Lincoln Moneyguard

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Oct 12, 2009 10:06 pm

Anyone have any experience with Lincoln's Moneyguard for LTC?  I have heard mixed things and was interested in some feedback? 

Oct 12, 2009 10:07 pm

feedback. (typo)

Oct 12, 2009 11:25 pm

I've used it, I like it for a client that has money they'll never use. The approval process is simple. Plus it pays a nice commission.  I've heard Genworth has a similar product that might allow for some cash value growth but not sure.

Oct 12, 2009 11:30 pm

It's a good product for the individual who isn't sold on a tradition LTC policy.  The biggest problem that some people have with traditional LTC is that they pay big premiums and if they never use the policy, the money "goes to waste".  Not what I believe because this isn't something you want to use but we're talking about clients. 




 
This is where MoneyGuard comes in.  This is made for individuals who want to self insure and have set aside money specifically for long term care.  It's technically a Universal Life policy with a LTC benefit.  So for example, you have a client who does not want traditional LTC and wants to self insure and has set aside 100K for long term care (which in certain areas is not much).  They can take that 100K and put it into Moneyguard and they will be leveraged close to 5x the amount, roughly 450K of LTC benefits.  There is a monthly maximum and that can be tailored.  Once they put in the 100K, they actually have 3 numbers they can use and I'm making up some numbers: 1) LTC benefit of $450K 2) Life insurance DB of $185K or 3) cancel policy anytime and get refund of full premium.  Yup, they can cancel at any time and if they didn't use any benefit, they get their complete premium back.  So if they never use it and they die, it pays out as a death benefit.  If they never use it, they can get all their principal back.  Again, I prefer traditional LTC policies but for that individual who wants to "self insure", this is a no brainer.  "You want to self insure? That's great, how about we help you with that by leveraging your money up to 5X the amount and can get your principal back at any time?"
Oct 13, 2009 5:51 am

army, if they have the resources to pay for care, please explain how the MoneyGuard policy is in the client's best interest when compared to other life insurance policies with higher death benefits.

Oct 13, 2009 9:44 am

It depends on what you want to leverage.  Moneyguard is about leveraging the LTC benefit whereas LI is about leveraging the DB.  There are LI policies that allow access to the DB as LTC benefits, but the leverage usually isn't as good. 

Oct 13, 2009 9:57 am
anonymous:

army, if they have the resources to pay for care, please explain how the MoneyGuard policy is in the client's best interest when compared to other life insurance policies with higher death benefits.



The client can get 100% of their money back, anytime, no questions asked, no surrender. I think it's a very flexible product with limited underwriting for someone that is not 100% on LTC or LI.  Do you have LI like that? If so, what because I want to sell it. (seriously)

Oct 13, 2009 10:34 am

It makes tremendous sense for younger people with some free cash, but not enough to throw away on LTC premiums for an extended period of time.  Yes, there is opportunity cost of not investing the money, but think of it this way:  with 100K of free cash, you will do one of a few things: spend it, invest it and possibly make some good money, invest it and make a small amount of money (i.e. MMKT, muni's, etc.), invest it and lose a lot of money.  Ultimately, it's about what you will USE the money for.  If it will ultimately be used for care or to pass on to the next generation, wouldn't Moneyguard be the most appropriate solution?

 
It also has great value for older people because the underwriting guidelines are not quite as strict as straight LTC.
Oct 13, 2009 11:14 am

Mutual of Omaha has a somewhat similiar product.  In a nutshell, It's basically a traditional fixed annuity that also has a LTC benefit that is 3x the cash value. 

Oct 13, 2009 5:21 pm

Thanks for the feedback.  I haven't had time to track it down but another broker told me that if the client taps that money within the first year, your commission is forfeited.  I haven't found it in the lincoln documents but then again I haven't had a lot of free time on my hands lately. 

Oct 13, 2009 5:55 pm
voltmoie:
anonymous:

army, if they have the resources to pay for care, please explain how the MoneyGuard policy is in the client's best interest when compared to other life insurance policies with higher death benefits.



