WHAT’S WORKING NOW? LONG-TERM CARE PLANNING AND SALES TECHNIQUES Susan Suben, President, MS, CSA Long Term Care Associates, Inc. 31 Greenbush Street, Cortland,

WHAT’S WORKING NOW?LONG-TERM CARE PLANNING AND SALES TECHNIQUESSusan Suben, President, MS, CSALong Term Care Associates, Inc.31 Greenbush Street, Cortland, NY 13045800-422-2655 [email protected]

LONG-TERM CARE PLANNING

VS.LONG-TERM CARE INSURANCE

WHEN DO YOUR CLIENTS MOST OFTEN FOCUS ON LTC? When they are sick When they see the consequences of needing

care When they see what Medicare does not pay

forWHEN THEY ARE IN CRISIS!

IT’S YOUR OBLIGATION TO ADDRESS YOUR CLIENTS’ RISK OF NEEDING LONG-TERM CARE, THE GREATEST THREAT TO THEIR

RETIREMENT SAVINGS

AGENDA

The 3 essential elements to LTC planning Confidence Objections Evolution of Products Designing a Policy Underwriting Tax Advantages

LONG-TERM CARE PLANNING

Critical component in retirement planning LTC: Unintentional invasion of principal Deals with what your clients are most

concerned about in retirementLifestyleOutliving their retirement portfolio

Genworth: Planning for Long Term Care: A critical Component in Retirement Planning. Long Term Care Insurance Planning and Sales Techniques in 20 Minutes. Presented by Harley Gordon, President, The Corporation for Long-Term Care Certification, 40047 5/3/06

FOUR QUESTIONS Will your clients live a long life? Will your clients get sick? Do your clients understand the consequences

of needing care? Do your clients know how they will pay for

their care?


STEP 1: ESTABLISHING THE NEED

BASIC AGREEMENT: Living a long life is a likelihood Living a long life = getting old Getting old = getting sick Getting sick = needing care


STEP 2: ESTABLISHING THAT LTC WILL HAVE SERIOUS CONSEQUENCES ON THEIR FAMILYBASIC AGREEMENT: LTC is not about your client; IT’S ABOUT

HIS/HER FAMILY Who will provide the care? LTC is a family, not an individual issueWould you prefer your family to supervise

your care or provide it?Genworth: Planning for Long Term Care: A critical Component in Retirement Planning. Long Term Care Insurance

Planning and Sales Techniques in 20 Minutes. Presented by Harley Gordon, President, The Corporation for Long-Term Care Certification, 40047 5/3/06

STEP 3: ESTABLISHING THAT

NOTHING PAYS FOR LTC EXCEPT ASSETS AND INCOME

BASIC AGREEMENT: LTC is paid for by cash Need for cash = invasion of principal Invasion of principal = Unsustainable lifestyle

in retirementTHE ONLY WAY TO PAY FOR LTC IS WITH A

RETIREMENT PORTFOLIO


What did you promise your clients about their portfolio?

Reasonable people will believe that they can live a long life…Your clients believe this that is why they made you promise that they will not outlive their retirement portfolio


IF YOU DO NOT TALK TO YOUR CLIENTS ABOUT LTC PLANNING YOU ARE NOT

DOING YOUR JOB

WHY YOU DON’T TALK TO YOUR CLIENTS ABOUT LTC Don’t understand the topic: LTC vs.

LTCI Emotional Marginal Coverage Don’t understand differences between

companies Don’t know how to design a policy Premium increases Companies exiting market Driven by commission not advice

LIFE INS. VS. LTC INS. Consequences Life Insurance because you die Long-Term Care Insurance because you live

IF YOU TALK ABOUT THE CONSEQUENCES OF NOT

PLANNING, THE PRODUCT BECOMES SELF-EVIDENT


MUTUAL OF OMAHA CONSUMER STUDY 2011

What was your primary reason for purchasing LTCI?

To protect my assets: 23.6% Security/Peace of Mind: 18.1% To cover the cost of LTC services I

might need in the future: 17.4% I don’t want to be a burden to my

family: 17.4% I know I’ll need it: 16.4%


What was your primary reason for purchasing LTCI when you did rather than waiting?

Less expensive to purchase now: 51.1%

I know I’m getting older: 19.4% Concern about future health: 11.7% Planning for the future/retirement:

11.4%


Did any of the following events happen in your life around that time?

Planning for retirement: 52.1% Retired/spouse retired: 36.2% A loved one needed LTC: 34.7% A change in financial situation: 17.4% The birth of a child or grandchild:

6.5%


Where did you first learn about LTCI?

Family or friends: 34.7% Information from employer: 17.6%Financial Advisor: 8.9% Insurance Agent/Broker: 8.7%

OBJECTIONS My father/mother died young Everyone was healthy until they died My father/mother only needed care for

a short time I’ll take my chances The premium is wasted if I don’t use

the policy My children will take care of me

OBJECTIONS I’m single and have no children I’m married and have no children I’m married and have children Medicare will take care of me I’m a veteran It’s too expensive

POWER PHRASES This is nursing home avoidance insurance. Not one of

my clients wants to use their coverage. And no one wants to end up in a nursing home. Is that how you feel?

If you need care someday, who will provide the care? With no plan in place, what choice will they have?

Wouldn’t you rather have your spouse or family supervise your care rather than provide it?

The physical and emotional consequences to your family of a long-term care event will be priceless.

Do you see yourself getting older? There’s a pretty good chance you will need care. “But I may not get sick.” But living longer means a greater chance of becoming disabled.

