Hybrid LTCi Study Hall

Hybrid long-term care products are some of the most innovative and competitive in the LTCi space, but knowing which carrier fits which client requires more than running a spreadsheet. Learn how to navigate the hybrid market with confidence.

In this Study Hall edition of the Buddy Study Podcast, Jason Dutra leads an open-forum deep dive into life/LTCi hybrid plans, specifically life insurance chassis products with extension of benefits riders. From product architecture and carrier competition to underwriting sweet spots and guaranteed premiums, this session is designed to sharpen your hybrid LTCi fluency and help you make better-informed carrier and product decisions for your clients.

We explore:

• What makes hybrid LTCi distinct: innovation, competition, and flexibility as core market drivers
• How hybrid carriers are differentiating on benefits — retroactive elimination period payback, international coverage, cash indemnity, and indexed options
• The pricing landscape: why carriers cluster closely and how repricing downward is reshaping market share
• Underwriting trade-offs between streamlined processes and leniency — and what that means for your clients
• Carrier-specific underwriting sweet spots, including Bright House SmartCare and One America
• How annuity-based LTC hybrids compare to life-based products, and when age shifts the math
• The Mutual of Omaha rate increase conversation and what it illustrates about traditional vs. hybrid premium guarantees
• How to use Product Buddy to filter carrier and product type recommendations by client profile

This episode is designed to help advisors:

• Understand the structural differences between hybrid product types and when each applies
• Identify underwriting niches that could save impaired-risk clients
• Explain the premium guarantee advantage of hybrid plans in rate increase conversations
• Use available tools to match clients to the right product type faster

CHAPTER MARKERS

0:00 Welcome & Episode Overview

1:17 Defining Hybrid LTCi — Nomenclature and Scope

2:17 Why Hybrid: Innovation, Competition, and Flexibility

5:08 Carrier Competition and Pricing Dynamics

9:02 Joint Survivorship and Creative Product Structures

10:17 Underwriting Across Hybrid Carriers — The Trade-Off

12:50 New York Life AssetFlex & Captive Carrier Underwriting

15:10 Is Hybrid LTCi Priced Sustainably? Open Forum Discussion

18:36 Life vs. Annuity Hybrids — Comparing Product Chassis

26:02 Securian Secure Care 4 Update and Recent Market News

33:37 Underwriting Sweet Spots: Bright House and One America

38:59 Using Product Buddy to Match Clients to Carriers

42:09 Mutual of Omaha Rate Increases — What Advisors Need to Know

47:19 Guaranteed Premiums: Hybrid vs. Traditional LTCi

51:21 Closing Thoughts & Wrap-Up

47:19 Guaranteed Premiums: Hybrid vs. Traditional LTCi

51:21 Closing Thoughts & Wrap-Up

Watch the video version:

https://youtu.be/gtBpwhGzZhI?si=z0FhQaJU8l8TX5UY

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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_01 0:00

Hey everyone, welcome to another edition of the Buddy Study Group. And I decided that because we had so much fun doing this last year, because I got um some really good feedback around these sessions, I'm gonna bring back our study hall series on the study group. And for those uninitiated, this is really just a good opportunity for us to dive into one specific product type and you know just do a quick overview of the appeal, sales ideas, good candidates for the products, and review some of the recent updates, review some of the major players in the market. And after we do that review, I'm hoping this is something that we can kind of have as an open forum and and and really throughout so that we can help each other learn. If uh one person can pick up one thing from today's call, I think that's a great thing. Um, so if you have any personal preferences, things that you've come across, any questions that you have about a particular product, definitely feel free to drop it in the chat. We'll make this kind of dynamic.

Defining Hybrid LTCi — Nomenclature and Scope

SPEAKER_01 1:17

But today is um just to keep the name short, hybrid long-term care. And um, you know, I'm saying that with kind of bated breath because the nomenclature in our industry is just tough, right? So what I'm talking about specifically are life long-term care hybrid plans that have extension of benefits riders. Okay. So, yes, there are other hybrid life long-term care that are acceleration products. We won't be going over those today, but um, you know, you may refer to these products as linked benefit, you may refer to these products as asset-based long-term care. There's about a billion names for these types of products, but hopefully the definition helps you understand what we're going to be talking about today. So why don't we just dive right into it?

