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CPS Midwest Life LTC

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How To Help Clients Through The LTCi Claims Process

More often than not, people don’t like to admit they need help with things they once did for themselves. This often happens with those requiring Long-Term Care, once they need assistance they rely on their family to provide for them.

What happens when the family care giver can no longer be of assistance? What happens when they get too burnt out or their abilities have been surpassed by the amount and type of care needed?

Once that final step has been taken and the caregiver realizes they need extra assistance, they usually file a claim.
 
Here’s how it works…
 
Assess Benefit Eligibility: This is the time when the insurance company checks to make sure the insured is eligible for care. Usually this is when a health practitioner determines the insured is chronically ill and needs help with at least two of the six activities of daily living for a period that is supposed to last at least 90 days or if the health care practitioner determines the insured needs constant supervision due to severe cognitive impairment
 
Submit Notification: If you feel your client meets the eligibility criteria you can notify the insured’s insurance company that a claim is being made. Notification should usually be made within 30 days of the onset of the need for care or as soon as reasonably possible. Notification can usually be made by mail or telephone and should include the insured’s name and policy number as shown on the policy schedule
 
Then what?
  • Once the notice of claim is received by the insurance company, a claim form is then sent to the insured. The form should be returned along with a provider’s bill to document the proof of loss.
  • Then the claim is evaluated to verify the insured meets eligibility requirements. Often an assessment is scheduled or the insured’s health care practitioner is contacted to verify medical records.
  • Once the claim is valid, a case manager will work with the insured’s family or caregivers to determine appropriate types of care.
  • After the policy’s elimination period has been satisfied, benefits will be paid to the insured or their care provider.
Although there is a good chance that the LTCi policies you sell today won’t have claims for years to come, it is also possible for an illness or injury requiring LTC services to strike one of your clients tomorrow.
 
It is best to be prepared and understand the claims process so you are fully prepared to help your clients put their LTCi policies into action.
 
For more information about LTC or the claims process, contact your LTC Specialists today.
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3 Key Questions Demonstrating The Need For LTC

Finding reasons why your clients need LTCi can be a challenge. You want them to understand the importance and need for the product, and also how it can impact them and their family.
 
Ask these 3 questions to your prospective clients to drive the point home on why having a LTCi policy is so important.
 
1. What’s your plan?
 
Your client has probably not thought about what they will do when they reach an age when they need help with tasks they are used to doing themselves. Have they thought about where they will live, or who they will live with? These planning questions are a great starting block to getting the LTCi sale.
 
2. Who do you know?
 
Ask your client if they know someone that has been in a LTC situation, or maybe they have even been in one them self? If they have seen the emotional, physical and financial burden a LTC situation can have, they most likely do not want the same to happen to their family.
 
3. How will you pay?
 
Does your client know that health insurance does not cover LTC services? Explain to them that a LTCi policy can give them the care they want and prefer. A LTCi policy can also make sure funds are available when your client needs them, then they won’t diminish their retirement savings or have to liquidate assets.
 
These questions are just the beginning on how to demonstrate to your clients the need for LTCi. Be sure to ask these questions and stress the need of LTC on your next appointment.
 
Our LTC Team is available to answer any questions you may have. Contact us today.
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How LTC Insurance Can Lower Your Clients’ Tax Bill

How do you get people to sit up and take notice? Talk taxes. Tell them you have a way to help them reduce their state and federal tax bill.

A Long-Term Care Insurance (LTCi) policy has the potential to help people lower the amount they pay in taxes.

And at the same time, LTCi provides valuable insurance coverage that can help them remain in their home, protect their retirement nest egg and ensure they won’t have to rely on their kids to take care of them.
 
LTCi Premium May Be Tax Deductible
 
Each year, the federal government sets guidelines for tax deductibility. Individual policyholders may be able to deduct a portion of the premium paid for a tax-qualified LTCi policy. This is called eligible premium.
 
Business owners who use business dollars to purchase LTCi can also experience significant tax savings based on the tax structure of the business:
 
  • Self employed business owners may deduct eligible premium paid for the owner, spouse and dependents. They also may deduct the total premium or actual premium paid for employees.
  • Owner/employees of C Corporations may deduct actual premium for the owner/employee, spouse, dependents and employees.
Policy Benefits May Be Tax Free
 
Benefits received under a tax-qualified LTCi policy are intended to be tax-free as long as they do not exceed the greater of actual qualified LTC daily expenses or the IRS’ per day limitation.
 
Out-of-Pocket LTC Expenses May Be Tax Deductible
 
Generally any LTC expenses the policyholder pays out-of-pocket may be claimed as a medical deduction on a federal income tax return. The only exception is payment for home care provided by a family member who is not a licensed health care professional.
 
