the traditional product that they're going to be releasing. Um, I think that'll be a really interesting thing to see. But as Diane even said in the chat, um, there are companies like NGL who really keep the belt tight on underwriting. And for as long as they've been around, I want to say where it's like 10-year anniversary, close. Um, they only have five claims on the books, and they have no legacy business. Because they came along much later into the game, they don't have those painful legacy blocks of business that feel like a ball and chain, right? So there are some options you can look at where um we're never going to be worry-free, but we have a lot of empirical data to show us that you know, maybe our likelihood of seeing rate increases with a carrier that doesn't have that sort of background and is really tight on the underwriting and you know, responsibly priced product from day one. Um, there's you know, some health there that we can see. Uh, let's see. Bob's thoughts on nationwide care matters two versus best competitors for a client with a heart stint history. That's a that's a that's an interesting one. Um compared to the rest of the field, I think like-based products are just in general gonna be harder on just standalone cardiovascular. It really depends with anything heart-related. What other comorbids do we have that are around it? I think you know, the obvious one that we think of is like diabetes. If there's any diabetes in conjunction, it's gonna be a really hard path forward with most all carriers, with a TIA, something of that nature. Uh, again, it's gonna be an uphill battle. Um, I think that one is probably best, Bob, if just pre-qualified with as many hybrid carriers as you can look at if hybrid is kind of that best solution. Um, you know, traditional long-term care is not going to be necessarily easy on cardiovascular conditions. They're still, you know, looking at that as a comorbid condition as well. Um, but you may find that a carrier lets you in on the traditional side if that's the only thing they're dealing with, right? And um, you know, no complications, no other follow-ups. I I think that's one that just really needs to be explored and pre-qualified at a wide range. I feel uncomfortable giving you kind of a blanket answer. Um, but that's kind of the best insights I can give from where I sit in my seat. Maybe somebody else has something to chime in on as well. Do clients ever ask about the lack of inflation protection when buying hybrids, or do we just hope that they don't bring it up? Um, well, I think the hybrid market has done a little bit better at a Addressing the inflation protection question. I think back when um, you know, it was just kind of your one America and money guard kicking around, and we hadn't seen the pack lifes, the nationwides kind of enter in all at that same time. Um, that might have been more of a conversation. I think we can show something with inflation protection, but it's probably for a recurring premium, not going to compare to what you can get with traditional long-term care. I think hybrid long-term care is built primarily for single premium, um, favorable for 10 pay. Um, recurring premium is gonna cost you a little bit extra, right? I I just think uh the quicker the carrier can get their premium dollars when they offer you a menu of options like that, the better leverage you're gonna get. Uh, and inflation protection has always made hybrid plans a bit heavier, right? They make all plans a bit heavier. Once you add in that inflation protection and the uncertainty of how long will I live and will I need care, you know, before I get there, it just creates underwriting complications. And of course, actuarial is going to price it as such. I just think traditional long-term care is going to be your best value with inflation protection. And I don't think we probably get clients asking about the lack of inflation protection as much nowadays, but interested in what anybody else thinks if they're hearing that out there. Anyone

Underwriting Q&A: Cardiovascular and Diabetes Cases

SPEAKER_02 45:36

else have any questions or comments? The discussion has been great. Thank you very much for all your questions and just kind of uh giving your point of view. I hope I didn't miss anybody in the chat. Um I think we got everybody covered. But anybody else have anything they want to add or ask, or did I forget anything? The Medicaid spend down comment. Yeah. Marcus, I'll I'll have a very gifted presenter um on the partnership program join us for a study group session coming up to walk through everything because it is very complex. Um, but I think the Medicaid conversation comes from the differences between Medicare and Medicaid, right? The common misconception that we see a lot of people struggle with. Medicaid is what covers our long-term care, not Medicare. Uh, Medicare covers some custodial care, but remember, our definition of long-term starts at 90 days or more, right? Medicare is going to be for there for you in the first hundred days and um not fully, right? And that's as assuming you can um meet the qualifications of you know three-day hospitalization and and so on and so forth, right? Medicaid is what steps in to cover our long-term care, and it's a plan of last resort, right? Because we have to prove we're significantly impoverished enough to qualify for Medicaid. So that means we have to spend down our assets in many states to as little as a couple thousand dollars of assets in order to meet that impoverishment requirement. Um, so with a partnership-qualified long-term care plan, the way it works in most states, not all states, is that if you have a partnership-qualified long-term care plan, let's just say I have a traditional long-term care plan with $500,000 of total benefit. Essentially, that if it was partnership qualified, it would give me $500,000 of extra asset protection against the Medicaid spend down. So let's say my state requires me to spend down to $3,000 of assets in my name to qualify for Medicaid and have the government actually step in to help me with my long-term care. In a case of a partnership qualified plan, you only have to spend down to $503,000 of assets before you can qualify for Medicaid. So that saves you from truly, truly significant impoverishment by allowing you to retain a level of assets because your policy was partnership qualified. And of course, that's not counting the 500,000 of benefit you have within your plan that's allowing you to fund professional care until that point, right? So it's about owning the plan, having the ability to fund professional care with the plan, having your optionality of where and how you receive your care, um, and allowing us to qualify for Medicaid before we have really spent and relinquished everything that we have, right? That's the most important thing to this. Um, Bob said, I have a great unlimited LTC plan with 5% compound of $12,000 a month now. The 5% is getting expensive. Thoughts versus 3% inflation. I think it's always good to talk to somebody about your situation in general, you know, depending on what age you're at today, and items like family history, right? Do you have longevity in your family? Maybe we keep that inflation protection on a bit longer. How much is it actually feeling tough to pay that premium uh financially? Will our carrier let us adjust down to 3%? Almost all of them do. Um, I think it's worth evaluating at the end of the day. I think $12,000 a month is pretty hefty. Uh, is it hefty in all states? The answer is kinda. I mean, it really depends, right? We don't know where you'll need care if you will need care, right? Um, for a nursing home setting, if you're in a cheaper state in the Midwest, 12K could be a pretty good number right now. If you're in Connecticut, we're covering maybe 50-60% of the cost of a nursing home monthly. Um, Connecticut is obviously at the extreme end. But I think it, yeah, depends on your age now, family history. It it depends on uh a lot of different factors. But I think even dropping from five to three, you're still getting great benefit growth, as far as I'm concerned, especially since you're at 12,000 a month today. So you will continue to have that grow. I think an adjustment based on your financial situation is always smart. I would just talk to, you know, whoever you got the plan from, or um, you know, a specialist um in general to see if that's truly the best fit. And only you can decide that at the end of the day. The specialist is gonna be there to crunch the numbers, guide you, give a recommendation, but only you can truly decide that as far as I'm concerned.