Why Hybrid: Innovation, Competition, and Flexibility

SPEAKER_01 2:17

So, the appeal to me of hybrid long-term care, just at a high level, is innovation, competition, and flexibility. I think those are kind of the three main descriptive words that come to mind when I talk about these products. So, innovation, I think we see that um hybrid long-term care carriers tend to be the first mover on a lot of things or um tend to provide us the first instance of certain types of benefits that we see. So, for example, certain things like um retroactive elimination period payback, which we're starting to see more of, started in hybrid long-term care with nationwide. We're seeing it spread to carriers like Secure and so on. Um, you know, even seeing separately identifiable long-term care premiums to work some tax deductibility in, um international benefits. I see hybrid carriers really leading the way on international benefits far and away. Um, and a lot of these benefits, even being the leaders in in cash indemnity, not everything I mentioned there is innovation, but I think just kind of being on the cutting edge of what's offered in a long-term care plan, uh, I think that really rests with the hybrid market today. Um, and I I think even though there's a lot of these cutting edge benefits, right? I think um a lot of these products are built very, very similarly. They a lot of them look very similar to each other. Um, obviously, it kind of all really got started with products like MoneyGuard um that are still around today, but products like Genworth TLC, you know, some of these products were the earliest hybrid plans, and a lot of um the plans that we've seen enter the market from that time look very similar and are structured in a very similar way. A two or three year base plan with uh anywhere from you know around two to four year uh extension of Benefits Rider, uh, the live dire quit story that everybody knows, right? That um most of us are using in some way, shape, or form to really simply explain these products. They all are kind of structured very similarly. And because of that, um

Carrier Competition and Pricing Dynamics

SPEAKER_01 5:08

I see competition happening a lot in this market and generally in a couple of main areas. So one of the areas being those really kind of cutting-edge client-centric benefits to stand out when we're comparing on benefits, but of course, also uh pricing. Uh, pricing in the hybrid long-term care market is hugely competitive. And I don't think there is another market in the long-term care space right now where I have seen carriers repricing their product downward or carriers coming out with um all of these extra benefits on their plan and not repricing upward. Um, so there's a a lot of competition for market share in the hybrid long-term care market, and generally the way these carriers like to do it is offering um, you know, creatively richer benefits or trying to be one of the cheapest games in town, right? How can I stand out on a spreadsheet when there's 12 other carriers in the market that I'm competing with, right? And that competition really benefits consumers. So there's a ton of action in this market. There always seems to be. And when there is that action, when there is that competition, when carriers are trying to stand out, generally that is in a way that benefits clients. Okay. So um that's what I'm seeing in this market. Uh again, flexibility is huge, cash indemnity benefits, international benefits. I think the hybrid market is all about flexibility, even in the innate nature of the product structure, right? Life insurance is there if you don't need long-term care. The products are very long-term care forward in nature because of how they're structured, and the opportunity to um, you know, surrender the contract and get some amount of your money back, flexibility with how the premiums are paid, right? We see single premium. Uh, we've seen the market take great strides and ongoing premium, pay to 65, pay to 100 annual recurring premium, and lots of different flex pay options. Uh, one, three, five, 10, 7, 15, 20, um, pay to 65. It goes on and on, right? So there's tons of flexibility, which makes it easy to hone in on an option that a client may need given their financial situation. The opportunity for 1035 exchanges are there as well, um, allowing you to sort of uh find the money and have an easy place to put that money to leverage it for long-term care. So um obviously there are other markets that are hot right now and have uh a lot of action. And there are some markets that um, you know, are kind of at a plateau right now or just kind of waking up from being dormant. But I think hybrid long-term care has just always been an extremely active and an extremely competitive market, and that's why it's getting a lot of the attention that it's gotten um, not just today, but you know, in the last especially 10 years or so, there's just been so much growth uh across

Joint Survivorship and Creative Product Structures

SPEAKER_01 9:02

the market. So um got some notes here. I think I've gone over a lot of these items, but um I think another really big piece of this is joint survivorship coverage. It's also very, very creative with asset care and nationwide care matters together being in the market, allowing um, you know, two insureds to enter into a second to die life contract and and share the long-term care benefit uh from that. I think that's also a very creative structure. Um, again, carriers are not afraid to reprice, it's inherent to being able to compete in the market in a lot of their minds. Um let's see what else we have. Yeah, carriers in the hybrid space are just not afraid to pivot, move fast, and offer something that most other carriers or product types are are afraid, afraid to offer. Um, but I want to speak a little bit from a high level on underwriting for