Some States Also Offer Tax Deductions
 
Currently a number of states offer tax deductions and/or credits for people who purchase qualified LTC Insurance policies. And these state deductions and credits are in addition to those offered by the federal government.
 
There’s No Better Time to Talk Taxes
 
Everyone is looking for ways to save, which is why now is a good time to talk to prospective clients about the tax advantages of purchasing LTCi. They’re sure to be more receptive when they learn that purchasing the coverage they know they need also can help them reduce their tax bill.
 
For more information, contact your LTC Specialist today.
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What Demographic Is Seeing An Upswing In LTCi Sales? The Answer May Surprise You.

Although people that are approaching retirement age are great candidates for Long-Term Care Insurance (LTCi), there is a rising trend in younger people purchasing a policy to protect their future.

According to the American Association for Long-Term Care Insurance, 26% of LTCi policies are sold to people age 45 to 54.

So what is prompting the younger generation to purchase something they may not use for 20 or 30 years?
 
Personal Experience
 
Many people who purchase LTCi policies understand the importance of having coverage because they are currently taking care of their aging parents while trying to raise their own families. These people know the benefits of LTCi and don’t want to put the burden of being a caregiver on their own children.
 
Cost of Premium
 
The premium for LTCi is based off the applicant’s age. This means that the younger they purchase a policy, the less they will pay. Although they may pay for a longer period of time, it is generally less expensive than waiting to buy.
 
Future Insurability
 
Younger buyers know that if their health were to change tomorrow they may not be able to purchase LTCi at any price. Buying the policy while young and in good health not only eliminates the concern about future insurability, it may cost less considering younger people have a better chance of qualifying for good health discounts.
 
The next time you are looking for prospects for LTCi, be sure to consider people in their 40s and 50s.
 
If you would like more information about prospecting for LTCi, contact your Long-Term Care Specialists today.
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Home Is Where The Heart (And Sale) Is

When you approach clients about Long-Term Care Insurance (LTCi), be sure to ask where and how they would like to receive care should the need arise some day. Chances are, they’ll want to stay at home.

65% of long-term care is provided in the home – either in the home of the person receiving care or at a family member’s home.

Many people visualize long-term care as uprooting to a nursing facility – but plans allow for 100% of the benefits to be paid at home, allowing clients to stay with loved ones in an environment they’re used to.
 
Highlight the home care benefits that are automatically included in the coverage.
 
Doing so is a smart and effective way to show you are listening and are able to provide solutions that fit their needs.
 
If your clients are like most people, they find it hard to imagine moving out of the comfort of their own house for help with daily living activities like bathing, getting dressed, and eating. By emphasizing these at-home benefits, you’ll appeal to your clients’ desire to maintain their independence and quality of life, while increasing your potential for a successful sale.
 
We’re here to help you design a plan that is both affordable and the best solution for your clients’ needs – contact your LTCi Sales Reps for guidance.
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LTC Detective Work – 6 Things You Need To Do

Long-Term Care can be a tough subject.

Often times, you have to do a little detective work to ensure your cases are processed through Underwriting quickly.

Here are six things you can do to help uncover important information the underwriter needs to issue your case.
 
Ask about specialty physicians.
  • If your client had bypass surgery, ask whether they have a cardiologist.
  • If they had joint replacement, ask if they have an orthopedist.
  • If they have rheumatoid arthritis, ask if they see an arheumatologist.
  • If your client is taking multiple medications for depression and anxiety, ask if they have a psychiatrist.
  • If they have diabetes, ask if he sees an endocrinologist.
Pay attention to the date of diagnosis.
A recent diagnosis (within six months to one year) may not be enough time to assess the client’s stability.
 
Note the date of the last doctor’s visit.
If it’s been over two years since your client’s last physical exam and lab work, they won’t qualify for preferred underwriting. Also, pay attention to recent doctor’s visits. Ask your client if they have a follow-up visit planned. Knowing an applicant is undergoing treatment allows the underwriter to order an attending physician’s statement immediately, instead of waiting until the client mentions it during the personal health interview.
 
