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Long Term Care IN 2014

Long Term Care IN 2014. Genworth NYS Partnership and Non Partnership John Hancock NYS Partnership and Non Partnership Mass Mutual Some NYS Partnership and Non Partnership MedAmerica NYS Partnership and Non Partnership Mutual of Omaha Non Partnership TransAmerica Non Partnership

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Long Term Care IN 2014

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  1. Long Term CareIN2014

  2. Genworth NYS Partnership and Non Partnership • John Hancock NYS Partnership and Non Partnership • Mass Mutual Some NYS Partnership and Non Partnership • MedAmerica NYS Partnership and Non Partnership • Mutual of Omaha Non Partnership • TransAmerica Non Partnership Note – The maximum benefit period on Non Partnership plans is now 10 years, not all companies offer 10 years and no companies offer Unlimited benefits.

  3. GENWORTH NYS Partnership Total Asset *2/4/50 3/6/50 4/4/100 Dollar for Dollar 1.5/3/50 2/2/100 Non Partnership *Privilege Choice Flex 2 * Effective 2/24/14

  4. John Hancock NYS Partnership Total Asset 3/6/50 4/4/100 6/6/100 Dollar for Dollar 1.5/3/50 2/2/100 Non Partnership Benefit Builder

  5. Mass Mutual NYS Partnership Total Asset 4/4/100 Dollar for Dollar 1.5/3/50 2/2/100 ***Mass Mutual does offer the 3.5% compound inflation option on their NYS Partnership policies. Signature 500

  6. MedAMERica NYS Partnership Total Asset 2/4/50 3/6/50 4/4/100 Dollar for Dollar 1.5/3/50 2/2/100 **MedAmerica offers the 3.5% compound inflation option on all NYS Partnership plans. Non Partnership FlexCare & FlexCare Cash

  7. Mutual of Omaha Mutual Care My Way 3 My Way 5 My Way Assured Solutions Gold

  8. Transamerica TransCare Non Partnership only. Primarily used for underwriting purposes.

  9. WHO IS BUYING LTCi?

  10. Females, Caucasian; age 55 to 64 • Married couples with adult children • College educated • Working in a white-collar profession; not yet retired • Living in a metropolitan area • Homeowners with 11 or more years in the current residence • Affluent; upper middle class with a household income of $100,000 or more • A “planner” who is interested in financial issues, has life insurance and other conservative investment products • Family oriented • Familiar with LTC issues: knows someone that has needed care • Research oriented; on online user; self-educated about LTCi

  11. WHERE DO I FIND PROSPECTS?

  12. Current Clients • Centers of Influence • Civic Organizations • Associations • Referrals

  13. What is the problem? You can’t provide an acceptable solution without knowing what the problem is…

  14. FAMILY Many people have been caregivers for someone with a chronic illness or disability. These people are determined to never be a burden to their family. ABILITY TO STAY AT HOME People still equate long term care with a nursing home. Since nobody wants to go to a nursing home, no one wants LTCi. Explain that a Long Term Care insurance policy could be the tool that allows them to receive care at home, maintaining their dignity and independence. RETIREMENT NEST EGG We have talked for years about leaving a legacy to the children or a charity of choice. What about the healthy spouse and their quality of life when all their savings and assets are paying for the other’s care?

  15. How do I know what plan(s) to show my clients?

  16. Now that the NYS Partnership is reciprocal it is an even more viable option for your clients. When you add the lower inflation option and the shorter benefit period option on the Total Asset plans the NYS Partnership seems to be a favorite among NYS residents. The NYS Partnership is not the answer for everyone. There are non-partnership policies that will allow spouses/partners to share benefits if needed. There are policies that will pay some or all cash when receiving care at home. These plans can be designed to fit just about anyone’s budget with the varying benefit periods and inflation options that are available now. There are also Hybrid or Linked benefit policies. These are life insurance policies that will accelerate benefits when the insured requires assistance with 2 out of 6 activities of daily living or is diagnosed with a terminal illness. These plans may not always provide the LTC benefit that your client is looking for, in those cases it is very easy to stack or add a small inexpensive stand alone LTC policy with the Life policy.

