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LTC Benefits – Won’t Lose It If You Don’t Use It

One challenge with presenting the need for long-term care is that it is viewed as a risk, not a certainty.
 
It’s not that your clients don’t want the coverage, but convincing someone to allocate funds towards something they may never use can be a difficult objection to overcome.

Good news – Asset Based Long-Term Care (LTC) with Guaranteed Premiums paid for life is here.

It allows your clients to use the LTC benefit if needed – and if they don’t, they can leave the death benefit or accumulated value to their estate.
 
Clients receive a guaranteed amount of life insurance. All of which may be used for qualifying long-term care expenses – also, the premium is credited with a guaranteed interest rate, raising the cash value each month.
 
With the use of the OneAmerica Care Solutions® Rate Calculator, financial advisors can run a quote for key Asset-Care individuals anywhere, anytime. Plus, get an easy to understand take-home guide for your clients.
 
Access the OneAmerica® Care Solutions Calculator and run a quote today
 
Contact your LTC Sales & Marketing Team to learn more.
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Hybrid Long-Term Care Annuities Tackle the LTCi Catch-22

If you have older clients sitting on nonqualified assets — especially clients who may have difficulty qualifying for traditional long-term care insurance — there’s a smart strategy to help them get the protection they need, without incurring tax penalties or risking legacy planning.

For clients over 70, it can be a winning combination!

The LTC Catch-22 and How to Solve It
 
According to the Census Bureau, the fastest-growing segment of the population is adults age 85-100. Because of improved health care and medical technology, many are expected to live even longer. Unfortunately, while this portion of the population swells, few are holistically prepared for a long-term care event and the costs associated with it.
 
Many of them want long-term care coverage, but they can’t afford it, or they don’t qualify for it. Others are in denial that they would ever need it or are misinformed as to what coverage entails. Finally, some are hesitant to pay premiums for a policy they may never file a claim on.
 
Fortunately, many of the same individuals, those ages 70-85, could be ideal candidates for a Hybrid Long-Term Care Annuity.
 
The way the products are designed, the client will either use the long-term care benefit without incurring any tax penalties or, if they never have a long-term care event, can pass the death benefit on to a beneficiary.
 
Nonqualified Annuities and the Key to Protecting More Retirees
 
It’s well known that nonqualified deferred annuities are a popular solution for Americans planning their retirement because they offer tax-deferred growth and the opportunity to provide a source of income.
 
According to a Gallup Poll where nonqualified annuity participants were interviewed, 86% of people buy one for its tax-deferred accumulation. While some decide to annuitize their contract, most clients never do.
 
One of the things we train people to ask clients who have nonqualified annuities and don’t plan to annuitize them is ‘What would cause you to spend this money?’ It turns out 73% say it is an emergency fund, they do not need the income, it would be in case they need assistance.
 
The downside for many clients using their current, nonqualified funds for a long-term care event is that it can come at a hefty price with fees and taxes.
 
Tucked inside the Pension Protection Act of 2006 is a special exemption for those holding nonqualified annuities. The provision allows policyholders to make withdrawals for long-term care events (such as at-home nurse visits and live-in facilities) tax free. These withdrawals are also not counted as income but rather as a reduction of cost basis. The catch is that, because nonqualified annuities are a form of tax-deferred growth, only select products qualify. The exemption allows policyholders the ability to access the bases of the annuity rather than the growth, preventing a taxable event from occurring.
 
An Annuity Offering Hybrid LTC
 
While many annuities may carry long-term care provisions, few can touch the benefits that a true Hybrid LTC Annuity can offer.
 
That starts with an annuity’s easier underwriting requirements. I tell people looking for long-term care that underwriting is so much easier than on traditional policies.
 
Contact your LTC Specialists for more information on this opportunity.
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Expand Your Business By Pursuing This Key Target Market

The “younger” segment of the LTC Insurance market (people age 45-55) represents a great opportunity to expand your business.

But to be successful, it’s critical to understand their unique needs and concerns around buying coverage.

