Anyone know the down side of this product. I've been told the benefit. LTC with a Death Benefit. I'm thinking the internal expenses.
Is it better to buy a separate LTC policy and Insurace contract.
From what I've seen, MoneyGuard is a doggone good product, although I don't specialize in that area. An insurance specialist at Capitas showed me MoneyGuard vs. another similar product (I think it was John Hancock) and from what I remember, JH(?) had a little stronger LTC benefit, but if you took your principal out early, there was a surrender charge. MoneyGuard, per my recollection has no such surrender penalty, so it appears that there are tradeoffs with each product. Perhaps a life/LTC specialist knows how the expenses compare, but I can tell you that from my limited experience, clients liked what they saw, vs. buying a traditional LTC policy and potentially never using it (and having nothing to show for the premiums). Logic tells you that such a policy would be more expensive, but I've seen several folks very willing to pay the price to know that EVENTUALLY, SOMEONE would get a financial benefit from the policy.
The EARNINGS within MoneyGuard are subject to a 14 year surrender period. The PRINCIPLE can be withdrawn at any time.
I really like the product, as opposed to using regular LTC. With regular LTC, you use it or you lose it. At least with moneyguard someone is gonna collect on it.
Be careful with the taxes. This is a MEC so the portion of the
interest that is earned is taxable as income, and the client does not
get any of it. Since the product is designed to take large, one
time deposits of $75,000 or more, this taxable interest can add
up...and give policy holders an unpleasant surprise come tax time.
THis is a linked product that we will see much more of in the next few years.
5% to 9%, depending on where you are and if Lincoln is paying for a separate marketing arm to wholesale it.
I have looked at this product a few times and each time my client was better off with separate life and LTC policies. From what I see, this product is only appropriate in very few instances.
There are several things that I like about this product. For starters, everything is contractually guaranteed from the start. No potential for increased premiums later on. Second, if a better plan of insurance comes along, surrender the contract and put your money to work in the new product. Third, simple and fast underwriting. And finally, a minimally leveraged death benefit. If you don't ever use the money, someone will get more than the return of premiums.
Rightway is wrong. It's not designed for $75K or above. If you put 75K into this product, you're not smart and your broker is an idiot and a thief. It is ideal for relatively healthy individuals in their early 50s to early 60s. It works especially well with divorced or widowed women who would not receive any of the "married" discounts affored in the traditional LTC market. A 35K ticket for a preferred 54-year-old female is plenty of coverage for a lifetime in my opinion. Commission is generally 7.5% of the total front-loaded premium.
Be careful in structuring any joint survivorships with this contract. It may sometimes work if there is a large spread in age between the married couple. Otherwise, you are better off with two single life policies.
Fair enough. I have used the product a few times, and when I did
I used it for people in their late 60's/early 70's- single person
contracts. I found that this sized premium combined with social
security fully paid for all of the LTC benefits they would need and we
used cash they otherwise were not using for income. I was trained
on the first generation of this product that did not have an inflation
feature, which now it does. Typical client profile was Mid-late
60's, $500K to 2 Mill in investments/cash, with a couple hundred in
cash and CD's. I am not a product specialist, though, so I look
forward to any constructive comments.
THe commission at the bank was 9%. At ML it is 4.5%.
I was trained on the first generation of this product that did not have an inflation feature, which now it does. Typical client profile was Mid-late 60's, $500K to 2 Mill in investments/cash, with a couple hundred in cash and CD's
Me too. I wasn't aware that they had added an inflation feature. Need to take another look at it.
I haven't done much long term care in a few years. Does anyone still do the strategy of immediate annuity, ltc and second to die to replace the annuity? Or is this not feasible with the current low rates for a SPIA?
SPIA rates still suck pretty hard. If you calculate the true IRR, most are less than 3%. I like doing the LTC with MetLife's Income Solution Rider on their VA.
SPIA rates still suck pretty hard. If you
calculate the true IRR, most are less than 3%. I like doing the
LTC with MetLife's Income Solution Rider on their VA.
LTC with an income rider? Where is the leverage? How do you structure this? Thanks in advance.
Sorry about the confusion. I was not very clear in what I was trying to say. LTC policy premiums paid by VA with Income Solution Rider. Guaranteed 5% until age 81, decent annuitization schedule at the end. Basically, period certain until the client would have been 90 if they pass away between 81 and 90. Otherwise, they receive payments for life after 81.