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 Post subject: John Hancock Lifecare
PostPosted: Wed Apr 21, 2010 7:50 am 
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Joined: Wed Apr 21, 2010 7:42 am
Posts: 8
Just curious to hear everyones thoughts on the newer program from John Hancock being offered called life care. Its their hybrid product where you pay a one time premium, here is the example they give as to how it works:

70 year old male nonsmoker
100,000 single premium
Face amount $131,722
Total LTC Benefit $263,444 LTC benefit period is 4 years
Max Monthly $5488
Minimum face amount is 50,000

Although I'm pretty much onboard with some type of policy through them, I'm just having a hard time with the idea of possibly never using the care and paying heavy premiums year/year. I like the fact that something is going to be paid out in the end regardless if LTC is needed or not. We have gotten a stard LTC policy quote from them that reads:

3 year term
90 day elimination
4500 monthly
5% compound
162K limit

$4169/year static premium

Gotten some quotes from genworth,aarp,metlife,nml and although aarp is a bit less, genworth also maybe by a few hundred 2-3, I'm most comfortable @ the current time with what John Hancocks offerings/reputation is.


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 Post subject: Re: John Hancock Lifecare
PostPosted: Wed Apr 21, 2010 12:12 pm 
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Joined: Sat Nov 03, 2007 8:15 pm
Posts: 179
Location: Atlanta,GA
well......do you need an overpriced life insurance policy as well? DO you have a better use for the $100,000? You can earn $3-4K per year from it if you are only a half way decent investor. Annuities are an option of course.

Else, you are really not even comparing apples to apples on a LTC basis. The LifePlan has no inflation clause......so it is not going to grow for you in the future. You should compare it to a $5400 4 year GPO/none plan if you want to be fair. The 4500 5% compound plan will far outpace the 5400 plan if you manage to live for 10+ years before you need it. At age 70, it is likely that MetLife on a Value plan will make you a better offer for LTC coverage. With their new pricing structure, they are worth a look for the 70+ crowd with GPO.

If you check off the Return of Premium box with some carriers, you will still be able to get a good plan in the $5-6K per month with basically nothing to lose if you never use the plan and you have not tied up the money.

If you want to shop for linked benefit plans, then you should get the TLC plan from Genworth or the Money Guard plan from Lincoln to compare. Depends on your health and whether there is a spouse in the house as to who will offer the best value. If you are hung up on financial ratings, Hancock is not a bad choice.

Suggest you talk to someone experienced with all these options....but in general JH is not the best price point for LTC for someone in their 70's, and you can certainly argue whether you should spend the exta money on 5% compound at that age. I do not know enough about your situation to make any recommendations....so I am only throwing talking points out. Hope they help.


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 Post subject: Re: John Hancock Lifecare
PostPosted: Wed Apr 21, 2010 1:22 pm 
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Joined: Fri Dec 04, 2009 9:53 am
Posts: 91
Duhaas,

In deciding if Life/LTC combo or LTC stand alone is better, the first step is to compare apples to apples.

The Life/LTC combo product does not have any inflation benefit. If you drop the inflation benefit on the traditional LTCi policy, the premium would be about $1,500 less.

The problem with the Life/LTC combo products is that the single premium deposit is STILL AT RISK!

If your client needs care, the single premium deposit is used first. If enough care is needed, the death benefit will be reduced to little or nothing.

If you want to guarantee that your heirs receive your entire LTC insurance premium back, you should buy a long term care insurance policy that has a "Full Refund of Premium" rider. The full amount of your premium will be refunded to your heirs, regardless of how large a claim you made on your policy. (whereas with the Life/LTC product there is no guarantee of ever getting the deposit back.)

There are leading LTC insurers that have financial ratings as high (or higher) than John Hancock that offer products with a full refund of premium.

The other downside to the Life/LTC combination products is that they can't qualify for special asset protection under the Long Term Care Partnership programs that have been instituted in 34 states.

Scott A. Olson
Redlands, CA


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 Post subject: Re: John Hancock Lifecare
PostPosted: Wed Apr 21, 2010 8:59 pm 
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Joined: Wed Apr 21, 2010 7:42 am
Posts: 8
Appreciate the advice. I'm going to continue to check out various other options. I appreciate your willingness to offer up the advice and have found the advice valuable.


