Presentation is loading. Please wait.

Presentation is loading. Please wait.

Steve Cain Principal | National Sales Leader LTCI Partners, LLC LTC Planning Discussion: Industry Update & Sales Strategies.

Similar presentations


Presentation on theme: "Steve Cain Principal | National Sales Leader LTCI Partners, LLC LTC Planning Discussion: Industry Update & Sales Strategies."— Presentation transcript:

1 Steve Cain Principal | National Sales Leader LTCI Partners, LLC LTC Planning Discussion: Industry Update & Sales Strategies

2 1.US Department of Health & Human Services, John Hancock Cost of Care Survey, 2011.

3 For Today’s Discussion Let’s Assume… 3  You know what long-term care (LTC) is  You understand: -- The likelihood of needing care -- The cost -- The impact of inflation -- The impact on caregivers  You are the best hope of helping your clients manage this risk

4 Today’s Agenda 4  Industry Update  Positioning LTC Planning  Dissecting The LTC Sale  Traditional vs. Linked-Benefit Products  Working with Affluent Clients  Questions & Answers

5 Industry Update An Analysis of the Marketplace 5

6 6  Challenges from Low Interest Rate Environment -- The yield on the 10-year Treasury note closed last Friday (3/29/13) at 1.88% years ago (3/29/92), the yield was 7.28% 1  Change on electronic applications and simplified processing  More and more people have stand alone coverage in-force (high persistency)  Year Of new nursing home entrants, 6.4% used private LTCI and 32% used Medicaid  Year % used private LTCI and 30% were using Medicaid 2  Carriers announcing they are no longer offering lifetime benefits and limited payment options (10-pays)  Carrier entries & exits 1 Treasury Department 2 ERBI Issue Brief, September 2012

7 Industry Update 2013 Pricing & Underwriting Changes 7  Gender-based rates (most carriers)  Para-meds  Family history underwriting  New generation of products (conservative pricing)  Innovative inflation protection options  Hedging vs. fully covering the risk 1 Treasury Department 2 ERBI Issue Brief, September 2012

8 Positioning LTC Insurance Planning Planning for retirement should also take into account the unique risks associated with retirement, including :  Longevity The good news is people are living longer, healthier lives. The bad news is that many underestimate how long that might be. Doing so may put you at risk of outliving your retirement savings.  Market Investments provide growth potential to keep pace with rising costs. However, all investments carry some risk of loss, and the market can be volatile in the short-term; impacting how much money you’ll have in retirement.  Inflation and Taxes Both inflation and taxes can take a bite out of your retirement savings—inflation by reducing the purchasing power of what you have and taxes by reducing the amount of income you have left to spend or invest.  Health Care Costs Unexpected health care costs can quickly derail retirement savings, as can rapidly rising medical costs, fewer employer-sponsored retiree health plans and limited government health benefits.  Long-Term Care Needs The expenses associated with a prolonged illness that requires special care can take a toll on a retirement income plan, depleting assets you’ve worked hard to accumulate.  Leaving a Legacy Fulfilling the goal to leave a financial legacy for loved ones or charitable organization often involves tradeoffs: striking a balance between meeting your retirement income needs and satisfying your legacy desires.

9 Managing Retirement Risks

10 Long-Term Care Planning: A Three-Step Process Step 3 Implement the Strategy Step 2 Assess Planning Options Step 1 Establish the Need or Identify the Risk (financial, medical or emotional)

11 Three Broad Categories of Solutions TraditionalLinked Life/LTCChronic Care Riders Primary Reason for purchase LTC Planning Life Insurance IRS Tax Code7702B 101(g) Advisor CE requiredYes No Accelerated Death Benefit for LTC needs NoYes Additional Rider after ADB exhausted N/AYesNot available Benefit Triggers2 of 6 ADL’s or cognitive impairment Varies, but similar MarketingHealth InsuranceLong-term careCan’t use LTC label InflationMandated to offer Not included UnderwritingLTC onlyLife and LTC

12 Representative Carriers Traditional LTCLinked Life/LTCLife with 7702B Riders Life with 101(g) Chronic Care Riders John Hancock Genworth Mutual of Omaha LifeSecure MedAmerica Transamerica Northwestern Mass Mutual NY Life Genworth OneAmerica Lincoln Pacific Life AXA John Hancock Nationwide American National (ANICO) Aviva Columbus Life EquiTrust Guardian Great-West Hartford Lincoln National Life National Western Life NACOLAH and Midland National Pacific Life Penn Mutual Protective Symetra Transamerica United of Omaha

