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0 0 Total Living Coverage SM For Producer/Agent Use Only Managing the Financial Risks of Long Term Care Your Wealth Preservation Options Presented by:

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Presentation on theme: "0 0 Total Living Coverage SM For Producer/Agent Use Only Managing the Financial Risks of Long Term Care Your Wealth Preservation Options Presented by:"— Presentation transcript:

1 0 0 Total Living Coverage SM For Producer/Agent Use Only Managing the Financial Risks of Long Term Care Your Wealth Preservation Options Presented by: E d J. Harris, CSA, CLTC Total Living Coverage SM Universal Life Insurance with Long Term Care Benefits Underwritten by Genworth Life Insurance Company Lynchburg, VA © 2006 Genworth Financial, Inc. All rights reserved.

2 Total Living Coverage SM FOR PRODUCER/AGENT USE ONLY. NOT TO BE REPRODUCED OR SHOWN TO THE PUBLIC. ©2006 Genworth Financial, Inc. All rights reserved. Universal Life Insurance with Long Term Care Benefits Underwritten by Genworth Life Insurance Company Lynchburg, VA 2PP /01/06

3 2 2 Total Living Coverage SM For Producer/Agent Use Only Introducing Total Living Coverage (TLC) from Genworth Life Genworth Life Insurance Company’s first linked-benefit product –With more to come! Genworth Life is… –An industry-leading provider of life and long term care insurance products –A long term care insurance pioneer –The nation’s leading provider of long term care insurance * * LifePlans 2005 Long Term Care Individual and Group Association Top Writers Survey Results. Based on number of individual policies sold and individual annualized premium in force.

4 3 3 Total Living Coverage SM For Producer/Agent Use Only A life insurance product that combines the features and benefits of universal life insurance and long term care (LTC) insurance. TLC is designed to be there when needed. Total Living Coverage – What Is It ?

5 4 4 Total Living Coverage SM For Producer/Agent Use Only Total Living Coverage - What is it? A Safe Place to Store Money Consumers will engage you in a discussion about a safe place to store money But, they are much less likely to want to discuss the doom & gloom of long term care

6 5 5 Total Living Coverage SM For Producer/Agent Use Only What Is TLC? A New Approach to Financial/Retirement Strategies –Client controls assets –Product is designed to provide a death benefit plus access to long term care benefits if needed –Frees funds for other uses Coverage For Your Client –Provides a death benefit –Provides income tax-free long term care benefits, if needed Customizable, Flexible and Guaranteed –Accelerated and extended long term care (LTC) benefit options –State-of-the-art long term care benefits –Minimum benefit guarantee –Return of premium (ROP) for first 15 years

7 6 6 Total Living Coverage SM For Producer/Agent Use Only Who Buys TLC? Client Profile –85% of TLC owners are Ages 58-72, retired or close to retirement –Average age, 66 –59% of TLC owners are females –Generally optimistic about the future Doesn’t think long term care will be needed –Recognizes that LTC should be included in financial and retirement planning Because the risk of needing long term care is great and the cost is too high to ignore Because Medicare and Medicaid are not suitable options for long term care

8 7 7 Total Living Coverage SM For Producer/Agent Use Only Who Buys TLC? (continued) Client Assets –Invested assets > $300,000; in CA & FL probably > $500,000 –Average TLC owner has $1.3M of invested assets Not including home and qualified plan assets –Currently self-insuring the financial risk of long term care –Asset-based LTC solution is attractive alternative Asset transfer not premium expense If LTC benefits are not needed, a death benefit amount is available for beneficiaries – TLC always pays a benefit Generally money purchase design, not defined benefit Portfolio assets available for other uses

9 8 8 Total Living Coverage SM For Producer/Agent Use Only If you or your spouse needed to pay for long term care expenses tomorrow, which of your assets would you liquidate first to help pay for that care?