Underwriting Across Hybrid Carriers — The Trade-Off

SPEAKER_01 10:17

these hybrid plans because I think the underwriting stances of carriers really do run the gamut, right? I mean, um it's all going to be proportional to how much homework the carrier is doing on the underwriting side when underwriting a prospective insured um that will determine how lenient they can be, right? We have carriers like One America who tend to be quite a bit more lenient um than their peers on the underwriting side, but they also have a much more detailed underwriting process that a prospective insured generally has to go through with you know um exams and lots of medical questions. Um, but because they're taking in a lot of data, they can feel more ability, flexibility to give the benefit of the doubt where they can find it, right? Um, but for many carriers, it's a bit of a double-edged sword. There's not a lot of homework being done compared to say traditional long-term care um by hybrid carriers, and that is specifically for the purpose of creating a very streamlined process where we don't have apps uh hanging up in underwriting forever where we can help it, and the application process is quick. So that is a client experience sort of move. But the other edge of that sword is that if we're doing less homework, we're taking in uh less information, uh we have to be a little bit more conservative with the information that we have, right? So if we're not taking in a ton of information, I don't have a ton of room to give benefit of the doubt, right? Um, so you can see clients who you may think are a good candidate for hybrid long-term care from an underwriting perspective, um, get denied, get postponed, whatever it may be. I think it's down to how good your relationship is with your underwriters and how good your pre-qualification is to determine if that client eventually ends up in a good home there. Um, but that's just something to always kind of have caution about.

New York Life AssetFlex & Captive Carrier Underwriting

SPEAKER_01 12:50

Let me read the chat here. You have comments on New York Life asset flex. Uh pricing seems very competitive, but speaking to your comments, underwriting might not be great. Um, Rhonda, I can only really give kind of uh generalities, which may not be very satisfying because I haven't worked with asset flex very much. Feel free to speak up if you are somebody who's worked with the asset flex product. But um uh again, may not completely be the case, but I've noticed with captive insurance companies that underwriting tends to be one of the first buttons pressed for making the product a healthy piece of the portfolio. Generally, underwriting can tend to be tighter um for a number of reasons. Like you said, offering competitive pricing, or maybe it's a dividend-paying product, whatever it may be. Underwriting is generally one of the levers that's pulled there um by these insurance carriers. But has anybody in the crowd um ever taken a look at New York Life Asset Flex? Have you run in it into it competitively? Um, do you have a referral partner who works with it? Anyone have any experience with that product that might be able to uh help Rhonda out? I can take a look into our um product information as well, um, just to see um if we have any information on it that I can pull up. It doesn't look like we have much here. Um your New York life agent sends all long-term care folks to you. Is is he still? Because if he is still, um I wonder if that's out of not liking asset flex or uh maybe sending you a specific type of uh client that might not be a fit. I'm happy with it. That's all that matters, right? At the end of the day. Um let's see. Robert says uh a little bit of an off question, but aimed at the hybrid products. Do we s do we feel like they're pricing the products well still

Is Hybrid LTCi Priced Sustainably? Open Forum Discussion

SPEAKER_01 15:10

thinking about the expansion of benefits and the past traditional long-term care pricing troubles because they are working on grabbing the market segments? Yeah, I I I always think uh a healthy bit of skepticism is important. Um, I think, especially when it comes to you know, guaranteed premiums, right? A lot of the premiums are guaranteed or instantly paid up, so it's definitely something to think about. I don't know how available Mark is, but uh, you know, having an actuary friend weigh in on this one uh would be really good, but also interested in what everybody else out there thinks. Um, you know, I think at the it's really gonna vary carrier to carrier and what they're um offering in exchange for these premiums, but in many cases, um having the premium all paid up front is definitely something that is uh helpful to these carriers. You know, they're not um say in in single pay cases giving out uh a waiver of premium five to ten years into a contract and then having to pay out claims dollars uh for years and years and years in those single pay situations. Um, but that being said, we have seen a rise in um you know ongoing premiums or recurring premiums with hybrid long-term care. Um, so I'm I'm interested in what you guys think. Um do you take issue with the way that hybrid long-term care products are priced? Do you think they're right in the pocket, right in the sweet spot? Do you feel like uh maybe we're getting a little bit too much benefit uh for the premiums paid or or maybe the opposite side of the spectrum? I'd be really interested to hear from you all on what you think. Um, and and it can vary carrier to carrier. So if there's a specific carrier where you're like these guys are completely going off the rails, I think um if anybody were to kind of speak up regarding one carrier, I would say what Robert just put in the chat, Brighthouse. Um, Brighthouse seems to be that's like kind of their main area of competition is uh showing up to presentations and our pricing cells are are cleaning everybody out. Um, so I'd be interested in the thoughts on Bright House, especially given that they have a lot of really nice benefits too. Um, there's some really interesting underwriting sweet spots um that you can find with Bright House. Um so, you know, Bright House might be the one where I would expect many people to speak up about. Um, but at the end of the day, we'd love to hear from you all. Um yeah, any other questions, comments uh at this point right now before I uh walk

Life vs. Annuity Hybrids — Comparing Product Chassis

SPEAKER_01 18:36

through a couple of notes?

