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The Genworth CLTC Sales Model Making Long Term Care Sales SIMPLE Presented by: Robert Burke, RVP Genworth LTC.

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Presentation on theme: "The Genworth CLTC Sales Model Making Long Term Care Sales SIMPLE Presented by: Robert Burke, RVP Genworth LTC."— Presentation transcript:

1 The Genworth CLTC Sales Model Making Long Term Care Sales SIMPLE Presented by: Robert Burke, RVP Genworth LTC

2 Lets make this Simple… S ee the Client S ee the Client I mpart the Risk I mpart the Risk M ake a Plan M ake a Plan P resent the Plan P resent the Plan L ook at Benefits L ook at Benefits E xamine Underwriting E xamine Underwriting

3 See the Client In a 2004 LIMRA study of buyers and non buyers In a 2004 LIMRA study of buyers and non buyers Only 30 % of the people who received info in the mail used it in combination with other info to buy LTCI Only 30 % of the people who received info in the mail used it in combination with other info to buy LTCI Another 53% who received info by mail decided not to buy Another 53% who received info by mail decided not to buy The remaining 17% were still deciding. The remaining 17% were still deciding.

4 Impart the risk

5 1. It must be established beyond a reasonable doubt that the client believes he may live a long life and when he does he may need care. 2. It must be established beyond reasonable doubt that the client understands the impact providing care will have on his family and best thought out retirement plan. This allows for the drafting of a plan. 3. It must be established beyond a reasonable doubt that nothing will pay for that plan except LTCi Establishing a plan for long-term care: The 3-step process…

6 Step One: Establishing beyond a reasonable doubt that the client may live a long life and very well may need care.

7 Believes they will live a long life Believes they will live a long life Period Period Your clients believe they will live a long life also. That’s why they make you promise not to outlive their life savings Your clients believe they will live a long life also. That’s why they make you promise not to outlive their life savings Everyone in this room…

8 When you don’t die… You live You live When you live, you get old When you live, you get old When you get old you get frail When you get old you get frail When you get frail you get sick and need care When you get frail you get sick and need care

9 If the client argues this point there can be no possibility of putting together a plan for care and protecting it with LTCi…

10 Leave immediately

11 Step 2: Establishing beyond a reasonable doubt that long-term care is a family issue therefore requiring a plan to protect the family…

12 Why do people buy Long Term Care Insurance?

13 New thinking… Long-term care has nothing to do with your client…

14 The question is not who will take care of your client, his family will, but rather what providing that care will do to his family and finances The question is not who will take care of your client, his family will, but rather what providing that care will do to his family and finances Families provide the majority of care. “Family” is defined as children which often means the daughter Families provide the majority of care. “Family” is defined as children which often means the daughter Caregiver stress results in severe tension between the siblings because the responsibility is not shared equally Caregiver stress results in severe tension between the siblings because the responsibility is not shared equally Long-term care rarely brings families together, it tears them apart Long-term care rarely brings families together, it tears them apart It’s a family issue…

15 LTCi never replaces what families do. Rather it builds on an existing infrastructure of support thus allowing the caregivers to provide the care better and longer

16 Children don’t want to take care of their parents but will because they love them and are concerned for their safety Children don’t want to take care of their parents but will because they love them and are concerned for their safety Suggesting that they will provide care if necessary only reinforces your credibility and allows for a discussion of what LTCi really does… Suggesting that they will provide care if necessary only reinforces your credibility and allows for a discussion of what LTCi really does… It allows them to provide the care better and longer by paying for the type of services children find the most embarrassing and difficult to perform It allows them to provide the care better and longer by paying for the type of services children find the most embarrassing and difficult to perform What the professional has just done is get the children off the hook and turned them into proponents of LTCi. Many will even pay for the cost What the professional has just done is get the children off the hook and turned them into proponents of LTCi. Many will even pay for the cost

17 Step 3: Establishing beyond a reasonable doubt that nothing will pay to protect that plan except LTCi

18 “You have made it clear that the principal must be preserved because of the possibility of something happening in the future.” “We will use those assets to generate sufficient income at retirement. When combined with social security and pension benefits, it will allow you to sustain your pre-retirement lifestyle as well as keep prior financial commitments.”

