The Main Planning Metrics of Long Term Care Planning Wednesday July 28, 2010D. Corey Rieck, MBA, CLTC
Certified in Long-Term Care Program www.ltc-cltc.com
Your Presenter: D. Corey Rieck, MBA, CLTC President, Founder, LTCcompass Phone: (678) 990-3664 Email: firstname.lastname@example.org Website: www.ltccompass.com
CLTC 2 Day Master Class Instructor since 2003 CLTC LTC Partnership Training Instructor since 2008 Thousands of agents trained since 2003 in the LTC arena Personal LTCI producer since 1999
Results to be achieved from today’s webinar: • How systematic, processed based LTC Education can help you as it relates to expectation setting • Educational Delivery • Obtain additional insight as to how to choose the LTC Planning Metrics • Daily Benefit Amount • Benefit Period
Results to be achieved from today’s webinar: • Obtain additional insight as to how to choose the LTC Planning Metrics: • Inflation • Claims Payment Options • Home Care Percentage options • Elimination Period
Results to be achieved from today’s webinar: • Case Design and Set up • A new way to consider LTC Planning • Co-insuring
Developing Your Process, the pertinent points, as taught by CLTC: (You pick the order) • Initial interview • Implementation • Second Interview • Outline of coverage and application • Producer’s Report • Explanation of the underwriting process
Developing Your Process, the pertinent points, as taught by CLTC: (You pick the order) • Application submission to the carrier • Explanation of the underwriting process • Underwriting verification • APS • Underwriting Decision • Policy Issue • Policy Delivery • State specific requirements
Systematic, Processed Based LTC Education/Assistance: • Education/Discovery • Underwriting/Expectation Setting • Implementation
Education: -Why is the client interested? -Objection handling/Adequate answers to their questions -Education as to planning metrics if applicable, or instruments
Discovery: • How do you determine if you can help the client after you have educated them? • Two step process or one step? • Are they insurable?
Discovery: • Underwriting: • 10 year medical history • 10 year surgical history • Medications • Underwriting differentiation
Discovery: • Framing the options they may have, based on what they tell you • Expectation setting • Commitment to the process if one person from a couple is uninsurable • Analogous to the Dentist’s “Full mouth x-ray and exam”
Credibility: • If your process is committed to paper, you can email it to the clients after your discussion. • Once you have done this, you can refer to it during your educational process. • If you have a website, you may post it there
If you can’t health qualify, what difference does the premium you would be willing to pay make?
Don’t get too caught up in the premium until underwriting is complete; keep the options open……
Underwriting/Expectation Setting: • Does the client present with significant or multiple medical issues? • Do you work with more than one carrier or instrument?
Underwriting/Expectation Setting: • Scenario: • Is your process committed to paper? • Tell the client what you are going to tell them • Tell them • Use your process that is committed to paper to tell them what you told them. • Refer to it during the process
Considerations: • What kind of client/prospect do you have? • Prior Experience with LTC? • Next Logical Step in Financial Planning? • Wealthy?
Considerations: • What kind of client/prospect do you have? • How do they present from an underwriting perspective? • What carriers make the most sense? • What instruments make the most sense? • Retail? • Wholesale?
How CLTC can help: • CLTC V 8 Text: • Appendix 7 Top 20 Prospects • Appendix 8 CLTC Planning Process workbook • Appendix 9 CLTC Client Interview Road map
How CLTC can help: Graduate Website Power Point Presentations One Page Tax Guide Ask The Experts
How CLTC can help: Have you shared with your client/prospect the CLTC 3 step process?
Decision Area I: Traditional Health Long Term Care? Asset Based Long Term Care? Carrier Considerations? Client pre-dispositions Wholesale/Retail Case
Two Kinds of Clients: • Those that have had the Long Term Care experience and had to deliver care on some level. • Those that make it more about the whole financial planning process.
Two Kinds of Clients: • Those that have had the Long Term Care experience and had to deliver care on some level. Who has had the experience? How it affects lifestyle, family interaction, money…
Car Home Family & kids Wealth (estate issues) Salary Retirement Portfolio Auto insurance Homeowners insurance Life & health insurance More life insurance DI insurance ? Asset & income Asset & income portfolio protection portfolio 74
Educational Delivery: A Timeline Process that may work for you
Applicable Underwriting Expectations: Why is this relevant? Steps/considerations Rocks in the river How underwriting could possibly affect the individual planning metrics
Planning Metric Number I: Daily Benefit Amount
Daily Benefit Amount : Considerations: -Health of the client? -Wealth of the client? -Are you helping a single person or a couple? -Which instrument? -Which carriers?
Long Term Care Planning Metric Number 1: Daily Benefit Amount(DBA) • Dollar Amount from $50--$500 • Study what the following costs are for your area: • Home Health Care: (Hourly) • Nursing Home (Daily) • Assisted Living (Monthly) • Geography is critical • Where do you live now? • More importantly, where will you live? • The more daily benefit you buy, the more premium you invest
Daily Benefit Amount : Considerations: -Geography: -where is your client living now? -where will your client live? -do they own multiple homes? -if so, where are they most likely receive care?
Daily Benefit Amount : Considerations: -Geography: -what if they want to live over seas?
Daily Benefit Amount : Considerations: -Carrier Surveys that discuss: -Nursing Home Costs -Assisted Living Costs -Home Care Costs -Adult Day Care Costs
Daily Benefit Amount : Considerations: -Carrier Surveys that discuss: -Give client a copy for their records… Don’t they need to know what they could be “on the hook for” if they don’t follow through with your advice? Compliance
Daily Benefit Amount : Considerations: -How much of the risk does the client want to take on? -What kind of risk tolerance do they have if you manage investments? -Co-insuring the risk -getting to that amount
Planning Metric Number II: Benefit Period
Benefit Period: Considerations: -Step 1 of the 3 step process -Longevity in client/prospect family: -Parents -Grand parents -Siblings -Aunts
Benefit Period: Considerations: -Longevity: -Uncles -Other applicable family members Does the client think they could live a long life?
Benefit Period: Considerations: -Risk Tolerance -Co-insuring considerations -Benefit Period issues: -Finite benefit issues -Carrier trends toward benefit period
Planning Metric Number III: Inflation
Inflation: Considerations: -Step 1 of the 3 step process -Longevity in client/prospect family -Partnership Considerations -Mastering the Partnership Inflation intervals
Inflation: Considerations: -Main Partnership Inflation Intervals: < Age 60: Some form of C.I. 61---74: Simple or C.I. 75+: No inflation required
Inflation: Considerations: -Risk Tolerance -How much cost sharing are they contemplating? -Compound, Simple, CPI, GPO/FPO main considerations -Can vary by state