IT’S ABOUT THE PLAN AND WHAT WILL PAY FOR IT! BY NANCY A. DYKEMAN, CLTC, CSA FOR CERTIFICATION FOR LONG-TERM CARE CORPORATION NOVEMBER 28, 2012 More Arrows.

IT ’S ABOUT THE PLAN AND WHAT WILL PAY FOR IT!

B YN A N C Y A . D Y K E M A N , C LT C , C S A

F O RC E R T I F I C AT I O N F O R L O N G - T E R M C A R E C O R P O R AT I O N

N O V E M B E R 2 8 , 2 0 1 2

More Arrows in Your Quiver While Planning

for Long-term Care

Pick one, Any one!

AGENDA

What Are You Doing Now? (how’s that working?)Are application declines haunting you?Are you talking positively about premium

increases?Fewer Carriers in Stand-alone LTCi.How to make a change by adding arrows.What other money in a portfolio is available?How do I learn more?

What Are You Doing Now? (and how’s that working?)

How do you introduce yourself? To industry professionals To groups To Consumers

Are you a “Long-term Care Specialist?” or“Long-term Care Insurance Specialist?

How About a Planning Specialist?

Insurance Producers

Financial Advisors

Estate Attorneys

CPAs

Who Qualifies for LTCi?

HealthyFinancially Able to Pay PremiumsUS CitizenUsually Under age 80HealthyHealthy Healthy…

What if?

Not HealthyNot Able to Pay PremiumsNot a US CitizenOver Age 80 or Age 90Health Concerns

Are application declines haunting you?

Better to take an application that will most likely be a decline, or pre-qualify and have less declines than others?

Declines hurt the applicant, you, the carriers and the industry.

What if?

Can you offer ideas about:Family involvement?A life insurance policy?An Immediate Annuity or Deferred

Annuity?

A financial investment to cover care?A way to self-pay without spending assets?

Are you talking positively about premium increases? WHAT???

Since about 2003 premiums have increased. Reserves haven’t earned enough in interest.We are living longer and using our policies.Premiums paid in + interest on reserves

guarantee claims paid. Why do you struggle with this?Be confident about the need for increases and

how to work through them so people don’t cancel.

Fewer Carriers in Stand-alone LTCi.

So?Another fact of life.If a carrier has to leave the industry by not taking on

more risk why is this bad?Existing policyholders gain protection when carriers stop

selling.Fewer carriers selling creates more solid competition to

meet the market need. Why do you struggle with this?

How to make a change by adding arrows.

Planning takes Practice!Comfort is KeySeeking Education is ImportantLearning from the BestFinding Partners is a ThoughtTaking Time to Make Changes

What other money in a portfolio is available?

Life InsuranceAccelerated Death Benefits or Cash Value:

Life insurance death benefit paid in advance

(tax-free)

Policyholder must have a life-threatening

diagnosis or be terminally ill

Long-Term Care Annuities:

An annuity is a series of regular payments over a specified and defined period of time Funds for annuity come from a single premium m payment

Two types Immediate long-term care annuity Deferred long-term care annuity

Life Settlements: Sale of life insurance policy to raise cash Policy is sold for its present value Men: 70 and older Women: 74 and older Policies that can be sold

Universal life insurance Term insurance Whole life insurance Policies held in irrevocable life insurance trusts Buy-sell agreements Key man policies

Viatical Settlements: Allow terminally ill individuals (life expectancy of less than two years) to sell life insurance policy to use money to pay for care

Viatical company pays individuals a percentage of the death benefit based on life expectancy

Viatical company owns the policy, pays the premiums and is the beneficiary

Health Savings Accounts: Tax-free contributions can be made to HSA up to an annual limit Funds are carried over every year and all gains are tax-free

Offers tax-advantage alternative used to fund long-term care insurance premiums and accumulate funds to pay for long-term care expenses Can be set up by an individual or employer

Reverse Mortgages: Individual receives cash against value of home without selling it

Available for homeowners age 62 and older

Can receive lump-sum payment, monthly payment, or a line of credit

Not taxable, and does not count toward income or affect Social Security or Medicare benefits if payments received are spent within the month they are received

And, of Course, “I’m going to Self-Pay!”

What were we just talking about? All of these are Self-Pay!

Why did they bother to set up any retirement accounts or investments to provide income in the future if they planned to spend it all anyway?

Their lifestyle depends on income so is that their plan to pay for their care?

A Word About Hybrids - Combos

Using another funding vehicle to pay for extended care and win in the end!

Life Insurance with LTC embedded.Health must qualify on both sides

Annuity with LTC embedded.No health questions for annuity and a few health

questions, not full underwriting for LTC.

How do I learn more?

Your company or brokerage firm offers webinars and local seminars on alternatives to LTCi.Online training about something you aren’t familiar with.Research on the web.Financial Partners who are willing to teach you.The Summit annuallyIntercompany LTCi Conference annuallyRead: Broker’s World Annual LTCi Survey and others Industry Newsletters

Re-Take a CLTC Class!

How long ago did you take the course?Did you take it in the classroom or online?What have you done since?Go online at:www.ltc-cltc.com Left Banner has Master Class ScheduleSign up! (reduced cost for past grads)

Make a strong commitment to continuous learning and growing your business.

SUMMARY

What Are You Doing Now? (how’s that working?)Are application declines haunting you?Are you talking positively about premium increases?Fewer Carriers in Stand-alone LTCi.How to make a change by adding arrows.What other money in a portfolio is available?How do I learn more?

Thank you!