Successful Long Term Care Planning Discover the Missing Piece: Developing Need

1
Successful Long Term Care PlanningDiscover the
Missing Piece Developing Need

• Rose Clayton, CLTC, CSA
• Manager, Long Term Care Sales Marketing
• CPS Insurance Services

2
AGENDA

• Beliefs (Yours Your Clients)
• Why is Long Term Care a Problem
• The Path of Discussion
• Asking Questions ListeningAsking More
  QuestionsListening
• When and how to show the illustration

3
What Do YOU Believe About Long Term Care
Insurance?

• Its too expensive
• My clients just dont think they need itthey
  may never use it
• Its very complicated
• I dont understand it well enough to explain it
  to my clients
• I dont want to embarrass myself in front of my
  clients
• Im too busy with my other products
• I cant cope with the objections
• I dont have my own policy

4
Whats Going On in Your Clients Heads?

• They think long term care means Nursing Home
• They dont want to think about getting old or
  losing their independence one day
• They dont like to be shaken from their DENIAL
  and they dont want to think about it NOW
• They dont want to pay for a risk that seems so
  far away or that they may not need
• They dont like being responsible for it. Its
  more comfortable to think about somebody else
  taking care of it for themlike their spouse,
  kids, other family, friends, neighbors, the
  Government, or God
• They dont know what care could cost them now or
  in future
• But they think they probably will have enough
  money to pay for it if it happens

5
Why is Long Term Care a Problem? "Will you
still need me, will you still feed me, when I'm
64?"
- -
Lennon and McCartney When The Beatles
released "When I'm 64" back in 1967, 64 years was
about as long as most Americans were expected to
live. In 1900, the average life expectancy for
Americans was 47.3. Today it's 77.9.
6
Life Has Changed. Were Not Dying Like We Used
To.

• Increased Life Expectancy
• Born in 1900, your life expectancy was 47
• Born in 2000, your life expectancy is 77
• By 2035, there will be 57 million Americans over
  the age of 70
• The fastest growing segment of the U.S.
  population is age 85 and older
• Rapid Advances in Medicine
• Acute infections, diseases, accidental injuries
  are no longer deadly
• Within next 10 years, experts predict cancer will
  be classified as a chronic illness manageable
  with new classes of drugs
• Chronic and Degenerative Conditions
• As medical breakthroughs extend and improve
  lives, more individuals are living longer with
  chronic illnessesarthritis, heart ailments,
  stroke, diabetes, dementia
• For others who have been healthy, the normal
  aging process prevails. The healthier youve
  been, the longer you live.

7
When You Dont Die

• You live
• When you live, you get old
• When you get old, you get sick
• When you get sick, you need care.
• Harley Gordon,
• Founder, Corporation for Long Term Care
  Certification

8

• Lets face it. If we live long enough, its
  going to happen to most of us.

9
But its not all bad. This long life gives us
unprecedented opportunities.

• Another whole life is available in retirement
• Your grandchildren have you longer
• You are able to continue your commitment to the
  community
• To live longer and healthier than our ancestors

10
Living a Long Life is a Near Certainty.
Planning For It is a Necessity.

• The Path of Discussion with your client is based
  on the following 3 sequential steps
• Establishing the need for long term care planning
  because of longevity
• 2. Understanding that Long Term Care is a Family
  Issue
• 3. Realizing that their savings or Retirement
  Portfolio is the only thing that will pay for care

11
Use a Fact Finder

• Establishes credibility by focusing on a plan,
  not the sale of a product.
• Helps to qualify your clients both financially
  and physically.
• Enables you to understand your clients personal
  experience and family situation.
• Gathers the necessary information to design the
  plan with the features and benefits that match
  your clients needs.

12
Asking the Right Questions Has Two Purposes

• Helps you understand your clients concerns,
  emotions and feelings.
• Establishes your clients reasons for purchasing
  long term care insurance.
• People are silently begging, Dont try to sell
  stuff to me. Listen to me, value me, understand
  me, and let me know that you want to help me.
• 
  Integrity Selling for the 21st
  Century
• 
  Ron Willingham

13
Begin with Fact-Finding Questions

• Jim, Im prepared to talk about long term care
  planning, which we discussed on the phone (in our
  earlier meeting). If you could give me your
  perspective (thoughts) on that, we can focus the
  meeting on what interests you.
• Before I got here today, you probably had a
  conversation about long term care. Would you
  share your thoughts with me?
• When you hear the words long term care, what do
  you think of?
• Have you had any prior personal experience with
  someone who needed long term care? What happened?
  Who provided the care? How long did the illness
  last? What effect did care giving have on your
  family? Who paid for the care?