SPEAKER_03 18:38

Okay, so just real quick, since I'm kind of new in this space, sort of you what we're talking about when these things have been brought up, Bright House or the New York Life. Is that uh similar to the the the the the uh bridge by Equitrust, like these products where you you put in a hundred thousand dollars, and then in 15 years, if you need it, you'll have 300 perhaps thousand dollars for care or whatnot.

SPEAKER_01 19:03

Is that so these are um similar but not similar? They're you could both consider them hybrid plans. The Equitrust Bridge is like an annuity hybrid long-term care. We're looking at life hybrid long-term care, and they function. Okay, like the One America or Yeah, One America is in that category. They function um a little a little differently from annuity hybrid plans, number one being on a completely different chassis. I I think the way these products are kind of sold and understood is uh live dire quit, right? It's designed to have a death benefit there if you don't need long-term care. There's pretty rich long-term care benefits in these plans, and they're long-term care forward first and foremost, if you need it. And then there's generally either cash value or some sort of return of premium provision if you want to walk away from the contract and and realize some of your value back. Understood. Thank you. Yep, of course. Diane, do you have something to uh to add there?

SPEAKER_05 20:08

Sure. Well, I'm as you were asking about um the the pricing and stuff, is it is it feasible? When I when I look at quotes and run quotes for clients, I I find out what they qualify for and I'll do a side by side of all the companies. And what I see when they're side by side is the amount of money you're buying and the amount of premium that you're paying is not that much different company to company. You know, if it's if it's $800 a month for 10 years with nationwide, it might be $792 a month for 10 years with Securion. It's not enough different to make a difference. So um, because they're priced so similarly, that tells me that they're all uh pretty close on what they're considering the risk to be. So there's not one that stands out further than the other. The Bright House we're gonna see a little bit um off because they don't have it's not whole life, right? It's universal life. So they don't guarantee the cash value, they guarantee the return of premium. So we're gonna see a little bit of an advantage on premium there sometimes, depending on the age and the state. But they're they're not, if you look at them side by side, none of them are really that much different if you're looking at the same variables. So they probably have it figured out pretty strong.

SPEAKER_01 21:20

Yeah, you make a good point there that um there is not a carrier that is essentially like running away with it in many cases. Um, whether they would claim to be very competitive in every single cell or the best in class and you know, the industry leading amount of cells, at the end of the day, we don't see a carrier that's like 15% um, you know, cheaper than any option out there, all things being equal, right? And when we talk about there being a lot of competition and carriers kind of looking to be among or at The cheapest in the market in certain areas, it's by a fraction of a percent generally. But we still do see, you know, repricing downward in order to kind of get to that if they find they're lagging in certain sales, or they'll come out and say, like when you have a wholesaler visit, you know, for 65 to 68-year-old women, we got three percent better, right?

SPEAKER_05 22:28

Go get them.

SPEAKER_01 22:29

Yeah, right. Right, call cut soar by age in your book and and call them all.

SPEAKER_05 22:34

Yeah, so it really comes down to the niche. What is each company offering that's different? And whatever the client is most attracted to is the best plan.

SPEAKER_01 22:44

Yep. 100%. And uh, you know, if you can't beat them, join them too. That's like the nature of the competition a lot. Well, Securion takes a look next door and says, I really like nationwide's uh elimination period payback, where they'll uh essentially reimburse you um for the uh elimination period once satisfied. I think I'm gonna add that. Or, you know, most predominantly I've seen um, you know, I see that company is offering full international benefits. I think I'm gonna do that. You know, um there's a lot of monkey see, monkey do, but it's it's like we said, um you compare on pricing all things being equal, right? So a lot of times carriers are fighting for well, if I can't um, you know, if I can't be the the cheapest in town or the one of three cheapest, I'm at least gonna be all things being equal and try to figure out my own way to stand out, right? Um, and it's not even just in the nature of how do I make this stand out to clients. Um, we're seeing products that are also saying, how can I stand out to a distribution channel that maybe feels unrepresented, right? So we're seeing index products enter the market, we're seeing uh products like MoneyGuard Market Advantage enter the market, Brighthouse um being uh one of the popular index products. And just when you kind of look inside the mind of a carrier who creates a product like that, a lot of the times it's saying like financial advisors need to be doing more long-term care planning with their clients. And if we can put out a product that's palatable to them, that um, you know, can really speak to their strengths that we know they're gonna sink their teeth into and um gravitate toward and understand well and be able to present with authority. Because uh, you know, many advisors when they're dealing with long-term care products, you know, tend to say, um, maybe it's just easier if I tell my client to self-fund or, you know, I have a problem closing long-term care products versus, you know, selling securities or ETFs or whatever it may be. But an index product kind of pulls things more into the area of their expertise. And as long as they kind of know the basics of long-term care planning, that will get more distribution to ideal clients, right? So that's a really interesting play that I see as well. That's uh only afforded to, you know, uh life plans with long-term care or annuity plans with long-term care, right? Even bridge um on the index side in the annuity space. Uh Gail said pricing's also affected by the market. The carrier is catering to age or partners or reimbursement for exactly. Yeah. So um there's just a lot of ability to be flexible because of the way the products are constructed, are built. Um, and we're just gonna continue to see them kind of take advantage of that.