Doing so can help you to anticipate and overcome objections, present solutions more effectively, and ultimately, create more positive outcomes. Here’s a helpful strategy to follow:
 
Know Your Audience
 
Individuals in the 45-55 age bracket often understand the need for LTC planning, but have not purchased a policy because of perceived affordability issues and/or competing priorities such as future college expenses, retirement planning, or caring for aging parents.
 
The majority of LTCi sales are to people under 55. Your biggest challenge is creating the sense of urgency for them to take action sooner rather than later.
 
Anticipate Objections
 
When discussing LTC planning with younger prospects, you may hear:
  • “I’m too young to deal with this right now.”
  • “Currently, I’ve got other priorities to deal with.”
  • “I can’t afford to add another bill to my monthly expenses.”
Respond Effectively: Before you can overcome an objection,it’s important to acknowledge a client’s concern and show empathy. This demonstrates that you are actively listening to their needs and concerns, which will help to build trust, and ultimately, enable the client to feel comfortable about moving forward.
 
Move Toward A Decision
 
Buying LTC Insurance is not an all-or-nothing proposition. You can take advantage of the flexibility you have to adjust the policy design. Show plan options with a premium that fits their budget. Here are two sample responses that address common objections:
 
Why Now Versus Later: “I hear what you are saying about your competing financial obligations and priorities. Since coverage is often much more affordable when you are relatively young and healthy, delaying this decision can make buying coverage even more challenging later. Let’s explore a few alternatives that might help us take advantage of your current age and health.”
 
Too Expensive: “I hear what you are saying about the monthly premium and your current budget. The most important thing is to have some level of coverage, so that you don’t ignore the risk altogether. Let’s look at some plan designs that still provide a strong level of protection, but better fit your current budget.”
 
Did You Know?
 
The average length of an LTC Insurance claim is 2.85 years. So when the premium cost is the biggest concern, look at different policy designs with a 3-year Benefit Period, which can provide ample and very affordable coverage for the majority of clients.
 
Contact your LTCi Associates for more resources and materials to help expand your LTCi business.
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When Asset Based LTC Is A Fit

Most people will need long-term care services at some point during their lives, and the costs can be staggering.
 
Asset Based Long-Term Care offers your clients an efficient way to plan for these potential expenses with LTC coverage plus as well as a death benefit for cost recovery.
 
Four potential client profiles for Asset Based LTCi.
 
1 | Clients ages 40-80 with “sleeping assets” or cash, such as:
  • Cash, CDs or bonds that are maturing
  • Proceeds from selling a business
  • Funds from downsizing/ selling a home
  • A recent inheritance
CONCERN: Impact a LTC event could have on their spouse, family and finances
PAYMENT: Single Premium
 
2 | Clients ages 55-67 closing in on retirement who are:
  • In the peak of earning capacity with excess income for premiums
  • Preferably age 59.5 or older so they can access qualified money not needed for retirement income
CONCERN: The financial and lifestyle risks LTC expenses could have on their spouse
PAYMENT: 5, 10, 20-pay or pay for life
 
3 | Retirees with IRAs, annuities or income sources to reposition:
  • Required minimum distributions from IRAs not needed for income purposes
  • Annuities not needed for retirement income purposes
  • Social Security benefits not needed for living expenses
CONCERN: Protecting assets/ income and reducing LTC dependence on family
PAYMENT: 5, 10, 20-pay
 
4 | High earners not rich yet (HENRYs) ages 40-55 who:
  • Have excess annual liquidity
  • May have experienced providing care for a parent or grandparent
  • See the value of buying earlier rather than later
  • Would like to insure their parents for LTC to protect their own savings and retirement assets
CONCERN: Protecting assets/ income and reducing LTC dependence across generations
PAYMENT: 5, 10, 20-pay
 
Contact your LTC Sales & Marketing Associate today for more information.
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Are You Asking The Right Questions?

Bringing up the subject of Long-Term Care (LTC) Insurance is not always easy, but changes may have happened in your clients’ lives that make this the year to talk about LTC.