19 Up till now those assets have been protected by insurance which allows them to be available for retirement…

20 Ex) $750,000 Ex) $750,000 Home, Car, Cabin, Stocks, Bonds, Life Insurance Cash Value, Annuities Home, Car, Cabin, Stocks, Bonds, Life Insurance Cash Value, Annuities Homeowners Insurance Auto Health Long Term Care Good Health LIFE

21 You’ve allocated assets and created income for retirement…

22 What income or assets have you allocated to pay for long-term care?

23 Not doing so means the client has to rely on a government program or use retirement funds to pay for care

24 Step Three – Funding Options - or Are They? Medicare - Health Ins. For: Medicare - Health Ins. For: Skilled Care Skilled Care Rehabilitative Services Rehabilitative Services Skilled Home Care Skilled Home Care Will Medicare Pay for Custodial Care? Will Medicare Pay for Custodial Care? Home Care: No Home Care: No Adult Day Care:No Adult Day Care:No Assisted Care Living:No Assisted Care Living:No Nursing Home Care:* Nursing Home Care:* * A Portion up to 100 Days of Care and Only for Skilled or Rehab Services * A Portion up to 100 Days of Care and Only for Skilled or Rehab Services Medicaid: Health Ins. Program Based on Financial Need Medicaid: Health Ins. Program Based on Financial Need Will Medicaid Pay for Custodial Care? Will Medicaid Pay for Custodial Care? Home Care: *Yes Home Care: *Yes Adult Day Care:*No Adult Day Care:*No Assisted Care Living:*No Assisted Care Living:*No Skilled Nursing Home:Yes Skilled Nursing Home:Yes * Most States Have a Home and Community Based Program That Makes Limited Funds Available to Keep People in the Community. Services Are Linked and Accompanied by Long Waits. No Elder Law Attorney Will Tell a Client That This Program Is a Viable Way to Pay for Care.

25 “I’m a Veteran. The VA Will Pay for My Care…” “I’m a Veteran. The VA Will Pay for My Care…” The VA will only cover 100% of your expenses if the cause of your care need is directly related to a service injury The VA will only cover 100% of your expenses if the cause of your care need is directly related to a service injury In 2001, the Federal Long Term Care Insurance Program Was Launched, Recognizing That the VA Does Not Offer Comprehensive Long Term Care to Most Beneficiaries In 2001, the Federal Long Term Care Insurance Program Was Launched, Recognizing That the VA Does Not Offer Comprehensive Long Term Care to Most Beneficiaries ¹ GAO Report: VA Health Care: Better Data Needed to Effectively Use Limited Nursing Home Resources, Hrd-97-27, 1996 Step Three – Funding Options?

26 Self funding the cost of long-term care…

27 “I read in Consumer Reports that my clients don’t need LTCI if they have $1,000,000 or more”

28 I Have $1,000,000 Income for remaining Spouse Income for remaining Spouse Find Nurses Find Nurses Hire Nursing Assistants Hire Nursing Assistants Schedule House Cleaning Schedule House Cleaning Buy Groceries Buy Groceries Cook Meals Cook Meals Schedule and transport to adult daycare Schedule and transport to adult daycare Install a ramp and grab bars, widen doorways, buy a hospital bed Install a ramp and grab bars, widen doorways, buy a hospital bed I Have $500,000 Income for remaining Spouse Income for remaining Spouse Find Nurses Find Nurses Hire Nursing Assistants Hire Nursing Assistants Schedule House Cleaning Schedule House Cleaning Buy Groceries Buy Groceries Cook Meals Cook Meals Schedule and transport to adult daycare Schedule and transport to adult daycare Install a ramp and grab bars, widen doorways, buy a hospital bed Install a ramp and grab bars, widen doorways, buy a hospital bed

29 Please don’t confuse having money with getting old, getting sick, and needing care. They are really two completely different things

30 “I’ll give my money to my kids.”

