what’s working now? long-term care planning and sales techniques susan suben, president, ms, csa...
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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?
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 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
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 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
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
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
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
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
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
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%
MUTUAL OF OMAHA CONSUMER STUDY 2011
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%
MUTUAL OF OMAHA CONSUMER STUDY 2011
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%
MUTUAL OF OMAHA CONSUMER STUDY 2011
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!
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
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?
ICA-ICB, What’s Working Now, Aaron R. Eisenach, CLTC, LTCP
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+
EVOLUTION OF PRODUCTS
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
EVOLUTION OF PRODUCTS
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…
ICA-ICB, What’s Working Now, Aaron R. Eisenach, CLTC, LTCP
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!
ICA-ICB, What’s Working Now, Aaron R. Eisenach, CLTC, LTCP
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!
ICA-ICB, What’s Working Now, Aaron R. Eisenach, CLTC, LTCP
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
ICA-ICB, What’s Working Now, Aaron R. Eisenach, CLTC, LTCP
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