Securian Secure Care 4 Update and Recent Market News

SPEAKER_01 26:02

Um, but updates, just quick product updates. Um, definitely feel free to keep the conversation going in the chat. All right, we'll we'll we'll keep the conversation going in the chat. Robert says, Do you feel something like the One America or Lincoln AOB two-year reduced benefit but cash catering to the dementia risk? Um could you could you unmute and just uh add a little color to that? I just want to get a get a better sense of what you're asking.

SPEAKER_02 26:32

Yeah, of course. So it so one America specifically, like you know, they have the reduced uh amount of benefit available in the first two years of acceleration.

SPEAKER_01 26:42

Ah, yes.

SPEAKER_02 26:43

Um, but in in most cases, what I see just like is that it the first two years is sometimes that's a lot of home care. So then it's catered back that way to the dementia risk with the like lifetime benefit availability, specifically with like One America, but the Lincoln has that reduced cash benefit option too.

SPEAKER_01 27:04

So I was just wondering if you think there's like specific markets of risk they're they're targeting or yeah, it's it's an interesting question, and there's like a lot to unpack in answering it. Um, I think when you can take a smaller portion of the monthly benefit that you're generally allowed under the contract in cash, um I think the carrier in many cases wants you to take that because at the end of the day they are on the hook for less benefit overall. So I think that's uh something that uh, you know, a carrier would market as mutually beneficial. And in many cases, it can be, right? If you get flexibility as the client and you can stay at home or uh reimburse uh an unskilled caregiver, I think uh there are situations where you'd sign up for that, but it's also good for the carrier in the sense that um I know I don't have to pay out the full monthly benefit to this client because it's a one or the other proposition to take that reduced cash benefit, right? Um, and overall, from the long term, that reduces the chances that you're going to use your entire benefit. Um, so I I think there's things working for both sides with that. Um, but I do think one America is kind of an interesting case study around your question, anyway, because a critique of One America's plan, and one of the ways they've kind of historically been able to save themselves some overexposure is by either not offering inflation protection on the base plan in certain cases, or offering a very expensive inflation protection on that base plan. And you need to get through the base plan before you get to that EOB, which contains all of the um, you know, really nicely priced inflation protection, the options for lifetime unlimited benefit, right? So um, as uh one of my long-term care specialist friends and my old BGA used to say in conversations, you you kind of have to get through the the browner pastures before you get to the green pastures of the EOB. I think that's an intentional product design. It allows them to kind of be able to offer lifetime unlimited benefit in any capacity and and and feel good about it. Um yeah, it's it's it it kind of helps to support their ability to kind of take on that risk of you know a cognitive claim where they're on lifetime benefit and they're going to be paying out a claims for a very, very long time. Um Gail says reimbursed benefits versus cash indemnity tend to be less costly. One actually I worked with years ago commented that product managers try to differentiate from other products, said it's really all about the distribution at the end of the day. I agree. You know, if you can catch the eye of distribution and what what do we care about as distribution, guys? We care about being able to offer really great benefits. We also care and should probably um care more that we're offering cost-effective solutions as well, and the market is kind of rising to the occasion as well, offering us um, you know, solutions that are a bit more affordable or manageable on a recurring pay sort of basis. But we're interested in offering benefits that work for our our clients. And uh, you know, both distribution and insurance carriers are kind of tied together in the fact that we sell promises and the company insurance companies need to keep their promises and we need to properly represent and uh hold those carriers accountable for the promises being sold. Um, so yeah, I think it's about attracting distribution and attracting clients, right? If you don't get the eye of distribution, your product's not gonna be um, you know, promoted to anybody at the end of the day. Um yeah, I love this conversation. Um Robert, I I don't know if I uh understood.

