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Solving CLIENT NEEDS for Chronic Illness Care

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Presentation on theme: "Solving CLIENT NEEDS for Chronic Illness Care"— Presentation transcript:

1 Solving CLIENT NEEDS for Chronic Illness Care
WCLAG.1772 (01.11)

2 Important Information
LifeTime Platinum III UL, policy form WC-U15 and state variations thereof, is a flexible premium universal life insurance policy issued by West Coast Life Insurance Company which is located at 2801 Highway 280 South, Birmingham, AL Product features and availability may vary by state. Subject to underwriting. Subject to up to a 2-year contestable and suicide period. Benefits adjusted for misstatements of age or sex. Consult policy for benefits, riders, limitations and exclusions. In Montana, unisex rates apply. West Coast Life does not render legal or tax advice. Information in this summary is based on current tax laws that are subject to change. Not available in all states. All payments and all guarantees are subject to the claims paying ability of West Coast Life. ExtendCare rider (Form WC or Form ICC10-W-R2) is issued by West Coast Life Insurance Company. Actual terms and conditions contained in the rider govern all benefits provided. Please see the rider for more detailed information. Available only at issue and at an additional cost. Assumes medical and financial underwriting qualifications at time of initial application. Not available in all states. State variations may apply.

3 The Facts 75% of people 65 and older will eventually need Long Term Care. By 2020, approximately one in three workers will be providing some form of Long Term Care for their boomer parents. National average cost of care in a nursing home is $80,850 per year 92% of all Long Term Care Insurance claims are for about three years

4 The Facts Custodial care, which makes up 90% of all home health care, is not covered by Medicare About 75% of all single people and 50% of all couples spend their entire savings within one year of entering a nursing home. For every one person receiving care in a nursing home, there are four people receiving home health care. 

5 Overview Recent Popularity of “Living Benefits”
Several Product Designs in the Market Linked Products vs. Rider Approach Our Approach = Optional Accelerated Death Benefit Rider

6 How Does ExtendCare Stack Up?
Simple Question: How does our ExtendCare Rider compare to other companies in this market? Answer: It depends on what product design you are comparing! Reality: You may have 2 Different Answers

7 Competitive Landscape The Two Approaches
Linked Benefit Product Optional Rider Lincoln MoneyGuard Hartford Genworth TLC John Hancock John Hancock SPWL Nationwide Nationwide YourLife SPUL AXA Data in the comparisons made in this presentation is based on information available from the companies and is believed to be current as of 1/11/11, but is subject to change. The contents of this presentation are for illustration purposes only. Individual situations will be different based on age, sex, and health status of your clients. For current information, please use our Winflex software. Other Industry Competitors: OneAmerica (AssetCare-I) Aviva Prudential New York Life NACOLAH Allstate / Lincoln Benefit State Farm

8 Linked Benefit vs. Optional Rider
What is Similar? Both Provide Accelerated “Living Benefit” to Cover Cost Associated with LTC / Chronic Illness Care Designed to offer benefit payments that qualify for “Favorable” tax treatment * Initial Benefit Eligibility Physician Certification: Client cannot perform 2 of 6 ADLs or 2. Severe Cognitive Impairment *It is important for your client to understand that the ExtendCare rider is part of a life insurance policy. It is not a health based product and does not qualify for certain tax deductions. Comparisons are based on information available from the companies and is believed to be current as of 1/11/11, but is subject to change.

9 Linked Benefit vs. Optional Rider
What is Different? Primary purpose of Linked Products is to Leverage the premium to Increase the LTC benefit 2. Primary purpose of “Rider” is to add Flexibility to Life Insurance by allowing access to DB if Chronically Ill 3. How the Benefit Amount is Determined at Issue (Duration vs. Specified Amount) Lincoln MoneyGuard: (Benefit Duration Ranges from 2-7 years) - Base Acceleration Duration 2 or 3 yrs (LTC Pool = DB) - Extension of Benefits Duration 4-7 yrs (LTC Pool > DB) West Coast Life’s ExtendCare (Client Specifics Benefit Amount $1,000 - $8,500) Comparisons are based on information available from the companies and is believed to be current as of 1/11/11, but is subject to change.

10 “Linked” Benefit Products How are they Illustrated?
Typical Case Example: F60, Std NT, $100k Single Premium Lincoln MoneyGuard Benefit Duration 2 years 4 years 6 years Base Benefit Duration (CCBR*) Extension of Benefits (EOBR**) None Total LTC/Chronic Illness Benefit Available $224,365 $401,576 $579,888 Lifetime Guaranteed Death Benefit $200,788 $193,296 Maximum Monthly Benefit Available $9,349 $8,366 $8,054 Residual Death Benefit $22,436 $20,078 $19,329 Comparisons are based on information available from the companies and is believed to be current as of 1/11/11, but is subject to change. *Convalescent Care Benefits Rider = Accelerates the CCBR Benefit Limit for covered long-term care expenses for 2 years or 3 years. The CCBR Benefit Limit is equal to the Specified Amount of coverage. **Extension of Benefits Rider = Extends long-term care benefits for 2 years or 4 years. Example used is Lincoln Money Guard Reserve

11 Linked Benefit vs. Optional Rider Typical Case Scenario
“Instant Leverage” Sale Comparisons are based on information available from the companies and is believed to be current as of 1/11/11, but is subject to change. Leverage the Power of Underwriting - “The Green Zone”

12 Optional Rider vs. Linked Benefit
What is Different? – A Closer Look 101(g) vs. 7702B Application Process (Traditional vs. Transactional) How The Benefit Amount is Determined Benefit Payment Method (Indemnity vs. Reimbursement) Premium Payment Options Health Licensing Requirements Return of Premium & Residual Death Benefit Comparisons are based on information available from the companies and is believed to be current as of 1/11/11, but is subject to change.

