Another Good Set of Long Term Care Insurance Questions From A Client And The Answers

Client:

1. What were your reasons for choosing Allianz life as a secondary choice? John Hancock seems to be second in pricing, and looks to have a little bit better rating as a company. How much difference is there in the coverage they offer?
2. What is Genworth's history on premium increases? Under what conditions do they raise them, and how often do they do so?
3. What is the pay-out method? Expense-incurred, indemnity, etc?
4. What is your opinion on and would there be any advantage to shared benefit coverage?
5. What kind of price difference does a restoration of benefits option incur?
6. Price of and opinion on monthly maximum option as opposed to daily?
7. Also on return of premium option? Both my husband's parents died in their late fifties/early sixties without needing long term care, so I know this is something that could realistically happen.
8. What is the method on filing a claim? Prior approval, Dr. notification, company assessment, etc.

LTCtree:

1. Yes, John Hancock does have better ratings and if you go with the 3yr plan they have the better rates as well and that would be my recommendation.  One the 5 year plan Allianz slightly edges them by a bit, but John Hancock does have the better financial strength ratings.
2. Genworth and John Hancock both have raised rates once each in about 30 years of writing policies in 2007.  It was not across the board and effected about 20% of policy holder if I recall.  Genworth increase was 9-12% and John Hancock was 13%.  Allianz has never raised rates on existing policy holders.
3. Pay out on all carriers is expense-incurred method, but some have a cash payment option but will increase the cost by a good bit.
4. I'd probably say save your money if you're trying to keep the premiums down.  It's nice to have it, but will add about 15-20% to the cost and 92% of all claims paid over the past 20 years have been for 3yrs or less.  (Odds are you'd never use that rider)  However, it might be worth the peace of mind to some.
5. It will add about 5% to the cost, but not too many people who have it ever use it.
6. Adds about 5% as well and it will give more flexibility on home care so on days where you need say 15 hours as opposed to the normal 10 you can go over you speed limit so to speak.  John Hancock has monthly home care built in.
7. Genworth has the most cost effective return of premium and will add 15% or so.  The policy must be in force for at least 10 years to kick in.  John Hancock will return premiums up to age of 65 with no extra cost.
8. All the carriers I sent are very similar.  You Doctor needs to certify that you need help with at least 2 of 6 ADL's or have a cognitive impairment.  The company will have to approve the claim obviously, but they are not going to send their own Doctors out unless they suspect fraud.  I've been in the business for 12 years and have not had any problems with these blue-chip carriers when claim time has come.

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