SPEAKER_02 31:25

If you wanna if you wanna unmute and just a comment on what you're calling, nothing nothing to add.

SPEAKER_01 31:31

Oh, okay. Okay, gotcha. Um yeah, I think uh at the end of the day, you have to impress distribution. So if you if it's on a pricing spreadsheet or it's I offer this benefit that I think uh your clients will really enjoy, and I think you will love to bring this up in a presentation, that's what matters, and you see a lot of competition with that in the hybrid space. Um, just a couple updates. Uh, we went over it in a previous study group last week. Um, but remember, we have secure care for enhancements with no pricing changes. Pretty crazy. Um, death benefit will at least be equal to the premium paid at all ages. They added a 20-pay option, they changed their international benefits, enhanced their international benefits, 100% of benefits internationally. Um 90-day elimination period payback. Um yeah, just lots of really, really good uh additional product features there. Um anything else that was in hybrid long-term care. Anyone else see any interesting news coming out of the hybrid space um that I may have missed? We had a lot of well-rounded information, but Securian was kind of the major one. I mean, it's it's been a while since it's been out, obviously, but um I think the last new news we heard from One America was Asset Care 2024, um, with a lot of interesting enhancements there. Um nationwide's been kind of focusing on the release of their new annuity. Um, but yeah, I would say maybe the quietest that I've seen the hybrid long-term care market, and it hasn't really been all that quiet uh at the end of the day. I could take a look at some uh underwriting sweet spots for you all. Has anybody seen any

Underwriting Sweet Spots: Bright House and One America

SPEAKER_01 33:37

interesting um underwriting pockets in the hybrid long-term care market to this point? Uh, I did mention Bright House. Um and Bright House is interesting, just kind of like One America, that they can um, you know, table rate folks so they can go up to eight tables for mortality risk. One America can go up to eight, eight morbidity mortality. Um, Chris says one America in Texas had a good training session today. That's good. Anything uh interesting that you learned, feel free to let me know. Um underwriting. Brighthouse can be friendly toward things like cortisone shots as long as they don't affect activities of daily living. They're friendly towards some cardiac conditions, very specifically anxiety and depression, uh, a relatively liberal build chart for their underwriting. So those are some of the things um that I see from Bright House One America. I would say you can expect the same there. I expect to see a very liberal um build chart for their underwriting as well. Um, I am going to check into what else I have here in Hey Jason.

SPEAKER_03 35:02

Again, I'm sorry, these are all plans then that you are paying like on a monthly basis typically, and has nothing to do with qualified or non-qualified funds. Is that right?

SPEAKER_01 35:12

Uh there is only one product on the market with one America that is like specifically set up to be able to receive qualified funds. Correct. Um that's kind of one of their big sort of differentiators. Um, but when we talk about like non-qualified premium to these hybrid long-term care carriers and products, you can see an ongoing premium. You can see things like pay to 65, you can see things like pay to 100, you can see single pay is most common and is going to result in the best leverage. If you give the carrier all the premium up front, uh, you're going to get kind of better leverage in exchange for that. But you can also see things like 10 pays, you can see three pay, five pay, seven pay, you can see 20 pays. There's a lot of flexibility, and that's one of the big descriptors I use for hybrid long-term care is flexibility in in premium um and and in all things, really. At the end of the day, carriers are not afraid to be flexible in this market. Uh, let me see. What else did I have for Bright House? Um, Bright House is kind of simplified underwriting process for clients under 65. I find really good. Um, and excuse me, it's eight tables for morbidity with Bright House, four tables for mortality is what I have here. Um family history was another thing for Bright House, and I think which one of the things that makes people kind of go, ugh, um, family history is generally not considered or part of their underwriting questions for smart care. Recreational marijuana use is also fine with smart care, so that can be kind of a sweet spot more nowadays than ever with legalization in a lot of states. So if if it's causing a social or occupational issue result resulting in loss of employment or psychiatric issues, obviously they're not going to look at it. But um, you know, no residuals, kind of normal recreational use um is okay with Bright House. Um, recently completed physical therapy is also something that they'll look at. Um, so Bright House can in many cases consider immediately upon creation of uh upon completion of PT. Um, so there's a lot that they're doing for kind of cases that are postponed elsewhere where they're trying to get um some of those folks in and underwritten, uh, which is interesting. Um let's see. Yeah, we're seeing um annuity long-term care plans like really heating up, and I think uh you nailed it, Gail, for the older ages, they tend to look a lot more favorable than hybrid life long-term care plans. Many times when you see yourself getting into the upper 60s or lower 70s with a client, you can um you know start to see the plans get a little bit heavy, you know, they start to they start to sink a little bit, and that's where um you want to compare both products, both product types for those in that age group. But at the end of the day, um I think annuities can tend to look more favorable there are starting to look more favorable there. Um and I just want to give a quick plug to one of our tools on the individual side in the buddy system. Um