Listen carefully for these things:
  • Pending tests – Be sure to ask if the client is scheduled for a test that has not yet been performed.
  • Recent surgeries – Ask what type of surgery the client had. Was a malignancy found? Has the wound healed? You also should ask if the client is released from care or requires further follow-up.
  • Physical therapy – Ask about the diagnosis. Is the pain or condition resolved? Do they require further treatment? Find out if the physical therapy helped or if surgery has been recommended.
Try to identify the diagnosis behind the medication.
Many people refer to a medication in terms of the symptoms it addresses. For example:
 
  • Your client says they take a “water pill for fluid.” This can mean several things, from occasional lower extremity edema to something more serious, like heart failure. Also, pay close attention to the medication dosage as this can be a clue to your client’s condition.
  • Many applicants will indicate they take a “blood thinner.” Ask about the diagnosis. Is there a history of stroke or mini-stroke? Has the client had any type of heart surgery and, if so, when? Has the client had blood clots? If so, how long ago? Has the client had surgery of the leg?
  • If your client says they take a medication for “bones” or to “prevent osteoporosis,” ask if they’ve had a bone density test done in the past two years and what the doctor told them about their bone density. Typically, these medications aren’t prescribed unless bone density tests have indicated the applicant has some type of bone loss, which impacts insurability.
  • If your client mentions taking a medication for “arthritis,” you should suspect rheumatoid arthritis or another serious condition and rate accordingly.
  • If your client lists pain medications, specifically narcotics, it’s very important to find out the reason the medication is used, how often it’s taken and how long the client has used it. For example, does your client use it only after they mow the lawn or do they have pain on a daily basis?
Question everything.
If you have a client who is young, but not working, ask why. Do they have chronic health conditions that prevent them from working? Are they collecting disability benefits? The underwriter needs to know.
 
Please contact your LTC Specialists for more information.
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Yes, Long Term Care Insurance Can Be Affordable

While it’s a common belief that designing affordable Long-Term Care (LTC) coverage may prove difficult, if not impossible, there are ways to ensure manageable costs.

An LTC insurance policy is only as expensive as you make it.

Flexibility in plan design and product features enables this coverage to be available to meet most budgets. When putting a plan in place for your clients, keep these cost reducing tips in mind to prevent sticker shock:
 
Suggest An Asymmetrical Case Design
 
You may have some clients who want LTC coverage for themselves, but not for their spouse due to cost. While two fully loaded policies may prove costly, coupling a “token” benefit policy for one spouse can save a significant amount on their premium.
 
What can they expect to save?
 
  • One of our strategic carrier providers offers a 40% discount for a married couple applying together (both approved) versus no discount for a married person applying alone.
  • Other carriers will offer a 20-30% discount for a married couple applying together (both approved).
 
Take Advantage Of Age And Health
 
The earlier your clients start thinking about long-term care, the more options they’ll have to consider, and the more affordable those options will be. The ideal age to start the planning process is between 45 and 60.
 
Here are two big reasons why:
 
  • The younger the clients are, the lower their annual premium will be versus a comparable policy purchased at an older age.
  • The younger the clients are when they apply for coverage, the better chance they’ll qualify for a preferred health discount. The older they are, the more likely the application for coverage could be denied.
 
Adjusting To Fit A Budget
 
Regardless of a client’s age, they likely have a variety of other competing financial priorities on their mind. LTC insurance coverage doesn’t have to be an all-or-nothing decision.
 
The most important thing is to make sure to put some level of protection in place, versus ignoring the risk altogether. Having a pool of money in place enables clients to hedge against the risk of needing care someday.
 
We’re here to help you design a plan that is both affordable and the best solution for each of your clients’ needs – contact your LTC Specialist today.
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Inflation Protection: One Size Doesn’t Fit All

Increasingly, people are recognizing the need for Long-Term Care (LTC) Insurance earlier in life.
 
Since your clients may purchase a policy 20 to 30 years before they might need to use their benefits, it’s important to consider inflation protection when you design their Long-Term Care Insurance plan.

Inflation protection riders can help protect your clients’ assets against the rising costs of LTC.

With so many riders available, which one should your clients choose? Which option is the best for a particular client depends on many factors, including their risk tolerance, personal preferences and budget.
 
3% or 5%?
 
When it comes to compound inflation protection options, your clients’ choice is often between the 3% or the 5% benefit increase riders.
 
Historically, the 5% compound inflation protection option was often considered the best choice because it maximizes the potential pool of benefits. However, the cost of long-term care is now rising at a lower rate than in the past.
 
For many years, nursing home and other long-term care costs increased at around 7% per year. Currently, the average five-year annual growth of facility care was about 4%. The cost of home care has been increasing at an even slower rate, with average five-year annual growth of just above 1%.
 
Compared to the 5% compound inflation protection option, the 3% option is less expensive, and the data suggests it may provide adequate inflation protection to keep up with the rising cost of home care.
 
Know Your Client
 
Your clients have several alternatives to help protect them from the rising cost of care. A 3% benefit increase rider may be the right option for those clients looking for dependable inflation protection at a lower cost.
 