10 9 9 Total Living Coverage SM For Producer/Agent Use Only TLC’s Core Components Specified Amount –Amount of death benefit on the date the policy is issued Accelerated Benefit Rider (ABR) –Draws down the specified amount to pay covered long term care expenses Extension of Benefits Rider (EBR) –Provides an additional benefit amount to pay covered long term care expenses if the ABR is depleted Maximum Monthly Long Term Care Benefit –Amount available on a monthly basis for covered long term care expenses Maximum Long Term Care Benefit Amount –Total amount available to pay covered long term care expenses

11 10 Total Living Coverage SM For Producer/Agent Use Only How Does TLC Work? (2 + 4 Example) Example –Female, age 65, no nicotine use –Preferred Life risk –Preferred LTC risk –20% LTC Couples Discount Has assets to invest Repositions $100,000 to purchase TLC –2-year ABR –4-year EBR –$231,874 specified amount –15-year ROP – (15-year free look) TLC Has Your Client Covered

12 11 Total Living Coverage SM For Producer/Agent Use Only A Basic Death Benefit (2 + 4 Example) TLC Covers the Client in the Event of Death $100,000 Initial Premium Initial premium amount with ROP for 15 years $231,874 Specified Amount Lump sum income tax free death benefit Policy value assumes 4.8% crediting rate 3.5% guaranteed (annual effective rates)

13 12 Total Living Coverage SM For Producer/Agent Use Only ABR Amount for LTC Expenses (2 + 4 Example) TLC Covers the Client If Long Term Care Benefits Are Needed $100,000 Initial Premium Initial premium amount with ROP for 15 years Policy value assumes 4.8% crediting rate 3.5% guaranteed (annual effective rates) $231,874 Specified Amount Lump sum income tax free death benefit $9,661 Maximum Monthly Benefit for two years

14 13 Total Living Coverage SM For Producer/Agent Use Only EBR Maximizes Coverage (2 + 4 Example) EBR Increases the Total Amount Available for Covered Long Term Care Expenses $100,000 Initial Premium Initial premium amount with ROP for 15 years $695,622 Total amount available for covered long term care expenses $9,661 Maximum Monthly Benefit for six years Policy value assumes 4.8% crediting rate 3.5% guaranteed (annual effective rates) $231,874 Specified Amount Accelerated Lifetime Benefit Amount for Maximum Monthly LTC Benefits

15 14 Total Living Coverage SM For Producer/Agent Use Only Example Summary HOW TLC WITH EXTENSION OF BENEFITS WORKS (hypothetical example) CLIENT PAYSTOTAL LTC BENEFITS BENEFITS PAID MONTHLY FOR 6 YEARS PLUS GUARANTEED DEATH BENEFITS $100,000 Initial Premium $695,622 Total LTC Benefit Maximum Monthly Benefit = Total LTC Benefit ÷ 72 Months Death Benefits would be any specified amount NOT used for LTC $231,874 Specified Amount $463,748 Extension of Benefits If the client doesn’t need LTC benefits, the specified amount (accelerated benefit) would be paid as a death benefit If the client’s monthly benefits are less than the maximum, the benefit payout period could last longer than 72 months YEAR 1 $9,661 per month YEAR 2 $9,661 per month YEAR 6 $8,334 per month YEAR 3 $9,661 per month YEAR 4 $9,661 per month YEAR 5 $9,661 per month + ______ $23,187 Or if specified amount is exhausted, Residual Death Benefit Hypothetical example assumes 4.8% crediting rate

16 15 Total Living Coverage SM For Producer/Agent Use Only TLC Key Advantages in Review No principal risk with Return of Premium Benefit Residual Death Benefit Preferred Health and Couples Discounts Optional Inflation Protection – 3% or 5% S or C Waiver of Monthly Deductions when on claim Guaranteed Minimum Benefits One-time Elimination Period – 0 day for Home Care International Coverage Privileged Care ® Coordination Services

17 16 Total Living Coverage SM For Producer/Agent Use Only TLC Specifications

18 17 Total Living Coverage SM For Producer/Agent Use Only Basic Information Issue Ages – –Age nearest birthday Back dating the policy effective date is not permitted. Maturity Age –None – policy benefits and all riders continue after the insured reaches age 100 –Interest continues to be credited to policy values –Monthly deductions cease at age 100 Interest Rate –Guaranteed to never be less than 3.5 percent

