Why Financial Advisors Need to Address Long-Term Care Planning

Transcription

1 IFP Insurance Group, a division of Independent Financial Partners Why Financial Advisors Need to Address Long-Term Care Planning Steve Cain Principal National Sales Leader (877)

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

3 Discussion Items Retirement Planning and Healthcare LTC Insurance Industry Update Conversation Starters Traditional and linked-benefits review LTCI Partners Support

4 2013. ALL RIGHTS RESERVED.

5 The Reality of Long-Term Care Fewer than 3% of American adults have purchased a long-term care insurance policy 1 The 85+ population is projected to increase from 5.7 million in 2011 to 14.1 million in One in eight people age 65 and older (13%) has Alzheimer s disease 3 At least 70 percent of people over age 65 require some type of LTC in their lifetime 4 1 May 06, 2013 Mary Pickett, M.D., Faculty Editor, Harvard Health Publicationshttp:// 2 Department of Health & Human Services, A Profile of Older Americans Alzheimer's Disease Facts and Figures Medicare & You, National Medicare Handbook, Center for Medicare and Medicaid Services

6 Three Risks To Client s Financial Futures

7 Important Long-Term Care Questions

8 Risk Management Strategies

9 LTC Planning: A Three Step Process

10 LTC Planning Options

11 Multiple Solutions Standalone LTC Linked Benefit (Life/LTC) LTC Rider Chronic Illness Rider Tax Code: 7702B Tax Code: Life Portion - 101a1 LTC Portion - 104a3 Tax Code: 7702B Tax Code: 101(g) LTC license required LTC license required LTC license required No license needed Indemnity or Reimbursement Reimbursement Indemnity or Reimbursement Indemnity Only Cost only overs LTC benefits Generally single premium that buys Life & LTC benefits (longer premium durations available with certain carriers) Additional up-front charge for rider Charge can be up-front or back-end ( discounted acceleration ) Total LTC benefit determined at issue Total LTC benefit determined at issue Total LTC benefit determined at issue LTC benefits may not determined until claim is made (depending on charge structure) Full Underwriting Most are Simplified Underwriting Some do not require additional underwriting b/c they are underwritten with life policy; others will require Full or Partial Underwriting Some do not require additional underwriting b/c they are underwritten with life policy; others will require Full or Partial Underwriting Qualifying Condition(s) can be Recoverable or Permanent Qualifying Condition(s) can be Recoverable or Permanent Qualifying Condition(s) can be Recoverable or Permanent Qualifying Condition(s) must be Permanent Do NOT offer any DB; Use it or Lose it Residual DB Some offer Residual DB Some offer Residual DB

12 Plan Design Considerations

13 Tips For Productive Conversations

14 Conversation Starters Build it into your financial plan: We have talked about everything Life Insurance, Mutual Funds, Annuities and 401(k) planning but we haven t talked about Long-Term Care. Without planning for extended healthcare, all of the good work we ve done is at risk. Let s get a specialist on the phone with us now to see if this coverage makes sense for you or not. Solve for the longevity problem: Living a long life is a near certainty these days (with advances in medicine, technology, diet and exercise) and planning for it has become a necessity. We need to make sure that you have a solid strategy to deal with a healthcare event in your retirement years. The cost of care can potentially wipe out all of the good planning we re doing. Use your own personal experiences: Recently, my family went through a Long-Term Care event. It s was hard on the family and I kept thinking about how we could have planned for this years ago with Long-Term Care Insurance, it would have saved us so much head & heartache. So I am making it my responsibility to tell all of my clients now to take a look at this coverage. I want to make sure that you have a plan to deal with Long-Term Care. Let s talk about how this coverage works and see if it makes sense for you or not.

15 Conversation Starters Talk to them about your own planning: I recently purchased Long-Term Care Insurance. Do you know what this is? I did it to get some peace of mind I know I m going to live a long life and I want to make sure my family is in good shape, financially and emotionally if they have to care for me down the road. I think this coverage might make sense for you. Can we looks at some strategies or numbers? Everyone s planning for this, so why shouldn t they? I don t know if you ve been thinking about this, but many of my clients have been talking to me about Long-Term Care. They ve been through it with their parents or loved ones and they are concerned about needing extended healthcare one day. It s tough on families and really expensive. That s why I ve been bringing it up to all of my clients your age. Let s see if this makes sense for you. Younger clients: Do you know if your parents have a long-term care plan in place? Odds are if they haven t planned for this yet, YOU are going to be their plan -- coordinating care, potentially providing or paying for that care. Nobody wants to think about the reality of needing help one day. I d be happy to help you and your parents put a plan in place to protect your family.

16 Conversation Starters It s Becoming an Issue: The last thing we need to cover today is Long-Term Care planning. We haven t talked much about it, but I m seeing more & more of my clients go through these situations whether it s with them personally or their parents. {insert firm name} has made a big push into educating clients and agents on this planning. Retirement Concerns: You know as I ve been meeting with clients, many of these share the same concerns about their retirement. Am I going to outlive my money? Will Medicare be there when I need it? What if I need Long-Term Care? How would be pay for it? Who would care for us and manage the care? Long-Term Care Insurance can help answer these questions and give you peace of mind. Direct Question: Do you own Long-Term Care Insurance? I think it s worth taking a look at this coverage many of my clients like you (or in a similar situation) have purchased recently. Risk Management Strategies: You know, we ve put together strategies to protect your family from health concerns, accidents, premature death but we haven t talked about protecting you from living a very long life. Long-Term Care planning is really important it can help protect your lifestyle and all of the retirement planning we re doing.

17 It s Time to Talk About Long-Term Care Concierge-level sales & marketing support on a multi-carrier platform Unbiased recommendations that will best meet your client s planning needs, whether that involves traditional LTC Insurance or hybrid products (Life Insurance with LTC Riders) Pre-sale support includes strategy discussions with advisors, custom plan design consultations, field underwriting or health pre-screening, virtual point-of-sale assistance (via client conference calls) Post-sale support -- tele-application fulfillment (we will complete the forms with clients on your behalf), in addition to new business processing and case management monitoring Traditional carriers offered on this platform are Genworth, John Hancock and Transamerica and Mutual of Omaha A Strategic Partner of IFP Insurance Services Toll-Free: (877)

18 Discussion Items ALL RIGHTS RESERVED.