Talk to your clients about their priorities, and help them choose the best inflation protection option for them.
 
We’re here to help you design a plan that is both affordable and the best solution for your clients’ needs – contact your LTCi Sales Rep for guidance.
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How LTC Insurance Can Lower Your Clients’ Tax Bill

How do you get people to sit up and take notice? Talk taxes. Tell them you have a way to help them reduce their state and federal tax bill.

A Long-Term Care Insurance (LTCi) policy has the potential to help people lower the amount they pay in taxes.

And at the same time, LTCi provides valuable insurance coverage that can help them remain in their home, protect their retirement nest egg and ensure they won’t have to rely on their kids to take care of them.
 
LTCi Premium May Be Tax Deductible
 
Each year, the federal government sets guidelines for tax deductibility. Individual policyholders may be able to deduct a portion of the premium paid for a tax-qualified LTCi policy. This is called eligible premium.
 
Business owners who use business dollars to purchase LTCi can also experience significant tax savings based on the tax structure of the business:
 
  • Self employed business owners may deduct eligible premium paid for the owner, spouse and dependents. They also may deduct the total premium or actual premium paid for employees.
  • Owner/employees of C Corporations may deduct actual premium for the owner/employee, spouse, dependents and employees.
Policy Benefits May Be Tax Free
 
Benefits received under a tax-qualified LTCi policy are intended to be tax-free as long as they do not exceed the greater of actual qualified LTC daily expenses or the IRS’ per day limitation.
 
Out-of-Pocket LTC Expenses May Be Tax Deductible
 
Generally any LTC expenses the policyholder pays out-of-pocket may be claimed as a medical deduction on a federal income tax return. The only exception is payment for home care provided by a family member who is not a licensed health care professional.
 
Some States Also Offer Tax Deductions
 
Currently a number of states offer tax deductions and/or credits for people who purchase qualified LTC Insurance policies. And these state deductions and credits are in addition to those offered by the federal government.
 
There’s No Better Time to Talk Taxes
 
Everyone is looking for ways to save, which is why now is a good time to talk to prospective clients about the tax advantages of purchasing LTCi. They’re sure to be more receptive when they learn that purchasing the coverage they know they need also can help them reduce their tax bill.
 
For more information, contact your LTC Specialist today.
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Controlled Executive Bonus With LTC Benefits

A Controlled Executive Bonus Plan, also known as a Restrictive Executive Bonus, or Section 162 Plan, is an agreement between an employer and its key employee(s) to provide a death benefit, supplemental income, and now includes long-term care benefits.
 
The employee applies for and owns the life insurance policy, with the right to designate the beneficiary(ies) of the policy.  The company then pays the “bonus” premium directly to the insurance company.

The employee’s right to receive the cash value of the policy through loans, withdrawals or surrender is restricted during a time period based on age, years of service or other conditions agreed upon by the company and the employee.

If the employee terminates employment during this restricted period, the company must agree for the employee to have access to policy cash values.  The employer, at that time, may require repayment of some or all of its “bonus” premiums from the policy’s cash value in exchange for its agreement.
 
*Subject to agreement
 
A Controlled Executive Bonus Plan has two advantages to the employer:
 
  • Pay key employee(s) a bonus in the form of a life insurance premium
  • Can take a current deduction for the bonus
Benefits of a Controlled Executive Bonus Plan
For the employer:
 
  • Can select which key employees can participate
  • No mandatory eligibility and participation rules
  • No IRS restrictions or approval
  • No government forms or reports, minimal administration
  • “Bonus” premiums are tax-deductible
  • Recruit, reward and retain key employees using “golden handcuffs”
For the employees:
 
  • Income-tax free benefits paid to surviving family at death
  • Permanent life insurance protection
  • Long-term care benefits available
  • Tax-deferred growth of policy cash values
  • Income-tax free death benefits
  • Although the employee must report the life insurance premiums paid each year as taxable compensation, impact of this can be minimized by the employer providing a cash bonus to the employee sufficient enough to cover both the premiums and income taxes due
  • Unrestricted ownership of policy and its values after the restricted period ends
The endorsement is executed by the employer and employee and filed with the insurance company.  For a specified period of time agreed to by the employer and the employee, the endorsement restricts some of the employee’s ownership rights in the policy.
 
During the restricted period, the endorsement restricts the right of the employee to surrender the policy, assign the policy as collateral, change ownership or make a policy loan, unless the employer also agrees.  The restrictive endorsement is typically designed to expire at a defined point, usually between 5-15 years.
 
For more information about the long-term care benefits included in a Controlled Executive Bonus Plan, please contact your LTCi Sales & Marketing Manager.

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