19 18 Total Living Coverage SM For Producer/Agent Use Only Residual Death Benefit If the entire specified amount is used to pay long term care expenses, TLC still provides a death benefit equal to the lesser of –10% of the initial specified amount less 10% of any policy loan balance and partial withdrawals Or –$25,000 less 10% of any policy loan balance and partial withdrawals

20 19 Total Living Coverage SM For Producer/Agent Use Only Long Term Care Benefits Benefit Triggers: –Cannot perform two of the ADLs (activities of daily living): BathingDressing EatingContinence ToiletingTransferring –Or has a significant cognitive impairment Alzheimer’s disease Dementia, –Satisfies the Elimination Period 0 days for Home Care benefits 90 days for Facility Care benefits (one time)

21 20 Total Living Coverage SM For Producer/Agent Use Only LTC Benefits: Types of Covered Care Facility Care –Nursing homes –Assisted living facilities –Reserves bed for up to 60 days per year during temporary absences Home Care –Home aides –Personal care services –Homemaker and chore services –Adult day care –Hospice care –Skilled care from nurses and physical, occupational, respiratory, and speech therapists Policyowner may direct the benefit payments to the service provider

22 21 Total Living Coverage SM For Producer/Agent Use Only Elimination Period – LTC Benefits 0 days for Home Care benefits 90 days for Facility Care benefits –Reduced by any days home care benefits are paid –Do not have to be consecutive and can be accumulated –Needs to be satisfied only one time

23 22 Total Living Coverage SM For Producer/Agent Use Only Long Term Care Benefits Privileged Care Coordinator Services: –Available at no cost to policyowner –Assess needs/develop plan of care –Assist with initial claims paperwork –Identify options –Locate services available in the community

24 23 Total Living Coverage SM For Producer/Agent Use Only TLC vs the competition Only linked benefit product with: Privileged Care Coordinator services Zero day elimination for home care Informal care benefits Multiple rate classes LTC preferred life & health discounts Couple discounts Complete Inflation options International coverage

25 24 Total Living Coverage SM For Producer/Agent Use Only TLC vs. MoneyGuard Guaranteed or GMBR? ROP - 15 year or lifetime? Elimination periods Care coordination services International coverage Lifetime benefits Multiple inflation protection choices

26 25 Total Living Coverage SM For Producer/Agent Use Only Review TLC Insurance Illustration 10 pages of NAIC compliant consumer information 1 signature page 1 supplemental page “How TLC Works” Remember, most TLC cases are money purchase….. It’s a find the money story. Find the money, make sure it’s the right kind of money and then change the address on the money. It’s not about the “right amount of money”, but rather the “right kind of money”. Leverage is leverage. More is better!

27 26 Total Living Coverage SM For Producer/Agent Use Only Underwriting Client Assessment Tax Information Writing TLC Business

28 27 Total Living Coverage SM For Producer/Agent Use Only Underwriting Classifications Preferred No Nicotine – PNN Standard No Nicotine – SNN Standard Nicotine – SNU Substandard –Life 16 tables and temporary and permanent flat extras May limit ABR/EBR periods No Nicotine Use Excludes Use of Nicotine and Nicotine Substitutes.

29 28 Total Living Coverage SM For Producer/Agent Use Only Underwriting - TLC vs simplified Significantly higher benefit pools (Life & LTC) when case is fully developed Full underwriting favors the client Preferred risk applicants get preferred rates Marginal risk applicants less likely to be declined

30 29 Total Living Coverage SM For Producer/Agent Use Only Underwriting Requirements

31 30 Total Living Coverage SM For Producer/Agent Use Only Underwriting - ExpressApp Available to selected BGA’s in Q4, 2008 Promotes ease in doing business 1 page TLC ExpressApp Request Ticket Optional …. with or without voice signatures “What to Expect During the TLC ExpressApp Process”

32 31 Total Living Coverage SM For Producer/Agent Use Only Tax Information Death benefit is generally income tax-free to the beneficiary Long term care benefit payments are not taxable income For federal income-tax years beginning after 12/31/2009, monthly deductions for long term care insurance are not subject to income tax but reduce income-tax basis. For federal income-tax years beginning before 01/01/2010, monthly deductions for long term care are taxable to the extent that they are deducted from gain and only reduce basis after gain is reduced to zero.