How will you pay for your care? What asset will you cash in first?

ICA-ICB, What’s Working Now, Aaron R. Eisenach, CLTC, LTCP

POWER PHRASES What are the odds I’m going to need this?

Either 0 or 100%. It’s either going to happen to you or it’s not.

Turn the protagonist into a proponent!


WHO MIGHT BUY? Your Clients Children of Clients; Children for Clients Single; no children 2nd marriages Women entrepreneurs Prospects of special needs children Gay and Lesbian Couples Group Market

CONSIDER THIS

No one really self-ensures for LTC. They BET! They bet it will never happen to

them… How many Baby Boomers put away $200K

into a savings account, an irrevocable trust or an annuity that can only be used for LTC?


EVOLUTION OF PRODUCTS

THEN: Nursing Home Care 2 out of 5 triggers Not taxed qualified No inflation No Partnership No Couples Benefits No Dementia/Alzheimer’s coverage Average age 70+


NOW: Home Care 2 out of six triggers Tax qualified Numerous inflation options NYS Partnership plans Couples features All forms of dementia covered Average age 59

EVOLUTION OF PRODUCTSLTCI CRISIS? MetLife, Allianz, Guardian, Travelers –

gone Rate increases Stock market decline; housing market

crash High unemployment Financial ratings down

LTCI up 13% in 2010Up 9% in 2nd quarter 2011

We’re experiencing change, not crisis!ICA-ICB, What’s Working Now, Aaron R. Eisenach, CLTC, LTCP


LTCI is the only insurance that covers the services

individuals with Alzheimer’s and their

caregivers need

DESIGNING A POLICY

WE DON’T NEED LESS EXPENSIVE PREMIUMS. WE NEED LESS EXPENSIVE PLAN DESIGNS…


DESIGNING A POLICY

GOOD…BETTER…BEST Show three different policy designs Let your clients decideExample of “GOOD”: Show a “3x3

plan” – 3 years, $3000/month, and 3%

compoundOr a “4x4”, “5x5”, etc. Keep it simple!


DESIGNING A POLICY

What if my client gets Alzheimer’s? What if he gets Alzheimer’s and doesn’t buy ANY plan because it was too expensive?

We would NEVER tell a 35-year old parent who can’t afford a $1M UL policy not to buy a $300K life policy!


DESIGNING A POLICY

REMEMBER THE NYS PARTNERSHIP PLANS!!

The only policies that include 5% compound inflation

Total/Partial Asset Protection Lifetime coverage Portable benefits Apples to Apples: Less expensive than

traditional policies

NEW MESSAGES, NEW SOLUTIONS You’re never going to design the perfect plan Don’t let the perfect get in the way of the

good Reasonable plan designs with reasonable

premiums Linked Benefit

UL Life with LTC riders; no wasted premiums, dual strategy


UNDERWRITING

Factors Effecting the Premium Age: No control; Younger – lower

premium; “Save Age” Features Selected Underwriting

UNDERWRITING Field Agent Application MIB Phone Interview Face to Face Interview “Cognitive Screen” Medical Records Para-medical Exam

UNDERWRITING

Uninsurable Conditions AIDS Alzheimer’s, Dementia, Memory Loss Parkinson’s Disease ALS, MS, MD

UNDERWRITING

Uninsurable Equipment Wheelchair Quad Cane Walker Oxygen

UNDERWRITING

Insurable ConditionsWaiting periods are generally required Cancer Heart Attack Joint Replacement Depression Minor Surgery Stroke/TIA

UNDERWRITING

HEALTH RATINGS Preferred Plus Preferred Premier Standard Select Class 1, 2, 3, 4

UNDERWRITING

Most Frequent Claims Dementia/Cognitive Impairment Cancer Strokes Bone & Joint Disorders

UNDERWRITING

StrokeMedAmerica: 12 month waitMutual of Omaha: 24 month waitJohn Hancock: UninsurableGenworth: Uninsurable

UNDERWRITING

Insulin Dependent DiabetesMedAmerica: max 70 unitsJohn Hancock: max 50 unitsMutual of Omaha: max 50 unitsGenworth: Uninsurable

UNDERWRITING

HypertensionGenworth: 200/110Mutual of Omaha: 170/94John Hancock: 160/90MedAmerica: 160/90

TAX TREATMENT

Individual Federal: TQ premiums deducted as

medical expense if itemized deductions exceed 7.5% of adjusted gross income

Age-banded deductions New York State: 20% tax credit

TAX TREATMENT

Businesses Self-employed

100% of premium for TQ policy as above the line business expense

C-CorporationEntire premium as medical expenseExcluded from employee’s income if employer-paid

TAX TREATMENT

S-Corporation Not more than 2% interest, business can

deduct entire premium as medical expense Not included as taxable income More than 2% interest, follow self-employed

guidelines

HOW WILL YOU SELL?

Buy coverage for yourself! Focus on planning not product Work with a LTCI specialist Be ready to provide stand-alone solutions

and linked Life/LTCI productsCARE ABOUT YOUR CLIENTS AND THEIR

FAMILIES – PROTECT THEM!IT’S YOUR RESPONSIBILITY….

QUESTIONS??THANK YOU

WHAT’S WORKING NOW? LONG-TERM CARE PLANNING AND SALES TECHNIQUES Susan Suben, President, MS, CSA Long Term Care Associates, Inc. 31 Greenbush Street, Cortland,

Documents

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