Using Product Buddy to Match Clients to Carriers

SPEAKER_01 38:59

for those of you who haven't seen it, if you're in the buddy system, you can click on individual and go to product buddy. And this can help you kind of get um some presentation materials, but also kind of filter out some carrier and product type options. So if you have the client's age, if you have uh their state, we'll just use Kansas. If you have a general assessment of their health, um, obviously don't put excellent unless you know absolutely it's excellent health. Um, most people, because it is average, will end up in average health, right? Um, and you can put in kind of your preferred funding for pay as you go, single pay, limited pay. And essentially, based on what you enter, we will recommend different product types. And you can see um life plus LTCI extension is essentially the products we're talking about here. You can get some recommended carriers and you can get some highlights for the product, but you can also come up with these one-pagers that you can download that will basically give you a lot of the specs that we're talking about today. Like who are the ideal clients for hybrid life and long-term care? So, with respect to age group and what is kind of the overall market range, what's the lowest age? We could look at this at what's what is the highest, what's the preferred funding of kind of the ideal candidate, what are their goals, right? Um, generally, this is repositioning um a small piece of your assets to protect the rest as best you can, right? Um, and and just again, what do the ideal clients look like? And why do we look at hybrid long-term care from a client perspective, right? Talking about that versatility of the live, die, or quit, talking about the strength of cash indemnity benefits that are prevalent with hybrid long-term care plans. Many have streamlined underwriting. We talked about the premium flexibility. Um, beyond joint survivorship with partners, we also um see a lot of couples discounts, right, with hybrid long-term care plans. And of course, you know, last but not least, in inflation growth um can be very, you know, um budget-friendly for many, or, you know, won't um completely break the bank to add inflation protection to many of these plants. So um that's a one pager you can leave behind with a client just to remind them, you know, what's the importance uh of the hybrid plans we talked about? Like what are the big um key features? So I think that's about all I had planned. Does anybody have anything else that they want to discuss, ask a question about, um, put their two cents in um on hybrid long-term care before we wrap up the study hall today?

Mutual of Omaha Rate Increases — What Advisors Need to Know

SPEAKER_01 42:09

Marketing ideas. Okay. Gretchen, write that down. We gotta put a study group session together for marketing ideas. You're requested.

SPEAKER_00 42:21

Thank you, Chris.

SPEAKER_01 42:30

Rate increases with mutual of homologous there. Oh, I've I've got you on mute if you're trying to. You're on mute, yeah.

SPEAKER_04 42:53

If you if you tried to I I just feel that it's um it's the one carrier that I was really hoping would hold out. So you know, because they really dealt with, you know, when they did the new the 20, what was it, the 2021 or 2022 product, you know, when they repriced it, um changed the discounts, but it wasn't uh presented as a rate increase. It was just I always say smaller portions at the uh restaurant. So um they had to do that, but I I'm just getting deluge. I don't know if there are anybody else's and how much they sold Mutual Omaha. But um the way the carrier actually communicated with the client was very convoluted, not clear, not dated. And it's really turned into um you know, a lot of um work on our end, which I don't mind doing, but a lot of this is just how the carrier handled the communication. And also, um, I just was not expecting um this kind of rate increase uh with neutral Omaha.

SPEAKER_01 44:09

Yeah, because they were they were pretty rock steady for uh a long time, not really. It was kind of no news is good news for for the longest with them. Was this on the 2013 product generation or earlier?

SPEAKER_04 44:25

It was yeah. I mean, when they were issued, they were being like 20, 13, 14, 15. But um, you know, the people who bought it after 2020 just did not get as rich of a plan as um, you know, as the people prior to that time.

SPEAKER_01 44:43

So um I'll keep my ear to the ground on that.

SPEAKER_04 44:46

Rate increases never help.

SPEAKER_01 44:50

Uh agreed. It it always creates uh you know stigmas.

SPEAKER_03 44:54

Can I ask a question since I spent many a year in the you know property casualty field? Do rate increases for someone, Gail, for instance, that you sold a plan to in 19 or 2005, do they have increases or do they just cut their benefit for them?

SPEAKER_01 45:11

They're not built in um rate increases like other products may assume, yeah. Uh rate increases like throughout the life of the contract or yearly or at certain age bands. It's basically premiums are designed and assumed to remain level. Um, but if there is any sort of um you know, petition to online right now, you can't make a state insurance uh if there's any petition to a state insurance um organization that says, you know, the insurance commission that says uh here's substantial proof that you know the ratio of benefits paid to premiums taken in is out of whack. They can petition for a rate increase and can be approved or denied by the state insurance commission, most of the time uh approved if they're showing you know credible evidence.

