The Element Advantage – a practical, accessible, and affordable Long Term Care Plan

Presented by Michelle Daharsh

A new long term care solution was introduced to the industry in late June of this year. Designed by Genworth, this plan was built around their flagship product – Privileged Choice Flex 3. The concept of Element is to still offer comprehensive coverage for long term care but make the process for the client easier to understand, requires minimal decisions for them to make, offers an expedited process through underwriting, and is designed to reach more of the middle market with affordable coverage. Element features four preset packages and two decisions to make: determine what level of protection your clients want, and for couples, if the optional Shared Coverage benefit is desired.

The four plans available are the Element 25, 50, 75, and 100. These plans correspond with the coverage maximum dollars available of $25,000, $50,000, $75,000 and $100,000. These options allow the client to choose the level of coverage that works best with their needs and budgets. The Element plan still includes monthly reimbursement, 1st day home care, inflation protection of 2% compound, waiver of premium and return of premium up to age 65. The belief of selling smaller, easier to understand coverage packages shouldn’t require the same amount of time and effort as fully customized larger plans. With one underwriting category the new business process is expedited, along with minimal additional requirements being used, thus making the policy coverage available faster for you and your client.

The Element brochure is a helpful sales tool to walk a client through the sales process. It includes the prequalification questions, description of the plan, examples of coverage, and monthly premium rates. So if you don’t have access to the internet or quoting software you can still provide your client a monthly price!

Take a look at your book of business and see which of your clients decided against Long Term Care coverage because of premium cost. Maybe Element will be the right fit for them! If you would like the Element Brochure to help you along the way, contact Financial Brokerage at 800-397-9999 and we can provide you that resource!

Overcoming Objections in a LTC Sale

Presented by Tim Dreher

If you read my last two blogs (and I hope that you have) you’ll know that we’ve now come to the last of what I believe are the 3 most common objections in an LTC sale.

“I need to think about it.”

I’m sure that we’ve all heard this one a time or two. When I get this objection I know that it’s either a cost issue or I haven’t done a very good job of helping the prospect understand the importance and the value of purchasing an LTCi policy.

After some probing follow-up questions, I can usually get a pretty good idea of the reason for their hesitancy.

If it’s about the cost, I empathize with them and tell them that I understand that most people, myself included, have a budget and that initially, the cost of LTCi can be a little daunting. It is a big financial commitment for most people. Showing the premium cost relative to the cost of care can be a big help in easing concerns about premiums. If the reluctance is about them understanding the value of long term care insurance I then suggest that we go back and look at ways to build a comprehensive plan that will take care of any potential long term care needs and still fit within their budget. At the same time, I also remind them that the best time to put a plan in place is now. They will never be younger or healthier than they are today, and by putting it off, they take the chance that something negative could happen to their health. Then, unfortunately, no amount of money will get them a long-term care policy.

If the issue is that they still don’t fully understand how the policy works, I highlight the plan’s features, show them how the coverage works and emphasize how it would benefit them and take care of their needs should they ever find themselves needing care.

I remind them about the costs, both financially and emotionally, of finding themselves in a long term care situation without a plan in place.

Some of life’s decisions are just too important to ignore and putting it off will not make it go away.

“Now, if I’ve answered all of your questions, are you ready to get started with the application?”

Overcoming objections in a LTC sale

Presented by Tim Dreher

In my many years of working with Long Term Care insurance, I’m pretty confident that I’ve heard just about every objection there is to hear. Over the next several blog posts, I will focus on what I believe are the three most common objections.

The first objection: “I don’t need Long Term Care insurance. My family will take care of me.”

I’m sure that most people assume that their family will help take care of them should they find themselves in a long term care situation. In most cases their assumptions are probably correct, at least for a short time.

However, I’m also fairly sure that most people haven’t given much thought as to how a long term care situation can, and in most cases, does negatively affect the spouse, children, or other family members providing the care. You, as their advisor, need to discuss the potential physical, financial, and emotional toll that many caregivers suffer.

Over half of all caregivers today are the adult children of the care recipient with families, careers, and responsibilities of their own. I have seen caregivers put their careers on hold by taking time off from their job or even quit their job in order to take care of a spouse or parent. Studies have shown that the typical caregiver misses an average of 7 hours of work per week caring for a family member and last year, 77% of all working caregivers missed at least some work time.

Many caregivers themselves become sick due to the stress and exhaustion that can come with being a caregiver. Of caregivers surveyed, 43% felt that caring for a family member had negatively affected their emotional and physical health and well-being. Additionally, 55% said that they felt that they were not qualified to provide the necessary level of care needed. They also felt guilty about taking time away from their own spouse and children to be a caregiver to a parent or other family member.

