CLTC Objection Handling Webinar Presented by CLTC

1. CLTC Objection Handling Webinar Presented by CLTC www.ltc-cltc.com 1

2. Presented By: D. Corey Rieck, MBA, CLTC On Behalf of CLTC 2

3. Results to be achieved today • What kind of client/prospect do you have? • Handling Funding responsibility related issues. • Handling the “I’ll take care of mom..” issue. • Handling the “Government will take care of me” issue... • Handling the “My family will take care of me response.” • Handling the “I’ll shoot myself” response 3

4. Results to be achieved today • Handling the “I’m already covered” response. • System of follow-up for late adopters • Properly setting Underwriting Expectations • Using your experience • Bonus: • CLTC Grad Benefits/Overview of Appendix 8 and Appendix 9 included on this PPT for your further assistance. 4

5. Introduction • Introduction of D. Corey Rieck, MBA, CLTC • Personal Experience; the translation of which can help your clients understand the need and urgency of proper LTC planning. • CLTC Instructor since 2003 • Personal Producer since 1999 5

6. Introduction 6

7. Need any further proof.. • The Long Term Care Issue and its associated challenges can present themselves to you and your family at any time and acts independently of age: • Mom—45—M.S. Diagnosis • Dad----70—Esophageal Cancer Diagnosis • Jackie—19 mos. Neuroblastoma Diagnosis • Grandfather—85 Yrs old CLL Diagnosis 7

8. Your Experience • Do you consider it important to have your clients/prospects know who you are and what your personal experience is? • Shouldn’t they know who they’re doing business with? • 4 Steps • Who are you? • Who do you work for? • What will you accomplish? 8

9. Your Experience • Have you personally had the LTC Experience? • How do you help people understand what it could mean? • Two Kinds of clients/prospects..how best to classify? • Use your experience to educate and gain the upper hand. • No one can take your experience away or dispute. 9

10. Handle the objections before they become objections • Have you personally had the LTC Experience? • How do you help people understand what it could mean? • Two Kinds of clients/prospects..how best to classify? • Shouldn’t you tell them what it means if they take your advice... • If they don’t take your advice? • Carrier Cost Surveys and their role 10

11. Set the expectation that no one is funding this but you... • Right Now, there are 35 million people in the U.S. that are 65 years of age or older, and in 20 years, that number is projected to triple. • Medicare changes, Medicaid changes, Federal LTC program implementation, Partnership Programs... • Got time to discuss the Budget? 11

12. Access the specialized knowledge • Do I personally do what is necessary to become the Long Term Care Expert or do I just partner with one and split the case accordingly? 12

13. Education • How come we haven’t helped more people with Long Term Care Planning? • 8%---10% penetration currently • Roughly 300 million people live in the U.S. • Maybe it was the way we positioned the product? 13

14. Prior to CLTC we... 14

15. Education/Expectation Setting • Using statistics to open up a conversation • Selling fear • “Disturbing” • Showing pictures of burning buildings • Using “Risk” to help sell this • Talking about all of the choices someone will have with LTC : (Home Care, ACLF, NH, ADC) 15

16. Education/Expectation Setting • “How would changing your parent’s diaper make you feel?” • LTCI is about protecting assets • Often sold by arguing or debating with clients • Often sold to individuals • Often just a product push • Inadequately handling client objections 16

17. The “Old Way” • How did we handle these objections/myths? • “I’ll take care of mom.” • “It’s that nursing home stuff.” • “I’m already covered.” • “The Government will take care of me.” • “My Family will take care of me.” • “I can self fund.” • “It’ll never happen to me.” 17

18. The “Old Way” • How did we handle these objections/myths? • “I’m covered under my Health Insurance.” • “I’m covered under my Disability Income.” • “I’m never going to a nursing home.” • “The government paid for my______, so that means they will pay for me.” • “I’ll put a gun in my mouth.” 18

19. The “Old Way” • How did we do using these techniques? • Inadequate LTC education • Inadequate expectation setting • The reputation of the product • Less than stellar delivery of the product • “You know…there is a 1 in 2 chance you might need this……” 19

20. The “Old Way” • Don’t clients think the worst is always going to happen to someone else? • Risk remains constant in a clients mind, what often doesn’t remain constant are responsibilities • Risk implies chance…chance implies odds, and everyone is going to beat the odds… 20

21. The “Old Way” • Did you think the Bellagio got built by people beating the odds? 21

22. Expectation Setting • How many of you have had to participate or otherwise manage care directly in an LTC situation? • Was there/were there: • Assets allocated for this issue? • If not, who or what paid for the care? • Geography involved? • Siblings involved? 22

23. Expectation Setting • Did your relationship with your siblings change as a result? • What effect, if any did it have on all involved emotionally, physically? • How did it affect your lifestyle? • Your career? • Your relationship with your spouse? • If you have had both experiences, (I.e. managing the care directly or managing remotely, which do you prefer?) 23

24. Expectation Setting • How many of you have sold an LTC Policy? • Do you own it yourselves? • Have clients asked: “What have you personally done about this?” • If you haven’t completed this; what is your response? • Clients may tell you..”Do for me what you did for yourself…” 24

25. Expectation Setting • The way to avoid an argument with a client is not to get into it in the first place. • Use the CLTC 3 step process • Ask open ended questions • Don’t batter your client with statistics 25

26. Two Kinds of Clients • Type I/Track I Client: • Those that have had the LTC Experience and are aware of the issues and associated challenges involved…. • Ask the question..”What does Long Term Care mean to you?” • A client that has had the experience will most likely relate their experience to you. 26

27. Two Kinds of Clients • Type I/Track I Client: • Ask the follow-up questions: • “Were there resources allocated to pay for LTC?” • “If so, how?” • “If not, what paid for it? Who paid for it?” • “Were there siblings involved?” 27