13 West Coast Life’s ExtendCare vs. “Linked” Life/LTC
ExtendCare Rider Differences West Coast Life’s LTP III with optional ExtendCare Rider Lincoln MoneyGuard Reserve UL Genworth Total Living Coverage (TLC) John Hancock LifeCare SPWL Issue Ages 20-80 30-80 18-79 30-75 How Benefit is Calculated Option to Choose Benefit Amount ($1,000-$8,500) Duration is Elected Ranges from 2-7 years Ranges from 2-8 years Lifetime also available Benefit Payment Method Indemnity Reimbursement Elimination Period 90 or 365 Days 90 days Proof of Care Not Required Proof of care is required to Reimburse expenses Use of Benefit Payments Benefit payments can be used For Any Purpose Benefit Payments are only Reimbursed for Qualified LTC services Impact of Claim on DB and Cash Values Dollar for Dollar Proportional Premium Payment Flexibility Single pay up to Lifetime Limited to 1,3,5,7 And 10-pay Single-Premium Only Risk Class Availability Same as Base Policy Non-Smoker Smoker Preferred No-Nicotine Standard No-Nicotine Standard Nicotine Substandard Ratings Up to Table 4 Not Available Substandard Ratings may be available Maximum Face Amounts Offered Up to $5M Up to $750,000 Up to $1.2M Up to $540,000 Health License or additional CE Requirement Health License and state specific CE Training is Required Comparisons are based on information available from the companies and is believed to be current as of 1/11/11, but is subject to change.

14 West Coast Life’s ExtendCare vs. “Rider” Competitors
ExtendCare Rider Differences West Coast Life’s LTP III with optional ExtendCare Rider Hartford Freedom UL LifeAccess Rider John Hancock UL-G 11 LTC Rider Nationwide YourLife NLG UL Issue Ages 20-80 21-80 How Benefit is Calculated Option to Choose Benefit Amount ($1,000-$8,500) Lesser of 2% of DB or IRS per diem limit Benefit % is Elected 1%,2% or 4% of DB Benefit Payment Method Indemnity Reimbursement Elimination Period 90 / 365 Days 90 days 100 days Proof of Care Pays a monthly benefit without having to provide proof of care, bills or receipts Proof of care is required to Reimburse expenses Use of Benefit Payments Benefit payments can be used for any purpose Benefit Payments are only Reimbursed for Qualified LTC services Benefit payments can be used for any purpose Impact of Claim on DB and Cash Values Dollar for Dollar Proportional Premium Payment Options Single pay up to Lifetime Risk Class Availability Same as Base Policy Standard up to Table E Substandard Ratings Up to Table 4 Up to table 6 Up to table 3 Up to table E Maximum Face Amounts Offered Up to $5M Up to $1M Health License or additional CE Requirement Not Required Health License and state specific CE Training is Required Comparisons are based on information available from the companies and is believed to be current as of 1/11/11, but is subject to change.

15 How is ExtendCare Different vs. our CIADB Rider?
New Rider Name = “ExtendCare” Added Rider to our NLG Product Can Now Accelerate Up to 100% of DB Increased Maximum Monthly Benefit Amount Client Can Now Specify Benefit Amount (Up to Maximum Allowed $1,000 - $8,500) Increased Maximum Face up to $5M

16 Case Study #1 Jack is 57M Preferred Non-Tobacco,
Successful executive with a fortune 500 company Concerned about: Long Term Protection for his family Rising costs of Chronic Illness Care Solution: Jack decides to purchase a $3M West Coast Life’s LifeTime Platinum III UL with the new ExtendCare Chronic Illness Rider.

17 Premium w/o ExtendCare
Case Study #1 Benefits: Acquired $3M of guaranteed UL protection Coverage for potential chronic illness Elected $8500/month benefit If he doesn’t use ExtendCare option, life insurance still passes income tax free to heirs Premium w/o ExtendCare Premium w/ ExtendCare Premium Difference $38,018 $39,697 $1,679 This case study is hypothetical. Individual situations will be different based on age, sex, and health status of your clients. For current information, please use our ELI software. Jack adds $3M in chronic illness coverage for only 4.4% increase in cost!

18 Available for Chronic Illness Coverage
Case Study #2 Mary is 67F with $250,000 in CDs she plans on passing onto her 7 grandkids if she doesn’t use it. She is very concerned about chronic illness coverage. Solution: Mary decides to purchase West Coast Life’s LTP III UL with the new ExtendCare Chronic Illness Rider. Payment Guaranteed Life Insurance Available for Chronic Illness Coverage $250K single premium $740,000 This case study is hypothetical. Individual situations will be different based on age, sex, and health status of your clients. For current information, please use our ELI software.

19 Case Study #2 Benefits: Acquired $740,000 of guaranteed UL protection
Coverage for potential chronic illness Elected $8500/month benefit If she doesn’t use ExtendCare option, life insurance still passes income tax free to heirs Reassured that she can potentially leave over $70K more to each of her 7 grandchildren This case study is hypothetical. Individual situations will be different based on age, sex, and health status of your clients. For current information, please use our ELI software.

20 ExtendCare Rider Review
Optional Rider on Competitive NLG UL (Premium Flexibility on Base Policy) Indemnity Payment Method (Benefit Can Be Used for Any Purpose) Client Can Specify Benefit Amount Available on up to Table 4 Maximum Face Amount Up To $5M No Health License Required

21 Questions? ???

22 Solving CLIENT NEEDS for Chronic Illness Care


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