(In response to Joseph Finora’s “Mitigating the Longevity Risk,” seen online at www.SeniorMarketAdvisor.com).
If companies respond by raising interest rates, there is nothing to keep them honest. I have years of experience with these instruments and falling rates are, generally, dealt with faster than rising ones. Rising interest rates may not be credited as a function of current interest rates since they correspond with the general account or if banded, the banded investments. I am working with companies now that have a 4 percent bottom and hoping for the best. Multi-years are preferable for the client.
- Joan Lockwood
Via the Internet

Cheaper is not always better
(In response to Roger Balsam’s letter in the May edition of SMA).
Right on, Roger. I thought that I was the only one on the planet who never agreed with the adage, “something is better than nothing.”

Case in point: I spoke recently with a single woman of 66, living in New Jersey, who purchased a LTC policy that her agent convinced her she could afford. The problem was that on a $40,000 annual income, she bought what was affordable, but not what was in her best interest.

If she winds up in a facility, she would have to deal with a $200/day out-of-pocket, which would wipe out all of her assets in a year and a half. She would have been better off not purchasing a policy and if care were ever needed, in a short period of time, Medicaid would be there for her. The only one who wins in situations like this is the agent, who obviously only had his own interests in mind.
- Arthur Rudnick, LTCP
White Plains, N.Y.