The client can get 100% of their money back, anytime, no questions asked, no surrender. I think it's a very flexible product with limited underwriting for someone that is not 100% on LTC or LI.  Do you have LI like that? If so, what because I want to sell it. (seriously)



 
For the record, I wasn't trying to talk negatively about the product.  It was meant simply as a question.
 
It's been a while since I've looked at, but from what I recall, it wasn't very good as an LTCi product, nor was it good from a death benefit standpoint.  Getting 100% of one's money back is a good thing, but, of course, that means that they probably should never have put their money in the product in the first place. 
 
Are there other advantages to the product?
Oct 13, 2009 9:25 pm
anonymous:
voltmoie:
anonymous:

army, if they have the resources to pay for care, please explain how the MoneyGuard policy is in the client's best interest when compared to other life insurance policies with higher death benefits.



The client can get 100% of their money back, anytime, no questions asked, no surrender. I think it's a very flexible product with limited underwriting for someone that is not 100% on LTC or LI.  Do you have LI like that? If so, what because I want to sell it. (seriously)



 
For the record, I wasn't trying to talk negatively about the product.  It was meant simply as a question.
 
It's been a while since I've looked at, but from what I recall, it wasn't very good as an LTCi product, nor was it good from a death benefit standpoint.  Getting 100% of one's money back is a good thing, but, of course, that means that they probably should never have put their money in the product in the first place. 
 
Are there other advantages to the product?



This product is not meant to be a death benefit product and the LTCi benefit is actually pretty good.  I sold one that had a similar benefit base when I sell a traditional LTC: 3 year benefit, 6K/month in benefits, 5% compound.

So the original question from anon was if they have resources to pay for the care, why do it? Well, if the estimated cost of care is $450k, they can either have $450 in a cash account or they can have $100K in a Moneyguard policy.  With that type of leverage, why would you anyone want to fork out the additional 350K in cash is beyond me especially when they can get all their money back. 

Lastly, I prefer the traditional LTC policies.  But when you come across an individual who is concerned about LTC, is worried about not getting his money back in premiums and wants to self insure, Moneyguard is a good way to solve that problem. 

Oct 14, 2009 5:52 am

Army, if I recall correctly, the 5% compounded benefit is very limited.  I can't recall how it works, but it's either lower than 5% or the 5% is only for a limited number of years.  What I can remember is that if someone needed care 20 years into the future, if they bought a big enough benefit today, it would be a much too small benefit in the future if health care inflation averaged 5%.

 
When you frame the question to be a choice between Moneyguard or money in the bank, it's easy to see why one should use the Moneyguard policy.  However, if we are talking about someone with money in the bank, shouldn't we be framing the choice to be money in the bank vs. all other alternatives?  When is Moneyguard the best alternative?
 
For instance, what would happen if the person put the $100K into a SPIA and then used that money to buy a GUL policy?  Under most circumstances, won't this ultimately end up to be better for the client and their family?  How about if we put some real numbers to this and look at the results?  This does solve the problem of someone thinking that they may not get their money back in premiums and wants to self insure.
 
By the way, people can't self insure.  They can choose to not buy insurance, but they can't self insure. 
Oct 14, 2009 9:47 am

When you are talking to the client that will never buy a traditional life insurance product.  When you are talking to a client that hates the idea of paying for LTCi they might never use. When that client, might at some point in the next 20 years want to get 100% of their premium back - not that they will do that they just like the idea of the money being there.


It might not fit your definition of the best product but for a cut of the population it does. Again, if any of the products you are talking about have the flexability of 100% cash refund on premium, I'm listening.  That's the selling point.  It get's people to act that normally would not do so. You want to debate the merits of the product - money guard provides decent enough leverage while answering an emotional gap found in most insurance products.  WHAT IF I NEED THE MONEY...
 