31 In the final analysis LTCI, like any other type of insurance protects a plan. In this case it allows your client’s retirement plan to execute for the purpose for which it was intended: Retirement, not paying for long-term care

32 Make a Plan (Plan design rules) 1. Buy what you know 1. Insure 80% of the cost of a Nursing Home 2. Buy Compound Inflation Protection for clients under 70 3. Buy best home care available 4. Zero Day Home Care Benefit is a must

33 Benefit Analysis Benefit type Average stay Nursing Home 1079 Days Assisted Living 721 Days Home Health Care 523 Days % of claims 11.2 % 10.6 % 77.9%

34 1. Buy what you know Insure 80% of the cost of a Nursing Home Insure 80% of the cost of a Nursing Home Buy Compound Inflation Protection for clients under 70 Buy Compound Inflation Protection for clients under 70 Buy best home care available Buy best home care available Zero Day Home Care Benefit is a must Zero Day Home Care Benefit is a must 2. Buy as much of what you don’t know as you can afford Make a Plan (Plan design rules)

35 Present the Plan (Privileged Choice Shared) 44 8 6 6  Built-in Joint Waiver of Premium  Built-in Survivorship Benefit  No Claims Offset Compounding

36 No Claims Offset Compounding

37 Without Claims vs. With Claims Benefits May Last Longer with Privileged Choice ® Benefits May Last Longer with Privileged Choice ® Not Reduced by Claims Paid Not Reduced by Claims Paid This example assumes 100% of the monthly maximum benefit is paid continuously until all benefits exhausted.

38 Present the Plan (Privileged Choice Shared) 44 8 6 6  Built-in Joint Waiver of Premium  Built-in Survivorship Benefit  No Claims Offset Compounding 10 4

39 By the Way….. Standard Health Apples to Apples Benefits Husband and Wife Same Age Monthly Benefit: $4500, 90 days-Zero Day Elim Home Care, Compound AgeGenworth 8 YR Genworth 10 YR Met VIP II John Hancock 50$3150$3,420$5,002$4,088 55$3,330$3,600$5,418$4,438 60$4,140$4,680$6,836$5,419 65$5,580$6,390$9,166$6,802

40 Simplicity of Story Simplicity of Plan Design

41 Look at Benefits Nursing Home Nursing Home Assisted Living Assisted Living Home Health Care Home Health Care

42 Facility Choices for Aging Relatives Assisted living facilities: Residential care setting with minimal care needs Skilled nursing facility: Medical and substantial physical care needs Alzheimer’s facilities: Specialized care Hospice care: In home or facility-based Bed reservation benefit Bed reservation benefit

43 Not just for Nursing Home Care: Nurses, Nursing Assistants and Therapists Nurses, Nursing Assistants and Therapists Informal Caregivers Informal Caregivers Homemaker/Chore Services Homemaker/Chore Services Assistance with shopping, housekeeping, chore services and meal preparation Assistance with shopping, housekeeping, chore services and meal preparation Home modifications Home modifications Adult Day Care and Hospice Adult Day Care and Hospice Alternative Plan of Care Alternative Plan of Care Today’s long term care insurance is more than nursing home care coverage; it can also cover you in your home and community, using benefits such as: *These services not available in all states.

44 Additional Features To Look For Monthly Benefit Waiver of Premium International Coverage Survivorship benefit Couples, good health discount Care Coordination

45 The Care Coordinator Provides the Plan of Care Counseling Monitoring of On-going Services Care Referral Coordination With Providers Is a Licensed Health Care Practitioner (LHCP) Coordination With Free Services Care Coordinator

46 Examine Underwriting Set a Timetable Set a Timetable Today we will do an application Today we will do an application The company may request medical records or health interviews The company may request medical records or health interviews Once a policy is issued we will sit back down and make the final evaluation of putting this plan in place Once a policy is issued we will sit back down and make the final evaluation of putting this plan in place At that time you will have 30 days to free look the policy At that time you will have 30 days to free look the policy

47 So lets make this Simple… S ee the Client S ee the Client I mpart the Risk I mpart the Risk M ake a Plan M ake a Plan P resent the Plan P resent the Plan L ook at Benefits L ook at Benefits E xamine Underwriting E xamine Underwriting