SPEAKER_04 46:14

But they also can go over to like say a period of time. I remember with MetLife when they had huge uh rate increases here in Illinois, specifically since I was a policy holder, they faulted. And, you know, they were going to do it. If they negotiate, the Department of Insurance often will somewhat negotiate with the carrier um how they're going to spread this rate increase. And it's usually over time. So um, you know, the question, I don't know if anybody else in the group gets this often is, you know, when will there be another rate increase? And, you know, we say, well, we don't know. We tell them why, but it just I think that it's so important for the carrier to do a better job or a good job of explaining the choices, the outcomes. Some do it fabulous, and um I'm really disappointed with Mutual of Omaha, how they handled it.

SPEAKER_01 47:05

Thanks for sharing that. And uh, Paul, just for your information. That's one of the benefits of the hybrid long-term care products we're talking about today, is that we have guaranteed premiums with traditional long-term care,

Guaranteed Premiums: Hybrid vs. Traditional LTCi

SPEAKER_01 47:19

yeah, you know, it designed to remain level, but certainly not guaranteed to remain level.

SPEAKER_03 47:25

So eve, oh, so the ones that you're talking about today, which are the hybrid sort of chat seat on a life insurance policy, they will pay the benefit that was promised at the inception of the plan. Or no.

SPEAKER_01 47:39

I'm sorry, what was that? I I was reading the chat. Sorry.

SPEAKER_03 47:44

That's okay. I knew I knew your mind was also now. The um so plans that are purchased today under the the chassis that you're talking about, the hybrid chassis, say the one America life insurance slash long-term care, they will pay what they're saying they're gonna pay, or even they are suspect to review and change 20 years in the future.

SPEAKER_01 48:07

Well, the premiums are are guaranteed in many cases with these plans.

SPEAKER_03 48:12

The benefits, the benefits, yeah.

SPEAKER_01 48:14

That's so yeah, a rate increase is generally implying for the same benefits you will have to pay more, or you'll have to reduce benefits to retain the premium that you were paying before the increase, right? Sure. But the hybrid plans, the premiums are either um, you know, completely guaranteed throughout the life of the contract or are paid up in one shot, thereby meaning you can't increase the premium when I've fully paid it up, or it's paid in a window of 10 years. Um, generally, we see these premiums as fully guaranteed. So the premium you pay year one is the same as the premium you pay when you fully pay it up.

SPEAKER_03 49:00

And in 20 years, when the person knocks on the door and says, I have a claim to make, that amount that Gail told them 20 years ago will hold true.

SPEAKER_01 49:09

Yes, yes, even in uh even in a case of um rate increases, the carrier still has to keep their promise. That is part of how you even get a rate increase right uh approved at the end of the day, is to, you know, you're going to stay in business, you're servicing your policyholders, you're keeping your promises. I uh in in very few cases has a carrier, you know, completely found themselves insolvent. And there's even protections beyond that, um, where each state has a guarantee fund that guarantees people a certain pool of long-term care benefits if the company were completely insolvent. So there are a lot of protections in place. And um, again, these the traditional long-term care products um by those who know what they are doing are not sold as guaranteed premiums at the end of the day. Um, but there are lots of protections in place, and these rate increases don't get approved if uh, you know, a carrier just because a carrier wakes up one day and says, I gotta make more money on this.

SPEAKER_03 50:26

But in other words, in the old days, it was kind of like car insurance. You you paid so much and you thought that was gonna be it, but then they said no, we're having an increase.

SPEAKER_01 50:34

Yeah, and we'll we'll do a session on rate increases here coming up uh soon. I generally try to do one a year, and um okay, you know, usually there is um you know some good information that comes out of it, but there are many who get rate increases, it's because they've had an excellent value in their plan for a very long time and have you know owned an underpriced plan for a

Closing Thoughts & Wrap-Up

SPEAKER_01 51:04

very long time. The older the plan is, it essentially looks more and more like a gold mine tax. But generally, what you would pay after an increase is generally less than what it would cost to be new business on the market today by a long shot. So hope that helps. Um, but yeah, appreciate everybody being here today. Thank you for the discussion, your questions, your comments. Uh, we'll do uh study hall sessions periodically on each of the product types throughout the year. We just thought we'd get it started with hybrid long term care today. And uh we look forward to seeing you next week. Same time, same place. See y'all.