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Dear Everyone!
I apologize to everyone for missing the past issue of The Tattler but there was a good reason. My mother had a heart attack and I went down to Palm Beach, Florida for a couple of weeks to take care of her while in the hospital as well as at home.
I'm happy to report that she is doing quite well, getting stronger each day, and in a month or so will be back to her old self... working with her charities and chasing down bargains at Costco.
I got an up-close and personal look at how people with insurance are treated vs. those without. My mother has Medicare as well as a good Medicare Supplement. She got great care. Why? because the hospital knew they were going to be paid... and paid a lot more than just what Medicare (or Medicaid) would pay.
Hospitals (even non-profits) are businesses, and in business money talks! Don't go to the hospital without an insurance card. If you do, don't say I didn't warn you.
First up is an interesting item that I learned about this week. Next I talk a bit about LTC, and a quick note on annuities.
Finally, I send a warm greeting to the people I met at the Folsom Chamber event I attended early last month as well as the Fair Oaks Springfest.
It's good to be back.
-Al
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Are Your Breasts Real?
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Ladies, lets talk a bit about your breasts. (You sure as hell didn't expect THAT as an opening line in an insurance newsletter.) Are they real?
OK, relax, I'm not trying to insult, shock, or embarrass any of you. You're right it is none of my business... but it is the business of Anthem Blue Cross (New name of Blue Cross of California.)
They want to know if you have fake ones. Why? Because they rate-up all women (and I guess men?) by 25% if they learn that implants are aboard.
Why do they do this? I have no idea, but I assume they feel there is some latent medical risk with these things.
The interesting thing is that they don't ASK on the application: "Do you have breast implants?" However, if by some chance they find out, you are going to be rated up.
I had a client this week who applied for Anthem. She has eleven year old implants. Since there is no direct question about implants, and the medical history only goes back 10 years, she didn't mention the procedure.
But Anthem requested medical records on her for something else, and mention of her "new" breasts showed in the doctor's notes. She was approved but her plan costs her 25% more.
So what we have is a situation where some women with implants have Anthem plans that cost them 25% LESS than other woman... who were unlucky to have had their medical records examined during the application process. That's a good deal for the lucky ones.
But how do the unlucky women feel? Guess, what, they are not happy... and there is talk of asking the CA Department of Insurance to require Anthem to send a letter to ALL women members asking them about their breasts and if the client answers positive about implants, they will be forced to rate them up 25%... so as to treat all clients the same.
I don't know how this letter will read, but I remember the Seinfeld episode about them... Jerry's girlfriend says "They're real... and they are spectacular."
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| Let's Talk Some LTC |
I don't talk much about long-term care (LTC) insurance. No one wants to, least of all those who really should be talking about it! If you think it is hard to get people to talk about death, try getting them to think about life in a nursing home!
I've done some work in the LTC world. It's a strange sector of the industry. It has been around forever, but it has never really "taken off." Every year the pundits say "This is the year of LTC," but it never seems to happen.
In the past there have been some really horrible plans out there with a lot of bad publicity about them... from well-known companies. Maybe you saw the New York Times piece on Bankers Life last year?
Another reason sales of LTC are not high is because there are not many agents who mess with it. It's said that you have to be an expert in this area and just devote your business to it... but I don't know many who do... or who can afford to just sell LTC.
The problem is that there are a lot of moving parts to an LTC plan, not the least of which is how will the company raise rates to cover inflation. If you are 60 today and don't anticipate the need for LTC for 15 years, what is your best guess of what it will cost? And just how long a plan do you want? 3 years? 5? life? So many decisions for the applicant to make... all of them important... and very little training available to agents to help clients make those decisions.
I'm fortunate in that with Mutual of Omaha (whom I'm affiliaed with) there is a ton of info and formal training for the agent to draw upon to learn the product.
That said, I'm on the fence with LTC as I think that for a lot of people a plain old life policy with an accelerated benefit rider might be just as good as a stand-alone LTC plan. Well, at least almost as good... and a hell of a lot easier to understand. Read this: "If you have a $250,000 life policy and you become disabled or require LTC, you can pull out 92% of the the death benefit." Does that make sense to you? Of course it does. That's a no-brainer for the agent to explain and for the client to understand.
Another advantage (besides taxes) of life insurance as a 'means' for LTC, if you have a policy with (or without) some cash value, you can cash it in... or better yet, you might be able to sell it on the secondary market. Try doing that with a LTC policy!
One reason agents shy away from LTC is because the application is a nightmare... and that UW is even worse... it's a long, slow process... that most often ends in denial. Agents have to eat too!
As for plans, of which there are many good ones, I'll sell Mutual of Omaha. Why? Simple. You want to make sure that the company will be there when the policy is needed. I'm not so sure with Genworth or John Hancock (now owned by a Canadian company.) I think MoO has a good plan (there is no "best"... and people trust the name... and for good reason... the company has integrity, it has solid financials, and it will be there when needed.
There is no doubt that a good LTC policy will do the best job for what it is designed for... but a good life policy might be good enough... and sometimes "good enough" is good enough. I'm sure I'll get a lot of flack from agents who specialize in LTC, but that's my LTC story and I'm sticking to it... at least for the time being!
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| It's New... But It's Old! |
The magic of annuities is all in the riders. In fact, guaranteed living benefit (GLB) riders have been the driving force behind the record-setting variable annuity (VA) sales in 2007.
I don't sell variable anything because I don't like to subject clients to substantial market risk. However guarantee benefit riders are now seen in fixed (indexed) annuities as well.
The latest rider that is currently stirring up sales is the Guaranteed Lifetime Income Rider (GLIR) which guarantees that the annuity owner will receive an annual payment (a guaranteed withdrawal payment) for life - even if there is a drop in the policy's accumulation value.
I don't know why this is such a big deal... because after all, the concept of an annuity is to pay an amount you can't outlive. However, in recent years this has been lost to the feature of using an annuity as an "investment" alternative to CDs.
We're coming full-circle to the idea of what an annuity was designed for. They have just put a different spin on it... to jazz it up a bit.
Proof that the GLIR is red hot and getting hotter is the number of applications companies are receiving regarding the rider for single premium deferred indexed annuities.
The guaranteed withdrawal percentage is based on the age at which the client expects to start to receive payments. For example, if the guaranteed withdrawal percentage on a single life is 5% at age 60 and increases by 0.10% each year, the Guaranteed Withdrawal Percentage at age 90 is 8%.
A married couple could purchase a single premium deferred indexed annuity with a Joint Life GLIR for $406,679 at age 55.
At age 65 they would be entitled to an income of $40,000 annually guaranteed for life even if the contract's accumulation value eventually becomes zero because of the payments. If they decide to receive payout starting at age 70, their annual guaranteed lifetime income would be $61,712.
By offering these riders, insurance companies offer peace of mind to retirees and pre-retirees through the guarantee that they will not outlive their income.
In other words, what is old... is new again... with just a different spin.
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Well, that's a wrap for this issue. I hope you've found some of the info above useful and interesting. If you have questions about life or health coverage, safe-money annuities, or employer group benefits just give me a call or send email.
Sincerely,
Alan N Canton
InsuranceSolutions123 Agency
InsuranceSolutions123.com
916-962-9296
CA License # 0F31110
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Al Canton, Owner
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I'm Al Canton, owner of the Insurance Solutions Agency.
Everyone promises the best service, etc. So I won't bore you with that message.
Bottom line, I know health insurance, work-supplements, medicare, life, and annuities.
Most importantly, I'm honest. I will not put you in a product just for the money. I've been here 25 years and I've built my business reputation on integrity and honor.
It's that simple.
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