33 32 Total Living Coverage SM For Producer/Agent Use Only Client Assessment Can perform the ADLs Can perform the IADLs (instrumental activities of daily living) –Handling finances, housework, laundry, meal preparation, shopping, taking medications, mobility, transportation Able to function without assistance from another person Doesn’t use mechanical devices –Examples: walker, wheelchair, oxygen, dialysis, etc. No signs of memory loss, confusion or forgetfulness All acceptable medical conditions are stable and well controlled, not severe, debilitating or progressive –Unstable condition is one in the process of a medical work-up, anticipating surgery, or in physical therapy. Pre-existing conditions –All pre-existing conditions disclosed during the application process are covered after coverage is approved.

34 33 Total Living Coverage SM For Producer/Agent Use Only TLC Sales Aids For consumers For producers

35 34 Total Living Coverage SM For Producer/Agent Use Only Marketing TLC Sales Support –Visit URL (http://www.bulletinarchives.com/TLC/index.htm) –Dedicated team of external and internal wholesalers –866 4 GNW TLC ( ) Sales Tools Product Overview and Guide (consumers) Agent resources Product Guide Competitive Comparison Underwriting Guide Prospecting Letters (consumers) Seminar (consumers)

36 35 Total Living Coverage SM For Producer/Agent Use Only Summary State-of-the-art linked benefit product –Client maintains control of retirement assets while addressing the transfer of assets to the next generation and potential long term care needs –Underwritten by Genworth Life Insurance Company, rated A+ by A.M. Best Company –Nation’s leading long term care insurance provider Key advantages –Robust Long Term Care Benefits –Extension of Benefits –Return of Premium Rider –Residual Death Benefit –Discounts –Inflation Protection Options –Waiver of Monthly Deduction –Guaranteed Minimum Benefit –Elimination Period –International Coverage With TLC, you can help your clients plan today so they can enjoy tomorrow.

37 36 Total Living Coverage SM For Producer/Agent Use Only Call to Action – 90 day Business Plan Review TLC sales & marketing materials Identify your best 3 “client” prospects Complete TLC Client Profile and fax/ to Keith Bercun or Ed Harris If insurable, purchase TLC for yourself and/or your spouse Discuss marketing plan and revenue potential with Ed Harris 4 applications X $80,000 = $320,000 premium $320,000 8% commission = $25,600 gross revenue Evaluate results 90 days later Thank you for taking the time to help your clients protect their financial goals.

38 37 Total Living Coverage SM For Producer/Agent Use Only Important Information Total Living Coverage SM universal life insurance with long term care benefits is subject to the terms, issue limitations and conditions of Policy Form No. ULPLTCIPLGLI (11/05) et al. and Rider Form Nos. ULRABRIPGLI (11/05) et al., ULREBRIPGLI (11/05) et al., ULRROPIPGLI (11/05) et al. and ULRGMBRIPGLI (11/05) et al. Policy, benefits and riders may not all be available in all states. Terms and conditions may vary by state. Genworth Life is rated A+ (Superior) by A.M. Best, the second highest of sixteen ratings. This rating represents the opinion of A.M. Best of the insurer's financial strength and ability to meet ongoing obligations to policyholders and is not an implied warranty of the company's ability to meet its financial obligations. Rating is current as of 3/1/06. Genworth Life is a member of the Insurance Marketplace Standards Association (IMSA). Membership promotes ethical market conduct for individual life insurance and annuity companies. Insurance and annuity products: Are not deposits Are not insured by the FDIC or any other federal government agency Are not guaranteed by a bank or its affiliates May decrease in value

39 38 Total Living Coverage SM For Producer/Agent Use Only Which option fits your plan? Government programs Self-insuring Traditional long-term care insurance Total Living Coverage

40 39 Total Living Coverage SM For Producer/Agent Use Only


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