14
Personal experience is important. If theres
been none, ask

• What have you heard about it?
• Why are you interested?
• Why do you think you might want long term care
  insurance?
• Ive had an experience and I want to take a
  moment to share with you the impact it had on my
  family.
• (If you have not had a personal experience, use a
  clients or someone you know
• BUT IT MUST BE REAL AND TRUTHFUL)

15
Long Term Care Is Not A PlaceIt is a continuum
of care, housing, and services people and their
families may need because of a disability or
chronic illness. Its assistance with everyday
activities of daily living or supervision due to
a cognitive impairment. The goal is, whenever
possible, to have the individual age in place.
16
Step 1 Establishing the need for LTC because of
longevity

• LTC is a problem today because people are
  living longer. Wouldnt you agree? If you take
  reasonably good care of yourself, you are likely
  to live a long life. Even if you dont take care
  of yourself some new medicine or procedure is
  likely to be developed that will extend your
  life. When you live a long life you could need
  care.
• Could this happen to you?

17
Dont Assume AnythingListen to what your client
says

• It is absolutely important that your client
  agrees that he /she will live a long life and
  when they do live a long life, there is a
  reasonable likelihood that they will need care.
• Never assume that the client understands. Listen
  to what they say. Do they mean it?
• After they agree, askThe question is not who
  will take care of you, but rather what will
  providing that care do to your family and your
  retirement portfolio?

18
More Fact-Finding Questions

• Is it important for you to maintain your
  independence in the community without placing a
  burden on your family?
• Are you concerned that a chronic illness will
  threaten your commitment to continue to provide
  for your spouse?
• Is it important to control the quality of care
  that you receive and where it is delivered?
• Is it important to preserve your assets and
  income?
• Will you have a continuing financial obligation
  to any of your children or grandchildren that
  have personal problems or are physically or
  mentally challenged?
• (For Second Marriages) Is it important to
  distribute your assets to your children according
  to your will or prenuptial agreement?

19
Increase the volume of information from your
client

• Once the topic is on the table, help your client
  think by probing deeper
• Tell me more about
• Would you elaborate on
• Give me an example of
• What else should I know about
• What else would help me understand
• Believe that the sale is being made when the
  client speaks about the need. Not one moment
  is wasted.
• 
  
  Socratic Selling
• 
  
  Kevin Daley

20
Bridge to Personalizing Need

• If you live a long life and need care, what is
  your plan?
• If something happened today and you needed help,
  what would your concerns be? Whats your plan?
• Have you thought about who would take care of
  you?
• Have you thought about the impact providing for
  your care could have on your retirement
  portfolio?
• Are you comfortable using your own income,
  assets and resources to pay for long term care
  expenses?

21
Personalizing Need

• What income and assets have you allocated to pay
  for your long term care plan?
• Is it important to preserve your principal?
• Is it important to preserve your income?
• Where do you want your care to be delivered?
• Have you discussed long term care planning with
  your children?

22
Step 2 Understanding that Long Term Care is a
Family Issue

• It has little to do with your client. Its about
  their Family.
• Who suffers? The familymostly the spouse or
  adult child.
• Patient is taken care of by family, which
  struggles to provide the care necessary to keep
  their loved one in the community.
• Caregivers suffer from stress related illnesses
  and can become as chronically ill as the patient.
• This effort exacts a terrible price on the
  caregivers health and relationships with other
  family members, usually siblings who do not
  equally share the burden.
• Long term care rarely brings families togetherit
  can tear them apart.
• The illness runs the family.

23
Asking more questions

• What impact do you think long term care would
  have on your family?
• Is it an option for your family to take care of
  you?
• What kinds of things do you envision your
  children doing for you?
• Which of your children will be available to care
  for you?
• Where do they live? Will they be able to move
  to help take care of you?
• How could the financial and emotional burden of
  a long term care situation affect the
  relationship between your children?
• Would your daughter/son have to take time off
  from work? How would that affect your childs
  family?