Many caregivers also suffer financially when they find it necessary to dip into their own savings and or retirement funds to help pay for care, not to mention the lost wages for taking time away from work to provide care to a loved one.

Of course most people hope that their spouse, children, or other family member will help take care of them if they should find themselves in a long term care situation. It is your job, as their advisor, to show them that a Long Term Care insurance policy will help the family to take care of them better and longer, and without the extremely high levels of emotional, physical, and financial stress that many times go hand-in-hand when a family member needs care.

How to Choose a Long Term Care Carrier

Presented by Michelle Daharsh

When it comes to selecting an LTCi carrier today, you certainly have lots of choices. Most carriers offer a basic foundation of benefits that look fairly similar from company to company, so how do you make a choice and recommendation to your prospect? Here are three characteristics to consider when making that choice:

1. Contemporary, Innovative Products

Look at carriers that offer competitive features that set them apart from the competition. Features like cash benefits, streamlined underwriting, calendar day elimination period, and waiver of elimination period for home care claims are just a few of the many and important options available.

2. Competitive Pricing

Do your research and find the products that are competitively priced. Age, health and whether the prospect has a spouse or partner all become critical information in your selection for a recommendation to your prospect. Providing your prospect with the best products for the best value is critically important. Each carrier has their own “sweet spot”. Some examples of “sweet spots” can be competitive pricing at certain ages, partner allowances, multiple inflation options, and underwriting risk.

3. Financial Strength and Stability

In the past it wasn’t much of a factor what the ratings of a carrier were. We have fewer carriers now in the market and the rate instability has shown that carrier strength is very important. Working and placing your prospects’ business with a financially strong carrier becomes even more important. Carriers with a history of remaining competitive, stable and secure even in tough economic times will most likely prove that they are able to meet the needs of your prospect in the future. Also, look for carriers that maintain high ratings from industry rating organizations.

So whether it is the competitive pricing of a product or the financial strength of a carrier, Financial Brokerage is equipped to provide you with the resources and knowledge you need in making the best decision with your prospect and their long term care insurance coverage.

With Experience Comes Knowledge.  Are the LTCi Carriers Getting it Right? 

Presented by Leonard Berthelsen

We certainly would like to think that knowledge comes from experience and that we are onto a brighter future with long term care insurance.  A recent article on the website LifeHealthPro.com outlines many of the issues affecting LTCi carriers and the impact that it has on policy design and pricing.  The article outlines a recent study that was completed using Society of Actuaries (SOA) data from 2000 through 2011.

In that data, of 172,000 claimants of long term care benefits representing $7 billion in claims revealed some important information such as, that although actual claims for LTCi policies with lifetime benefits may be higher than those for policies with limited benefits, the claims incidence for policies with limited benefit periods is actually higher than the incidence for policies with lifetime benefits.” This shows that the concern for lifetime benefits from the carriers’ perspective may have been too conservative and might open the door to future benefits being available in longer durations. 

Another excerpt from the LifeHealthPro article that dealt with substandard issued LTCi policies was, that despite the fact that “the substandard risk category paid more for coverage than policyholders in the standard or premium category, they are less likely to file claims than policyholders in the standard category.”  The conclusion drawn here from the claims data compiled by the SOA is that the carriers pricing again may have been too conservative in relationship to their overall risk for this class of applicants. 

Are the carriers using this new found “tool” (claims data)?  In my opinion it appears that at least some of them are.  New generation of LTCi products seem to be designed based on some of the data on claims and benefit utilization, and that is a good thing.  As the carriers better understand the data put into their pricing model, new versions of LTCi will be introduced and the future certainly looks brighter today than 5 years ago.  LTCi products related to linked benefits, life insurance and annuities all have had provisions and riders recently developed to address the long term care event that many of its policyholders will likely face. 

As is the case with most industries that have government regulations and oversight, we have to have the regulators onboard with change as well.  Having them recognize the need for improvement in plan design, pricing and overall features will be a big step for an industry wanting to succeed, but also needing to be profitable.  Regulators in recent years have had to wrangle with the issue of carrier rate increases on previously sold LTCi plans.  This is not an easy task for them or for the carriers.  No one likes rate increases and it is certainly never easy explaining this to the policyholder.  Maybe some of this data will help the carriers get it right. 

Will we see a resurgence of interest from carriers to enter the LTCi market place that left in previous years, or new carriers that see an opportunity for new growth?  Time will tell, but one thing is for certain, the more knowledge and experience that a carrier and an industry has, the better the products and better the pricing.  It’s funny how the very reason why we sold LTCi is what is giving us the glimmer of hope for a brighter future CLAIMS!