The annual financial review is a great time to discuss changes that may have occurred over the past year, and proactively plan in anticipation of events that may impact the success of meeting set goals.

Here are six easy questions you can ask to help get the conversation started:
  • Have you incurred additional expenses because a family member or friend needed care?
  • Have you needed to adjust your work schedule due to a family member or friend requiring supervision or assistance with activities of daily living?
  • Have you recently moved a parent or loved one into an assisted living facility or nursing home?
  • Have you recently become an empty nester?
  • Are you preparing for retirement?
  • Are you concerned with the government changes in healthcare and its inability to deliver a long-term care plan?
A ‘yes’ answer to one or more of those questions should help your clients realize that planning for an extended health care event with a long-term care policy makes sense. In fact, long-term care is not getting old or living in a nursing home – it’s about receiving the care you want, when you need it.
 
Proper planning will ensure your clients won’t have to depend solely on family or friends for unpaid care, or spend down most of their assets to qualify for government assistance. The benefits of a long-term care policy will help cover the costs of the care.
 
Long-Term Care Insurance provides security to families in the event of an untimely health event. Get the conversation started by asking your clients the right questions at their annual review. As a result, you may discover changes in health or planning opportunities based on anticipated needs.
 
Make certain your clients have the right LTC plan in place to meet their needs. Contact your LTC Sales Rep for more information.
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Home Care – A Compelling Story

There is a growing movement among health care providers that underscores something we in the Long-Term Care industry have known for years: helping chronically ill people receive the care they need while remaining in their homes is not only what people prefer, but can also be more cost effective than facility care.
 
Compassionate Care
 
According to an article in The Atlantic magazine, home based care is gaining traction as “a more humane, effective, and affordable health care system” than traditional nursing home care.
 
We understand that your clients want to maintain their independence. They want the freedom to make decisions about how and where they receive care.

While health and long-term care insurance differ in services that they provide, we believe that home care benefits are very important.

Today’s LTCi policies contain many benefits that will help your clients remain at home: access to a care coordinator, respite care to give volunteer caregivers a break, homemaker services, caregiver training, as well as extra funds to help pay for home modifications, medical alert systems or durable medical equipment.
 
These built in benefits are a compelling reason to purchase an LTCi policy, especially for high net worth clients, as they provide added peace of mind for family members.
 
Start focusing on the benefits instead of the premiums – call your LTC Sales Reps today for further discussion.
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Why You Need To Talk About LTCI

Most people envision themselves living a long life, investing and planning throughout their working years to create a financially secure future where they can enjoy spending time doing their favorite things.
 
As part of your client’s financial planning process, it’s important to understand the potential impact that needing long-term care may have on their assets, their family, and their future.

The reality is, as people start to live longer, the greater the likelihood is that your clients will require long-term care.

The costs associated with long-term care are significant.
 
While it can take decades to accumulate the assets they’ll need to retire comfortably, just a few years of paying for long-term care may threaten a lifetime of savings.
 
If you’ve ever been in a care-giving situation, you understand the physical and emotional toll it can take. While providing care to loved ones is an act of compassion, placing these burdens on spouses, children and other family members can create a significant emotional and physical strain, and is something that many people would like to avoid.
 
Don’t wait to address your client’s long-term care needs.
 
Incorporating Long-Term Care Insurance into financial plans today can help protect assets, reduce the burden of care that would otherwise fall on family members, and enable clients to receive care in the setting they most prefer, including their home.
 
Perhaps the greatest benefit: Long-Term Care Insurance allows loved ones to care about, rather than care for, each other.
 
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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Put The Power Of Storytelling To Work For You

You already know that quoting statistics doesn’t sell Long-Term Care Insurance. That’s because most people don’t see themselves needing LTC services, and using statistics to try to tell them otherwise will do little to convince them.

Barraging prospective clients with product benefits and features doesn’t work either. If they don’t believe they need LTC Insurance, touting all the bells and whistles of the product isn’t enough to make the sale.