24
Step 2 Understanding that Long Term Care is a
Family Issue

• When you live a long life and need care your
  family will do everything in their power to keep
  you out of a facility.
• If the client is married look at his spouse
  and ask
• If your husband needed LTC would you do
  everything that you could to keep him out of a
  facility?
• If you need care your wife will take care of
  you, but there is a cost to that care. Think of
  it this way. She will be under a tremendous
  amount of stress being your caregiver. What will
  that stress do to her? How will that stress
  affect her health?
• Whats your plan to protect her?

25
Step 2 Understanding that Long Term Care is a
Family Issue

• Your children will do everything in their power
  to keep you out of a facility. What effect will
  that have on their lives?
• What effect will the stress of care giving have
  on their health and the relationships that they
  have with their families?
• What effect will the stress of care giving and
  decision making have on their relationships with
  their brothers and sisters?
• Whats your plan to protect your children and
  grandchildren?

26
Your Client Begins to Realizeits not about me.
Its about my family.

• It is important that your client agrees that
  living a long life and needing care will have
  serious consequences to his family.
• Never assume that the client understands. Listen
  to what they say. Listen for their sincerity.
• Long term care insurance is not sold to
  individuals. Its
  sold to families.

27
Selling LTC Insurance Is Not Much Different Than
Selling Life Insurance
28
Care Coordination a HUGE Benefit to Families

• Care Coordination is the professional service
  that brings the help when you need it most to
  the policyholder and their family in the
  confusing, often overwhelming time that care
  begins.
•    
• Professional Care Coordinators are licensed
  health care providers who are independent of the
  insurance company and local to the community.
• A personal Care Coordinator acts as an advocate
  for your client and works with them and their
  family directly to develop a plan of care,
  identify care providers, provide advice about
  resources, provide assistance with claim forms,
  and help with implementing care and monitoring it
  as needs change over time.
• This valuable component is part of the policy at
  no additional cost. 
• It's the main reason people receiving care are
  able to stay at home and maintain their
  independence for as long as possible. 
• And it's often what motivates wealthy people to
  buy a long term care policy. 

29
Step 3 The Retirement Portfolio is the Only
Thing That Will Pay for Care

• What have you allocated from your retirement
  income and portfolio to pay for your plan of
  care?
• It is here that client may jump to the conclusion
  that they can self-insure. Discuss the
  following
• How inflation will effect LTC costs in the
  future.
• How taxes and capital gains will be added to the
  LTC bill.
• Loss of investment opportunity.
• Preservation of principal.

30
What Does Care Actually Cost in Todays Dollars
and What Will It Cost In the Future

• Today, average cost  75,000 per year
• In the future, at a rate of 5 compounding per
  year, cost will increase to
• 150,000 per year in 15 years
• 300,000 per year in 30 years
•  Assuming most LTC claims likely to last between
  3 5 years
• A 55-year old will need to have between 900,000
  to 1.5 million dollars set aside by age 85 to
  pay for anticipated long term care costs for one
  person, if they dont want their lifestyle to be
  adversely impacted by the cost of their care.
  They will need an equal amount set aside for
  their spouse.
• Where will the money come from?
•  

31
Client Has Protected Principal and Assets Their
Whole Life

•  

32
LTC Insurance is Life Insurance for Retirement
PortfoliosIts risk management.

• Life Insurance protects Principal.
• LTC Insurance protects Principal.

33
Step 3 Nothing will pay for care except
Retirement Portfolio

• When you consider your option to self-insure, do
  you feel that if you had to pay for care that you
  would be able to continue to provide for each
  other? Would you be able to stay at home and
  still have that feeling of security? Would you
  be able to keep the same lifestyle that you have
  today?
• What commitments do you see yourself carrying
  into retirement?
• (Spouse, Children/Grandchildren, Church)
• What are your passions that you plan to pursue
  when you retire?
• (Golf, Travel, Time with Family and
  Friends, Hobbies)

34
Step 3 Nothing will pay for care except
Retirement Portfolio

• When you retire, do you intend to live on your
  principal or your income?
• Would you like to pay for your care with
  principal or interest?
• If I could show you a way that you could receive
  your care with tax free dollars and also control
  the quality of care and where it is delivered
  without burdening your family, would you be
  interested?