SPEAKER_00 51:30

Um, let's see. I've got a comment on that 3%, 5% thing. Yeah, go for it. Then they price to 5% and they just add on some extra dollars just in case it didn't price enough because it scares them. So when my daughter bought her traditional policy at age 40, we looked at 5% and using um uh the uh NGL software, it shows you what your benefit would be at age 85, and then we went and looked at a 3% inflation, bought a bigger benefit to get the same number at age 85 and saved her like about $700 off her premium.

SPEAKER_02 52:09

Yeah, I I think um less adjustments can actually be made with an enforced plan, but I totally agree with you know the perspective that you brought is that like many cases five percent compound is offered by some carriers because it's legally you know mandated, like they have to offer that. And oftentimes they will price it on a shelf where uh it's kind of just out of reach financially for people, right? Because they know that cases with longer benefit periods and with higher amounts of inflation protection increases their overall exposure risk when that client gets to claim age, right? So in many cases, you could find significant savings reducing from five to three percent. Um, but it's all about what that enforce illustration would look like. So the carrier should be able to provide you an enforce illustration of what you have and should be able to give you the figures of what it would save you to reduce to that 3%. So it's a fantastic question, comes up a lot, um, even for new business, depending on what age the client is that's in front of you. Um, you may look at a 20-year inflation protection as opposed to lifetime, right? If they're in their older ages. Um, so there's a lot of tinkering that you can do there. Do you know of a carrier traditional or hybrid that offers a spouse with type 1 diabetes to get coverage? The state is Florida in the ages of 51 and 52, diabetes under excellent control, no comorbid issues. I believe Mutual of Omaha, if um we have a very good A1C, no other sort of complications like retinopathy uh or anything of that nature, good control, um, no other comorbids, hard conditions can be tough with something like that. I believe mutual of Omaha will take you under 50 units of insulin a day. I and and that would be, I think, class one rates, but that is still a traditional carrier that would um you know have the capacity to make that offer. I hope I'm not going off of old information. Uh let me just double check that. I believe that is the case, though. Let's see. One moment, please. Talk amongst yourselves. Yeah, mutual of Omaha, if it's been present less than 20 years, controlled and stable, no other comorbids, less than 50 units of insulin per day, class one rates at best. So I will say it's still an uphill battle. There are carriers like Aetna on the short-term care side, if it's available in your state, that will take, I believe, uh under 100 units of insulin, if I am not mistaken. True long-term care nerds know this off the top of their head, but the good ones double check. Uh Aetna is under 49 units of insulin per day. Insulin-dependent diabetes can be tough. Let's say Mutual of Omaha is your only game in town there, if very healthy otherwise, and kind of meeting the conditions that we talked about there. Uh, I would just pre-qualify the heck out of it. I'm always going to say that at the end of any underwriting question that I get. Um, I agree with Romeo. Perfect. Yeah, great minds think alike, my man. Um all right.

Final Thoughts & Advisor Takeaways

SPEAKER_02 55:51

That took us right to the top of the hour. This has been awesome. Thanks for uh chatting with me, asking a bunch of questions, contributing what you're you're seeing out there. Uh really hope you took one or two things with you that will help you in a future client meeting. Um, and as always, we're here for your support. So I appreciate the time, and we'll see you this time next week. Be well. Talk to y'all soon.

SPEAKER_00 56:16

Thank you.