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Re: SURVIVORSHIP

Posted by Steve Eads, CLU on January 29, 2002 at 21:50:44:

In Reply to: SURVIVORSHIP posted by RATCO PAL on January 26, 2002 at 14:34:14:

: What's the value of a survivorship option?

Scott touched on one aspect of Survivorship that is very critical to the LTC insurance planning process. Contractual language (internal policy provisions, legal definitions, "the fine print", if you will) should the most critical concern of any consumer shopping for LTC insurance. Comparing as many definitions as posible is the order of the day.

The Survivorship Rider can be very beneficial in those situations already mentioned...but it is NOT the most important policy rider to be considered for the vast majority of consumers. One should consider the present and future value of the cost (premium) paid for such a benefit over time...especially if one is considering to eliminate the most critically important rider...Compound Inflation/Benefit Increase rider...many times the most neglected rider due to cost alone.

I find it absolutely apauling when agents recommend (to consumers under age 70) riders like Survivorship and play down the importance of Compound Inflation...the key word being COMPOUND...just to keep cost in line with what the "agent" thinks the consumer is willing to pay so that a sale can be made.

Some plans even boast of including Survivorship as a contractual benefit (no additional purchase necessary). "Whistles and Bells." Beware of the "fluff" when it may be used to hide the "real stuff." Meat and potatoes first, desert second is the best advice most of us can give or receive when it comes to LTC insurance. Cover the highest known risks first...as fully as possible...if you want to splurge, go for the desert afterwards. It's the highest and best use of money when considering insurance of any kind!!!

Steve Eads, CLU
seads@EadsAssociates.com

Follow Ups:

Re: SURVIVORSHIP : : What's the value of a survivorship option? : Scott touched on one aspect of Survivorship that is very critical to the LTC insurance planning process. Contractual language (internal policy provisions, legal definitions, "the fine print", if you will) should the most critical concern of any consumer shopping for LTC insurance. Comparing as many definitions as posible is the order of the day. : The Survivorship Rider can be very beneficial in those situations already mentioned...but it is NOT the most important policy rider to be considered for the vast majority of consumers. One should consider the present and future value of the cost (premium) paid for such a benefit over time...especially if one is considering to eliminate the most critically important rider...Compound Inflation/Benefit Increase rider...many times the most neglected rider due to cost alone. : I find it absolutely apauling when agents recommend (to consumers under age 70) riders like Survivorship and play down the importance of Compound Inflation...the key word being COMPOUND...just to keep cost in line with what the "agent" thinks the consumer is willing to pay so that a sale can be made. : Some plans even boast of including Survivorship as a contractual benefit (no additional purchase necessary). "Whistles and Bells." Beware of the "fluff" when it may be used to hide the "real stuff." Meat and potatoes first, desert second is the best advice most of us can give or receive when it comes to LTC insurance. Cover the highest known risks first...as fully as possible...if you want to splurge, go for the desert afterwards. It's the highest and best use of money when considering insurance of any kind!!! : Steve Eads, CLU : seads@EadsAssociates.com

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