  17. ACCELERATED BENEFITS Vs. Stand alone LTC

  18. National Life Term Policy The National Life Term policy with 10, 15 and 20 year terms can include a Chronic Illness Rider.After the term the policy is renewable each year up to age 81 and is convertible to age 70. There are two parts to the rider, Chronic illness and Terminal illness. The Chronic Illness would apply to an insured that has lost the ability to perform 2 of 6 activities of daily living (bathing, dressing eating, transferring, toileting and continence) OR a cognitive impairment. The Terminal Illness portion would apply when an insured has been diagnosed with a condition that is believed will cause death within 12 months or less. When the accelerated benefit rider is activated an interest charge is determined based on the life expectancy of the insured, reducing the death benefit. The monthly benefit is then calculated based on the remaining death benefit and the insured’s life expectancy.

  19. NATIONAL LIFE TERM PREMIUM Male – Age 55 Female – Age 55 $250,00 benefit $250,000 benefit 10 Year $1200/year $ 828/year 15 Year $1390/year $ 958/year 20 Year $1703/year $1110/year There are no up front charges for the accelerated benefit rider for either Universal Life or Term poilcies.

  20. National Life National Life offers the accelerated benefit with the Term Policy as we just discussed and also with a Universal Life policy. In both cases the underwriting is for the “life” coverage only. When the insured is diagnosed with a chronic illness, National Life will consider what the condition is and what the life expectancy is. At this time they will calculate the “future value” of the death benefit based on 6% interest and reduce the benefit by this amount, determining the monthly benefit. This policy has been used to get coverage for people that have been recently diagnosed with MS or Parkinson’s and are not showing symptoms. These conditions will never be insurable for stand alone LTC.

  21. UNDERWRITING As the companies continue to tighten their underwriting guidelines, we need to take on the role of underwriting prior to submitting. Ratings and declines reflect poorly on everyone and you know better than anyone it is much harder to go back to your client with a decline and try to sell an alternative option at that point. When you are having that initial conversation about LTC and it is determined that there is a reasonable need, however the clients want to think about it. This is your chance to say, “I’m not sure you can qualify for this coverage”. It is a gentle take away, and then gather some information that you can share with KAFL. I can then do some behind the scenes checking while they are thinking about it. If we determine that one or both of them would not be eligible, then you can go back with an alternative option. Whether that is a hybrid policy or just a life insurance policy to replace any assets spent on care.

  22. What questions should I ask? • What medications are you taking? • This could lead to more questions. • Have you been to the emergency room or admitted to a hospital in the last 5 years? If yes, what were the circumstances? • Get in the habit of asking height and weight, it can be one of the most awkward questions, if you ask everyone it will become more comfortable. Remember that if the applicants height and weight don’t fit in the company guidelines it will be an automatic decline.

  23. PREMIUMS PREMIUMS PREMIUMS

  24. NYS Partnership A 55 year old couple applying for $274/day, 100% HHC, 90/100 day elimination period, 5% compound inflation. Total Asset 4/4/100. Genworth $7686/year (combined) MedAmerica $7,305/year (combined) John Hancock $11,469/year (combined) Mass Mutual $12,889/year (combined) *$280/day When we change to 3.5% compound inflation… Genworth $4,969/year (combined) MedAmerica $5,593/year (combined) Mass Mutual $8,014/year (combined) *$280/day

  25. The same 55 year old couple, applying for $274/day, 50% HHC, 90/100 day elimination period, 5% compound inflation. Total Asset 3/6/50. Genworth $6,165/year (combined) MedAmerica $6,131/year (combined) John Hancock $8,680/year (combined) When we change to 3.5% compound inflation… Genworth $3,995/year (combined) MedAmerica $4,046/year (combined) **Mass Mutual does not offer any Total Asset plans with 50% HHC.