So how do you get people to sit up and take notice? Tell them a compelling, engaging story about the positive impact an LTC policy had on someone’s life.
 
Find a good story.
 
Chances are you already have a story that will work for you. Draw on your own experiences. If you’ve ever had to care for a parent or grandparent, you know how difficult it can be.
 
Or you can use other people’s stories. A story doesn’t have to be your own. It can be just as powerful to share the experiences of family members, friends or clients.
 
Make it memorable.
 
When telling your story, paint a word picture. Don’t just describe what happened. Instead, talk about how it made you or the people involved feel.
 
Also, you need to make sure your story is relevant. A prospective client with no children probably won’t relate to a story about how difficult an LTC situation is on the kids.
 
Finally, don’t scare people. Make sure your story has a happy ending that comes about because of LTC.
 
Get your clients to share their stories.
 
According to a survey of LTC policyholders, 78% said they had a family member or friend who needed LTC services.
 
So your story may prompt prospective clients to recall stories of their own. Ask questions that invite them to talk about these experiences. Who knows, this might be how you get your next good story.
 
Here are five questions that will help you prompt clients to share their stories:
  • Do you know someone who needed Long-Term Care services?
  • Who provided their care? (Generally, a spouse or child is the primary caregiver.)
  • What effect did this have on the caregiver? On the family?
  • How did they pay for the care they needed?
  • What effect did this have on their finances? On their retirement plans? On the inheritance they hoped to leave for their kids?
For more sales ideas, contact your LTC Specialist today.
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Myth: Long-Term Care Is Just For Nursing Homes

Originally, the primary reason LTC Insurance was created was because it would help cover the high costs of a nursing home. But over the years, the policies have changed dramatically.

Now LTC Insurance is a comprehensive product that helps cover the cost of a variety services.

Consider the real-life Long Term Care example of Joe
 
He had helped care for both his parents for many years. So, he decided to purchase LTCi to help protect his family from the same responsibilities that he had with his parents.
 
Later in life, Joe developed an advanced stage of diabetes and several health problems occurred, including blindness and the amputation of his leg. His LTCi policy helped him stay at home by paying for renovations to his home, including ramps and grab bars.
 
The care coordinator helped walk Joe and his wife through the types of care he needed and provided a referral list of care providers in the area. His wife was able to receive caregiver training and a home health care nurse visits during the day while his wife is at work. LTC Insurance helped Joe stay in his home and have the care he needs.
 
There are many reasons to obtain Long-Term Care coverage, that can benefit both your client and their family.
 
To learn more, contact your Long-Term Care Specialists today.
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4 Ways LTC Insurance Provides Tax Advantages

When meeting with clients to discuss the benefit that a Long-Term Care (LTC) Insurance policy has on their overall financial plan, tax deductions might not be the first thing you emphasize, but should be one of your top five discussion points.

Taking the time to explain the tax advantages may provide the tipping point for clients who are hesitant about purchasing a policy.

Here are a few scenarios on how to approach each type of client:
 
The Client On The Fence
 
Many states offer a deduction or credit on paid LTC Insurance premiums, which can make purchasing coverage more attractive to your clients. For example, in the state of Ohio, residents are able to deduct the entire annual premium for their LTCI policies on their tax returns.
 
The Planner
 
If you are working with clients on their tax strategy, consider turning their tax refund into an LTC Insurance premium payment. It’s a great way to plan for the cost of the insurance and can make annual premium payments a non-event.
 
Business Owners
 
When a C-Corporation purchases a policy on behalf of its employees, and their spouses or dependents, the corporation is entitled to take 100% deduction as a business expense on the total premiums paid. If self-employed, clients can deduct 100% of their out-of-pocket LTC premiums up to the age-based Eligible Premium amounts*.
 
Current Policyholders
 
Clients who already have an LTC Insurance policy may not know about the tax deductions available to them. So during your annual review, be sure to educate them about a missed opportunity to take a tax deduction.
 
Contact your Long-Term Care Specialist today to learn more about the tax advantages of LTC Insurance.

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