48 Selling to Younger Couples (Sales idea of the day)

49 Aging Demographic 1990 2005 MaleFemale Population by Age and Sex: 1990 and 2000 12 10 886644220 Age 100+ 95-99 90-94 85-89 80-84 75-79 70-74 65-69 60-64 55-59 50-54 45-49 40-44 35-39 30-34 25-29 20-24 15-19 10-14 5-9 Long Term Care “Sweetspot”

50 “It’s Not Affordable” Forbes Study 1 Indicates Prices Consumers Are Willing to Pay For Long Term Care Insurance: Ages 40-49:$1,000 Ages 50-59:$1,305 Ages 60-74:$2,100 Price Points Maximize Willingness to Buy 1. Forbes Consulting Group, January, 2005

51 What We Have Learned 1. Long-Term Care Claims - Milliman, April, 2005 2. Claims Utilization Data - Genworth Financial Benefit Exhaustion Benefit Period % Exhausting Benefits For Policies With 3-year Benefit Period, Only 8 in 100 Claimants Exhausted Their Benefits 1 For Policies With 3-year Benefit Period, Only 8 in 100 Claimants Exhausted Their Benefits 1 Consider Alzheimer’s Family History Consider Alzheimer’s Family History Daily Benefit Utilization Benefit Type % Daily Benefit Max Used On Average, Our Claimants Utilized 55% of a Daily Benefit Maximum for Home Health Care 2 On Average, Our Claimants Utilized 55% of a Daily Benefit Maximum for Home Health Care 2 NH = Nursing Home ALF = Assisted Living Facility HHC = Home Health Care

52 2 Strategies for Plan Design Stack the Coverage Buy a first chunk today based on affordability with the Implicit understanding that a second policy will be necessary to offer adequate coverage in retirement Buy a first chunk today based on affordability with the Implicit understanding that a second policy will be necessary to offer adequate coverage in retirement Plan purchase of second policy when offer as a group at your employment or near retirement when income and retirement expense estimates are more accurate Plan purchase of second policy when offer as a group at your employment or near retirement when income and retirement expense estimates are more accurate Buying a quality individual policy first gives the client the Cadillac in the garage and makes the Ford more of a utility plan Buying a quality individual policy first gives the client the Cadillac in the garage and makes the Ford more of a utility plan One and Done Buy what you need and what you can all at once based on affordability Buy what you need and what you can all at once based on affordability Use with current or near-retirement people who know or have a fairly good idea what their income will be during retirement Use with current or near-retirement people who know or have a fairly good idea what their income will be during retirement

53 Value of early retirement planning Stacking Coverage Stacking allows this to only consume 4.2% of the retirement income Stacking allows this to only consume 4.2% of the retirement income $70,000 Annual Income $1488 1 st Premium $1452 2nd Premium 1 st policy bought at 45- 4yr, $3000 MB 1 st policy bought at 45- 4yr, $3000 MB 2 nd policy bought at 65 – 4 yr $1,500 MB 2 nd policy bought at 65 – 4 yr $1,500 MB Goal: 4 yrs of coverage $9,000 MB at retirement (65) from age 45 starting today Waiting to Buy at Retirement Single policy purchase will consume 12.5% of the retirement income. Single policy purchase will consume 12.5% of the retirement income. $70,000 Annual Income $8,712 Annual Premium 1 policy bought at 65- 4yr, $9,000 MB 1 policy bought at 65- 4yr, $9,000 MB

54 1. In the end your plan should cover about 80% of the average NH cost in their area – Stacking allows us to catch up or slack off 2. Look at home care desire and position the first policy as the Quality Home Care with Informal Care giving and Quality Care Coordination Benefits 3. Always utilize Compound Inflation with this group Overview Plan Design Parameters Buy What We Know Buying what you don’t know 1.Consider utilizing experience supports of 3 or 4 -Year Product 2.Consider Smaller Shared to cover 1 st risk with Cadillac coverage knowing the assets are there for the 2 nd spouse Use Simplicity & Affordability To Help Grow Your Business


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