re: Long Term Insurance Play ideas

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What's neat about the acceleration is it's a cash benefit...not indemnification. Helps the benefits to go a bit further.

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Yep. That is the main drawback to a traditional LTCi policy. If you don't use the policy, you lose it. Though, some have a benefit that if you want to stop paying, the money you've paid into it will be held in an account for you, waiting on a claim, so you aren't completely SOL.

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Try not to laugh in the interview when they whip out a Conseco LTC policy. I learned that one the hard way.

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Yea, doesn't seem like a good idea

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Yea those unlimited 5% inflation cadillac's are nice. Especially when they purchased in their 40s or 50s.

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I convinced my parent's to get one a few years back. It is insane how much they get for it. My grandfather is going through I claim right now, and my mom pretty much thanks me every day for convincing them to get the policies they have . I've got a small one of those on myself, so I could get the lifetime benefit before it went away.

I would not invest in insurance companies at the current time. Yes, interest rates are going up which will help insurers make more income on investments but only EVENTUALLY.

Their investments all have quite a bit of duration risk, which is not what you want in a rising rate environment. Since they must mark to market they will show losses as interest rates rise.

Once their bonds mature at par and are reinvested back at higher rates it will help them. But as the avg maturity on most portfolios is 5-7 years it will be still be some time before they will enjoy the benefit of higher rate investments.

Geneschin@gmail.com


Sorry mixed two email addresses

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Their investments all have quite a bit of duration risk, which is not what you want in a rising rate environment. Since they must mark to

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That's what I was wondering and expecting. Essentially, bond repurchase ends, interest rates go up, earnings suffer early on, invest on the dip for long term gains. This would be an extremely long play in a retirement account

It could be a long play for sure, it all depends on how quickly interest rates rise. I don't think it will be quick and if it is too drawn out you won't get enough of a pull back to make an entry point clear.

Many insurance companies are looking to/have altered their portfolios to reduce interest rate risk. They can't eliminate it but they can mitigate it somewhat. The rate of maturity and reinvestment coupled with how quickly interest rates move would be your best information on how to play your trade.

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Another aspect most people don't know about true LTCi policies is their tax deductibility. I was running some numbers the other day for a guy who owned a S-corp, and he was able to deduct he and his wife's premiums (factoring in the spousal discount), and it basically came to a 100% tax deduction for him.

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It's a big help. Another program most people don't know about is the partnership program that was revived in 2005. In Louisiana(since 2010) you can exclude your LTC benefits dollar-for-dollar from your assets when applying for Medicaid after you've exhausted your LTC bennies. It's a great way to protect your legacy for your kids/grandkids.