  26. TOTAL ASSET 2/4/50 Genworth and MedAmerica are currently the only companies offering the Total Asset 2/4/50 plan. With all the benefits the same just changing to this plan the premiums drop to… Genworth 3.5% compound inflation $3,504/year (combined) Genworth 5% compound inflation $5,104/year (combined) MedAmerica 3.5% compound inflation $3,091/year (combined) MedAmerica 5% compound inflation $4,656/year (combined)

  27. Genworth, effective 2/24/14 New Underwriting Classes Preferred Best Preferred Select Standard These underwriting classes have been used in several states for approximately a year. According to Genworth, 33% of applicants receive Preferred Best, 23% receive Preferred, 34% receive Select and 10% are Standard. The Select rate is most common with other companies Standard rating.

  28. Genworth TA2/4/50 with 3.5% and 5% Compound Inflation 50 year old couple, $280/day 50% HHC, 90 elimination U/W Class3% Compound5% Compound Preferred Best $1.357 $2,011 Preferred $1,507 $2,234 Select $1,742 $2,476 Standard $2,178 $3,095

  29. Single individuals, age 50, TA2/4/50, $280/day, 50% HHC, 90 day elimination Single FemaleRating3% Compound5% Compound Pref. Best $2,199 $3.329 Pref. $2,443 $3,699 Select $2,742 $4,296 Standard $3,427 $5,370 Single Male Pref. Best $1,597 $2,365 Pref. $1,774 $2,628 Select $2,085 $2,912 Standard $2,607 $3,640

  30. NON-PARTNERSHIP All of the non-partnership plans have a Shared Benefit Rider available. However, each company has their own way of making it work. Genworth Shared Benefit • Individual Policies • When the claimant has exhausted his benefits, begins using partner’s benefits • Regardless of how much of the health partner’s benefits are used, that partner is guaranteed to have at least 50% of the original pool of benefits. An example of this premium would be… A couple age 55, $7500/month, 100% HHC, 90 day elim, 4 yr, 3% cmpd., Shared Benefit, including Shared Waiver. $4,666/year combined

  31. MedAmerica’s non-partnership plan is Flex Care or Flex Care Cash. Flex Care is a reimbursement policy and FlexCare Cash will pay on a reimbursement basis in a Nursing Home, when having care at home or assisted living the monthly benefit will be paid to the insured to be used at their discretion, including paying family members or other non-certified care providers. They offer a different look at the Shared Benefit Rider. • Individual Policies • Additional pool of money to be shared. • Must be equal to or less than policy benefit periods. • Healthy spouses policy remains whole. A couple age 55, $250/day, 100% HHC, 90 day elim, 4 yr, 3% cmpd, Shared Benefit and Shared Waiver FlexCare $6,434/year combined FlexCare Cash $8,750/year combined

  32. Mutual Of Omaha also offers a reimbursement policy like the others. This plan includes a cash benefit when receiving care at home. The insured will be given the opportunity to take 35% of the Home Care benefit on a cash basis to be used any way they desire. The unused 65% of the benefit for that month will remain in the pool of money to be used later, however it can not be used in the same month with the cash. Mutual of Omaha offers yet another way of using the Shared Benefit Rider. • Individual Policies • When one policy is exhausted, begin using the other’s benefits • Must leave 1 year of benefits for the healthy spouse. A couple age 55, $7500/month, 100% HHC, 90 elim, 4 yr, 3% cmpd, Shared Benefit and Shared Waiver riders. $8,019/year combined

  33. The Long Term Care industry continues to change. We have no idea what the products will look like 5 or 10 years from now…we have seen the industry continue to develop different ways to address the need. We do know that your clients will always have the risk of losing all or a majority of their assets due to a long term health care event. When there are changes KAFL will keep you updated and will continue to offer education and options for you to share with your clients. We look forward to increasing your income by helping you grow your LTC and Life with LTC benefits business.

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