I was talking to our team of LTCtree agents today on a conference call and several of our agents are reporting to speaking to folks around the country who are telling them New York Life career long term care insurance agents pushing inappropriate LTC coverage to their clients.  NY Life is a great company with impeccable financial ratings, but somehow there is a trend with some of their agents selling a CPI inflation protection to people even in their 30′s!  This type of inflation protection is ONLY appropriate for people 70 years +.

Basically how the NY Life CPI inflation works is every year the company will give you the option to buy more insurance based on the CPI basket of goods set by US economists.  If you are in your 70′s and 80′s and decide to buy CPI inflation probably wont be a huge problem, but if you are 35-69 yrs old and buy CPI inflation it will be a problem because your rates go up and your benefits will not increase quickly enough.  With the CPI option some NY Life agents are selling, your premium might start off at $50 bucks a month but will over triple when you need it in the future.  Another problem is the average CPI is about 3% per year and by buying that inflation option you are forfeiting the LTC industry standard of 5% Compound annual increase.  With this type of inflation you pay a bit more up front, but will end up paying less in the long run and most importantly have 40% more benefits when you need it by having your benefits increasing 5% with compound versus the 3% with the CPI.  Medical costs increase much faster than items used to gauge the CPI index such as a gallon of milk.

After discussing the rational reasoning through the facts our conversation turned to why are these NY Life agents doing this?  The reason is NY Life’s LTC product is typically more expensive than the other major carriers by a big margin.  NY Life does offer the 5% Compound rider but when compared to say MetLife, John Hancock, and Genworth they are not competitive in almost all cases.  Thus, if you are working with a career NY Life agent that can just sell NY Life it looks like several agents around the country will sacrifice the clients best interest for their own pockets.  Look out and shop around.  At LTCtree we are independent brokers and work solely for our clients not 1 company.  We will literally run your rates with the top 10 carriers and show you all the rates for all the companies and let you judge for yourself what company you want. Simply fill in this form and we’ll mail you out the rates.