28. Two Kinds of Clients • Type I/Track I Client: • Ask the follow-up questions: • “Did your relationship change with them as a result of your/their involvement?” • “Was there geography involved?” • “How was everyone’s lifestyle affected as a result?” 28

29. Two Kinds of Clients • Type II/Track II Client: • Those that are willing to take the next logical step in financial planning • You maybe have helped these clients with other financial planning issues • They have shown a prior logic pattern of financial planning 29

30. Two Kinds of Clients • Type II/Track II Client: • Asset & Asset Protection • Income Portfolio Portfolio • Income Disability Income • Family Life Insurance • Wealth More Life Ins. • 401K/IRA/Annuities ??????? 30

31. Two Kinds of Clients • “Listen..over the years, I’ve helped you protect your income with Disability Income, your family with Life insurance, your wealth with more life insurance, and I have helped you accumulate these assets..one thing we need to address is protecting your assets (I.e. 401K, IRA, etc) so they can execute for the manner in which their intended.” 31

32. Two Kinds of Clients • Isn’t this a little different than the old way of: “You know…there is a 1 in 2 chance that you will need to go to a nursing home.” • Less threatening • Less awkward • Less off-putting • Creates the opportunity for an interview 32

33. Two Kinds of Clients • Proper Long Term Care Planning protects Assets. Assets produce Income. Income produces lifestyle. • If clients do not plan for the LTC issue and its associated challenges properly, their lifestyle, relationships, assets and income are at risk; not to mention their entire financial plan. 33

34. Education and Expectation Setting • Longevity • What used to kill us doesn’t necessarily do so anymore • Life Expectancy Progression • Medical Advancements • Clients taking better care of themselves • Translation? 34

35. Who is your biggest competitor? • Is it the independent agent down the street? • The Career Genworth LTC Agent? • The Mass Mutual, New York Life or Northwestern or Banker’s Life Agent? • The CFP or Wachovia Securities or Edward Jones Financial Advisor? • The Raymond James Representative? 35

36. Who is your biggest competitor? • No. These are not your competition for LTC. • Your competition is your/our clients/prospects thinking that someone else or something else will pay for their Long Term Care. 36

37. Who is your biggest competitor? • What messages have the Federal Government sent us over the years? • Medicare Reform • Medicaid Reform • DRA • Own Your Future Campaigns • Federal LTC Program • Partnership Plans 37

38. Who is your biggest competitor? • Medicare Reform: (messages) • Prospective Payment System implemented in early 80’s • Patients discharged “Sicker and quicker” • Movement from Fee for Service to Flat Fee • Balanced Budget Act of 1997 (BBA 97) which took effect 1.1.98 • Removed any meaningful LTC reimbursement for custodial care 38

39. Who is your biggest competitor? • Medicare Reform: (messages) • Medicare reimbursed NH stays went from an average of 50 days to 14-21 days as a result • Your client may tell you…”Medicare will pay for me…You’ll tell them…No it won’t.” 39

40. Who is your biggest competitor? • Medicare Reform: (messages) • Your client or prospect may tell you…”Medicare paid for my _____;”---ask them when it was. If it was prior to 1.1.98 (prior to BBA of 97) then there is a good chance that Medicare did pay for the LTC of the person involved. 40

41. Who is your biggest competitor? • Medicaid Reform: (messages) • Open to state interpretation; Individualized by State • Effect on artificial impoverishment/Medicaid Planning 41

42. Who is your biggest competitor? • DRA (Deficit Reduction Act) • New Home Equity Limits that can effect eligibility for Medicaid • Look Back Period Adjustment on transfers from 3 years to 5 years • Effect on CCRC Entrance Fees as it relates to Medicaid spend down (considered available) 42

43. Deficit Reduction Act of 2005 In 2005 Congress passed the DRA-effective February 8, 2006 Legislation contained provisions affecting Medicaid Changes regarding exemption Assets Annuities Home Equity Ownership Elimination of prior restrictions on the expansion of Partnership Programs Any state can now implement a Partnership Program insurancestudy.com insurancestudy.com 43

44. Major Areas of LTC Reform in the DRA Look-back period Transfer for penalty start date Undue hardship exception Treatment of annuities Community spouse income rules Home equity limits Treatment of investments for CCRCS Promissory notes and life estates State long-term care partnership programs insurancestudy.com 44

45. Own Your Future Campaigns Pre-cursor in a lot of states to Partnership Programs What did your state do? insurancestudy.com insurancestudy.com 45

46. The Federal Long Term Care Program • Implemented by John Hancock and MetLife in 2001 for the Federal Government and their some 38,000 employees; they formed a company, Long Term Care Partners, LLC • www.ltcfeds.com 46

47. The Federal Long Term Care Program • Main LTC Planning Metric Limits: • DBA: $50---$300 • Inflation: 5% Compound, FPO • Benefit Period: 3 Yr, 5 Yr Unlimited • Elimination Period: 30 or 90 Days • Days of Service 47

48. Partnership Plans • Created to reduce consumers fear of impoverishment due to Long Term Care and its associated consequences. • Created with funding from the Robert Wood Johnson Foundation in the mid-1980’s. • Shared partnership between individual states, and federal government. • Originally, cases had to be written on separate Partnership Paper. 48

49. Partnership Plans • The concept of these Partnership LTC Policies is simple: • If you get a client to buy a Partnership benefit pool, and the client then goes on claim and completely exhausts that benefit pool and then subsequently applies for Medicaid, then the amount of the benefit pool (that has just been exhausted) is exempt from Medicaid spend down. 49

50. Partnership Plans • Two Regimes: • Regime I: • California • New York • Indiana • Conneticut 50