35

• When and How to Show the Illustration

36
Show How a Policy Works

• This is how a LTC policy works.
• Its very simple. There are 4 things we will
  choose
• 1. Daily Benefit how much per day will the
  policy pay
• 2. Benefit Duration how long will the policy
  pay
• 3. Elimination Period a Time Deductible
• 4. Inflation Increases how we make the
  benefits in the policy grow to keep pace with the
  increasing cost of care in the future

37
Always Explain Inflation Increases - Go to
Inflation page

• Compounding Interest Accumulates TAX-FREE
  BENEFITS
• Show how todays 292,000 pool of with 5
  compounding
• can grow to 608,820 in 15 years,
• and 1,264,360 in 30 years.
• All available to be used TAX FREE for long term
  care expenses

38
The Break-Even - Do this on a legal pad

• This shows how the investment in long term care
  insurance will be
• recouped quickly when client receives their care
• Example
• Annual Premium - 2,142
• Number of years paid x 30
• 
  64,260
• Divided by daily cost of
• care in 30 years 866/day
  75 days
• You only need to receive care for about 2 ½
  months
• to break even on the premium dollars you invested

39
Cost-to-Benefit Value - Do this on a legal pad

• This shows how long term care insurance is
  costing pennies on the dollar
• Example
• Annual Premium - 2,142
• Number of years paid x 30
• 
  64,260
• Divided by value
• of benefits in 30 years 1,264,360
  5.1 cents paid for every dollar of benefit
• Who wouldnt want to do this as a part of
• their sound financial planning?

40
Objections

• Objections are a predictable part of the LTC
  sales process. The truth is there are no silver
  bullets. The idea of handling the objection is
  to get inside the clients head to understand why
  they said what they just said. Always agree with
  them by acknowledging that their objection is
  valid. And then, question why they feel that way.

41

• I need to think about it.
• Well, you know thats fineI understandthis is
  a difficult decision for some people. So what
  youre saying is that remaining self-insured may
  still make more sense to you than having
  insurance?
• Yes maybe.
• With all due respect, why do you feel that way?
• I just dont think I need it right now.
• I understand that right now you dont think
  youll need long term care so why pay for the
  protection. But may I ask, when will you know
  that youll need it?
• Well I guess I wont know until I do need it.
• So you are willing to take the gamble that you
  would be wrong at a potential cost of hundreds of
  thousands of dollars, when you can transfer the
  risk for pennies on the dollar and not have to
  worry about it?

42

• Im never going to need it
• Oh, so you are one of those who adhere to the
  Plop Method.
• (with a bewildered look) What is that?
• So you think that youre going to get to be 85,
  90 or 95 and youre just going to go plop
  dead?
• Oh yes, thats exactly what I want.
• Well, how many of your family or relatives or
  friends has that worked out for?
• (Client will probably acknowledge that its not
  very many)
• I recommend that you plan for something other
  than plopping.

43

• I dont want to pay for insurance that I may
  never need
• I understand that nobodyincluding me--ever
  plans on needing long term care and its natural
  to not want to spend money on the insurance. But
  may I askwhen was the last time you got out of
  your car and said, boy, I didnt use my car
  insurance todaythat was a waste!
• I will take care of my mother.
• I know you will. I want to talk about a way that
  you can provide that care LONGER BETTER.
• The long-term care insurance premium is too
  expensive.
• Lets put the premium and the problem into
  perspective.
• The premium is not the problem.
• The premium is the solution to the problem.
• Option Something is better than nothing. How
  much per year can you comfortably afford for a
  long term care insurance premium? Lets take
  that number and work backwards to create the best
  policy we can.

44

• I just want a quote.
• The issue right now is not whether or not you
  need insurance. Its more important to start the
  process of putting together a plan for long term
  care. (and if they shared personal experience)
  In fact, youve told me the consequences that not
  having a plan had on (person who need care)

45
CPS Long Term Care is Here to Help You Protect
Your Clients and Their Families

• Rose Clayton, CLTC, CSA
• Manager, Long Term Care
• [phone] x 159
• David Mayhew
• LTC Sales Marketing Associate
• [phone] x 127
• Kristin Perez
• LTC Case Manager
• [phone] x 113