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Dec 31, 2008 1:42 am

The big mutuals (NMFN, NYL, MM) did something very right when it came to long term care insurance.  They didn’t sell it until the end of the 1990’s/early 2000’s.  They looked at the pricing and realized that it could not be sold profitably.  The companies who started in the LTCi business before that point are all either out of the business or have raised rates on existing clients or will be raising rates on existing clients. 

  The claim, "not raised rates on new or exisiting  business" doesn't have that much meaning because the other big mutuals When they did get into the business, they thought that it could be done profitably.  However, it's starting to look like this may not be a business that can be done profitably.  Time will tell.    You certainly won't have to apologize for selling Northwestern Long Term Care.  They are much less likely than some other carriers to raise rates.   However, just as an example, if Northwestern offers someone standard rates and a comparable company like MassMutual offers ultra preferred rates, its tough to see how that client would be best served with Northwestern.   I think that Northwestern is smart with their pricing.  They intentionally have it overpriced.  They plan on paying dividends.  If it turns out that they are not overpriced, they don't have to raise rates because lowering the dividend serves the same purpose.   (silverstang, from a sales perspective, you don't want to talk to your clients about the dividend.  You don't want them unhappy if one doesn't get paid.)   "not raised rates on new or exisiting  business."   None of the big mutuals selling LTCi have raised rates on existing business.  "Not raising rates on new business" doesn't have any meaning.  The reason is that when a company wants to raise rates on new business, they make changes in the policy.  This new policy is not the same product.  It gets introduced with a new pricing structure.  Since the policy is different, it's not a price increase because it's not the same thing.  Often, when this happens, the policy gets cheaper and more expensive at the same time depending on the particulars.    
Dec 31, 2008 3:05 am

i’m glad you spelled it out for him.  i did not want to take the time.  

Dec 31, 2008 3:36 pm

ok- thanks again for the additional info.    what you are saying makes sense.