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 Post subject: Re: John Hancock Lifecare
PostPosted: Sun May 23, 2010 12:49 pm 
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Joined: Tue May 15, 2007 9:26 am
Posts: 19
Location: Alpharetta, GA
duhaas wrote:
Just curious to hear everyones thoughts on the newer program from John Hancock being offered called life care. Its their hybrid product where you pay a one time premium, here is the example they give as to how it works:

70 year old male nonsmoker
100,000 single premium
Face amount $131,722
Total LTC Benefit $263,444 LTC benefit period is 4 years
Max Monthly $5488
Minimum face amount is 50,000

Although I'm pretty much onboard with some type of policy through them, I'm just having a hard time with the idea of possibly never using the care and paying heavy premiums year/year. I like the fact that something is going to be paid out in the end regardless if LTC is needed or not. We have gotten a stard LTC policy quote from them that reads:

3 year term
90 day elimination
4500 monthly
5% compound
162K limit

$4169/year static premium

Gotten some quotes from genworth,aarp,metlife,nml and although aarp is a bit less, genworth also maybe by a few hundred 2-3, I'm most comfortable @ the current time with what John Hancocks offerings/reputation is.



The difficulty I have with the life insurance/long term care linked benefit approach (LifeCare) is that the premium leverage is significantly diluted. A 70 year old male can buy a paid up death benefit of $260000 for a single premium of $100000. Thus, to only receive a guarantee of $131,000 is not receiving full leverage of the deposited premium. You could alternatively deposit only $50000 into a life insurance policy to guarantee the same paid up death benefit of $131000. And you can use the remaining $50000 to easily fund a very good long term care policy with inflation protection. With this approach, you can have your cake, and eat it too.


The primary selling point of linked benefit combos is if you change your mind you can receive your full premium deposit back. What the policyholder needs to understand is the insurance comapny has significantly underleveraged the product for this privilege.

The policyholder will always receive the best value if it can determine what the primary objective is of the benefits. If life insurance is the goal, then maximize the premium outlay by minimizing the mortality cost. If protecting the assets from a long term care need is the goal, then maximize the LTC benefits by minimizing the morbidity costs.

To combine mortality costs and morbidity costs in the same platform has a price.

John Hancock already knows that it would guarantee you a death benefit close to $260,000 for your $100,000 premium deposit; John Hancock knows you will die. By opting for the linked approach, John Hancock will only possibly be responsible for the $260,000 IF you need LTC. Why give the insurance company an opportunity to dilute its exposure at the expense of your premium?

The linked life/LTC combo products sell to consumers who do not have an idea as to the true life insurance value of their initial premium deposit. Because the hot button of this purchaser is to not "pay a premium and never need it," it is attracted to the "concept" of linked plans. However, in trying to avoid "throwing away premiums," the policyholder in turn "throws away benefits."


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 Post subject: Re: John Hancock Lifecare
PostPosted: Mon May 24, 2010 7:14 am 
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Joined: Tue Apr 04, 2006 9:06 am
Posts: 117
Location: Maine
There are disadvantages to linked-benefit plans, just as with any insurance product. They're not perfect. But if the client isn't comfortable spending the money for a traditional, stand-alone long term care insurance plan, then a linked-benefit plan may offer a sound alternative.

Sure, analytically, stand-alone long term care insurance is the best thing going by far. It's incredibly flexible, it offers the most dollar-for-dollar protection, it has the lowest "buy-in" cost, and it can be tailored to meet practically any client's, or family's, need, and it provides (in many cases) Partnership protection. It's ALWAYS my first recommendation.

And all that is wonderful... if the client agrees, and buys the product. But, if the client doesn't want it, and doesn't buy it, it's not doing anyone any good, is it? If that client has $50,000 sitting in CDs that he or she isn't using, and they identify that as the money they'd be using to pay for LTC if they need it, then a linked-benefit plan provides them with a very sound alternative. If your 65 year old, female client can turn $50,000 from a CD into $183,000 for LTC, isn't that a good outcome? Yes, she's "giving up" something - she's giving up an on-going premium that she doesn't want to deal with. In return, she's tripling what she has on hand to pay for long term care when she needs it.

Yes, you can argue that she's getting "less" life insurance and "less" long term care benefit than if she had bought stand-alone products, but she's got a lot more protection than if she'd done nothing. No answer is the right answer for everyone, but sometimes an imperfect solution is a lot better than leaving the client completely unprotected.


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 Post subject: Re: John Hancock Lifecare
PostPosted: Mon May 24, 2010 2:12 pm 
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Joined: Fri Dec 04, 2009 9:53 am
Posts: 91
A single-pay LTCi policy, with a "refund of premium upon death" rider, is much more efficient than the Life/LTC or Annuity/LTC combo products.

A healthy married couple, in their early sixties, could each get about 500k of LTCi benefits, for about $53,000 of single premium each. If they don't use it, the premium is refunded to the surviving spouse and/or heirs.

Scott A. Olson
Redlands, CA


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