I'm a total insurance rookie but it's easy to understand, explain, and get approved for.  I like it and the clients I've presented it to like it and can understand it.  That goes a long way in my opinion.
Oct 14, 2009 10:48 am

Real numbers - $100K SPIA life only for a 70 year old male - Genworth will kick out $6658 a year with a life only setup.  Hartford GUL using that as the annual premium would be $193K DB.  If I ran it with the Life Access benefit which allows for LTC withdrawals the DB would go down to $174K.  Moneyguard would give a $356K LTC benefit and a $118K DB. 


The client has to make a decision about what is most important to them. 


Moneyguard gives a bigger LTC bene with a money back guarantee.  In this case not quite double what the LI policy could provide. 
 
However, if they want to maximize the money they pass on to their kids, but don't care about the LTC, then obviously the LI is the way to go. 
 
My assumption about this thread was that it was a LTC discussion.  Moneyguard is a LTC product.  If we're talking about LTC insurance it's a great product.  If we're talking about LI, it sucks. 
Oct 14, 2009 8:05 pm

Spaceman, thanks for an intelligent conversation on this subject.   It's been a long time since I've looked at Moneyguard.  I appreciate seeing that it may be appropriate in some situations. 

Oct 14, 2009 10:01 pm
anonymous:

Army, if I recall correctly, the 5% compounded benefit is very limited.  I can't recall how it works, but it's either lower than 5% or the 5% is only for a limited number of years.  What I can remember is that if someone needed care 20 years into the future, if they bought a big enough benefit today, it would be a much too small benefit in the future if health care inflation averaged 5%.

 
When you frame the question to be a choice between Moneyguard or money in the bank, it's easy to see why one should use the Moneyguard policy.  However, if we are talking about someone with money in the bank, shouldn't we be framing the choice to be money in the bank vs. all other alternatives?  When is Moneyguard the best alternative?
 
For instance, what would happen if the person put the $100K into a SPIA and then used that money to buy a GUL policy?  Under most circumstances, won't this ultimately end up to be better for the client and their family?  How about if we put some real numbers to this and look at the results?  This does solve the problem of someone thinking that they may not get their money back in premiums and wants to self insure.
 
By the way, people can't self insure.  They can choose to not buy insurance, but they can't self insure. 
 
Anon, I don't know when the last time you looked at a Moneyguard hypo but from what I remember (it's been a couple of months since I ran it myself) is that it is a true 5% compound inflation like Genworth, Hanc***, etc. 
 
You're talking about life insurance needs and what to pass on to heirs where I was talking about long term care benefits.  From your example in buying a SPIA and buying a GUL policy, how does this take care of the long term care need if they needed $6K/month in a facility or home healthcare? I totally agree that this isn't the optimal use for a death benefit but for a client who wants an option for LTC and can get 100% principal back at any time, it's a pretty easy to sell. 
 
I know people can't "self insure"; when I wrote it before, I forgot the " around it.  But there are people out there that advocate for it, which is pretty stupid.
Oct 15, 2009 9:55 am
AGEMAN:
anonymous:

army, if they have the resources to pay for care, please explain how the MoneyGuard policy is in the client's best interest when compared to other life insurance policies with higher death benefits.

 

I have used it a few times for 1035 exchanges of old whole life policies and was able to have the client stop paying any premium, gave them a higher or same death benefit, and they now have some LTC coverage.  It's great for that.  By the way a year or so ago I had someone turned down for the Moneyguard but the GNW product accepted them.
 
That's a great idea.  I usually look for clients with a bunch of cash or CDs sitting in a bank somewhere.  I'll have to revisit with some that might have old insurance. 
Oct 15, 2009 1:09 pm

If you 1035 a life policy with a gain into Moneyguard and they use the LTC benefits of the policy, will the benefits in excess of the cost-basis on the life be taxable?

Oct 16, 2009 10:30 am

Voltmoie,


There are lots of insurance carriers out there that would give you leverage on your death benefit (if you have a huge amount of cash). For example, put in $100k one time premium, death benefit is immediately $200k. You can take back your premium ANYTIME, guaranteed, after year one. I know a lot of the mutual carriers offer it, as a broker you might want to call up your life insurance wholesalers that your firm approves.