13 Comparing Traditional and Linked If your client:Try the following approach: Here’s why: Is a business owner or has HSATraditional LTCIProvides premium deductibility Has experience with a family long- term care situation Traditional LTCI Understands the impact of an LTC claim event and can buy large benefit amount Likes “pure protection” products like Term Life Traditional LTCI 100% of premium goes towards LTC Insurance protection Concerned about future inflationTraditional LTC Can buy automatic CPI coverage or additional coverage through GPO 13

14 Comparing Traditional and Linked If your client:Try the following approach: Here’s why: Is concerned about “paying premiums and never using benefits” Linked-Benefits Provides a death benefit, a pool of benefit dollars for LTC claims and/or a return of premium Not convinced his/her risk is that great Linked-Benefits Pays benefits even if LTC is not needed Considers himself or herself a self- insurer Linked-Benefits Wants to exercise control and take advantage of a smarter way to self- insure Has highly liquid assets readily available Linked-Benefits Seen as an asset transfer Already said “no” to LTCI Linked-Benefits It’s a viable alternative that allows the customer to retain control of assets while addressing the need to plan for LTC Has existing non-qualified life insurance policy that is out of the surrender charge period Linked-Benefits May want to 1035 exchange to TLC, if suitable, and as permitted by 1035 exchange rules 14

15 IRS Code Sections:  7702B – defined QLTC (accident & health insurance / tax-free benefits)  162 – ability to deduct accident & health insurance (c-corp owners are treated as employees)  213 – age-based deductibility for pass-through entities (s-corps, LLCs or LLPs)  106 – premium is not included /counted as imputed income  Treasury Regulation – employer can create a class of select employees to offer this coverage to (ability to carve-out or “discriminate”)  223 – LTC Premiums can be deducted through an HSA on a pre-tax basis, subject to age based premium limits: 40 or less – $350 More than 40 but not more than 50 – $660 More than 50 but not more than 60 – $1,310 More than 60 but not more than 70 – $3,500 More than 70 – $4,370 The Tax Treatment of LTC Insurance

16 16

17  Yes – your client can self-insure and handle a LTC event financially…but this is about healthcare  LTC is not a vehicle for asset protection for wealthy clients…the planning can be considered concierge healthcare  Before and during a claim, the insurance contract provides the insured access to team of advocates who can assist in designing, developing and managing a plan of care Strategies for Affluent Clients

18  These advocates are RNs, LVNs or geriatric care managers (not employed by the insurance company) who will come to your home for an assessment, negotiate provider discounts on your behalf and help you interview home healthcare agencies or perform site-visits at facilities to help you determine the right fit  These clients might be sufficiently liquid in the event of an extended healthcare need, but who is going to manage, monitor and adjust their plan of care (with their physicians & caregivers)?  If your clients self-insure…do they have a bona-fide plan for an extended healthcare event? Who is going to manage the “stuff” that comes along with a loved one with a chronic ailment? Strategies for Affluent Clients

19  Considerations when self-insuring – timing (never know when it might happen), liquidity (is their money tied up into their business, real estate or the stock market…will there be a state and federal capital gains event?) and the lack of a bona-fide healthcare plan  Most HNW clients are entrepreneurial – they can deduct the LTC premium if written through their business (tax treatment/ incentives)  This coverage can be viewed as an estate planning tool vs. reimbursements for nursing care  24-hour care can cost up to $500/day at home for HNW clients

20 LTCI Partners Sales Support Confidential & Proprietary

21 Conversation Starters Getting Started… You can contact LTCI Partners by calling us toll free at and asking for an associates extension below or choosing the following workgroup options: Helpful Extensions National Sales Office: Option 3 New Business/Pending Applications: Option 4 Contracting and Licensing: Option 5 Commissions: Option 6www.ltcipartners.com


Download ppt "Steve Cain Principal | National Sales Leader LTCI Partners, LLC LTC Planning Discussion: Industry Update & Sales Strategies."

Similar presentations


Ads by Google