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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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Profitable Prospects Lie In Multi-Life LTCi Sales

Multi-life LTCI continues to be one of the leading sales opportunities in the long-term care insurance marketplace today. Usually the hardest part of making a sale is finding the prospect, however, a multi-life prospect might be as simple as opening your client files.

Chances are, you already have clients who could be excellent contacts to expand your LTCI worksite business.

Look for existing clients who meet one or more of the following hidden multi-life triggers:

  • Owns a business or holds a professional occupation such as an attorney, physician, CPA or consultant
  • Holds a high level position or has influence in the executive decision making process
  • Runs a successful business that’s looking to offer more benefits to its employees
  • Could benefit from the tax incentives of purchasing LTCI with company dollars
  • Owns a business with employees who could benefit from discounts and possible underwriting concessions

Keep in mind that your best prospects may be organizations that are willing to pay some or all of the premiums for five or more policies.

Gaining multiple LTCI sales from a single contact benefits you, but what about your clients?

Not only are there a variety of carve-out benefits to choose from; there are additional benefits they should be made aware of:

  • Generally not subject to ERISA
  • Employer paid premiums are often deductible as an ordinary business expense
  • May qualify for reduced underwriting and discounts
  • Unisex pricing

To learn more about the multi-life sales opportunity, please contact your LTCI Sales Rep today.

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Asking The Tough LTC Questions

When you meet with your clients to fill out a Long-Term Care application you are faced with asking tough questions. At times, not all clients feel comfortable telling you which medications they are on or why, or how much they weigh.

As an agent, it is your job to be thorough when completing the application in order to get your client the best offer available.

Here are some tips on asking the tough questions:
 
Set the Stage
 
Let your clients know why you are asking these personal questions. You could say something like this:
 
“Mr. and Mrs. Client, you don’t have to be in perfect health to get Long-Term Care Insurance, but you do need to be in relatively good health. It’s my job to gather that information, so I need to ask you some questions about your current health and about any medications you may be taking.”
 
Get An Accurate Health Picture
 
Just as a doctor needs complete and accurate information to make a diagnosis, you need it to make the best recommendation for your clients. Encourage them to be completely honest and thorough when answering health questions.
 
Learn The Story Behind The Medication
 
The medications your client takes usually tell the story but you should dig deeper to find out what conditions a medication has been prescribed to treat. It is a good idea to familiarize yourself with common medications associated with uninsurable conditions.
 
Here are some common medications you should be familiar with:
 
  • Prednisone is prescribed for COPD and Rheumatoid Arthritis
  • Requip is prescribed for Parkinson’s Disease
  • Aricept is prescribed for Dementia
  • Avonex is prescribed for Multiple Sclerosis
Don’t Guess How Much Your Client Weighs
 
Ask them and remember to use build charts to assist you when filling out applications.
 
Lastly, it is smart to include a cover letter with the application stating information you learned about your client that may not have been required to disclose on application. This allows you to share more with the underwriter such as your client’s habits, lifestyle and what they are doing to manage current health issues. Remember, the more you can tell the underwriter about your client, the better chance for a positive underwriting outcome.
 
For more information on how to approach your clients about Long-Term Care applications contact your LTC Specialist today.
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8 Ways To Ease Into The Talk

Some of America’s most beloved and recognizable faces — Maria Shriver, Rob Lowe, Maggie Gyllenhaal, Zach Quinto, Angela Bassett and Jim Nantz — encourage having ‘the talk’ now versus later.

While the conversation is not exactly an easy one to have, a discussion of Long-Term Care planning with loved ones is something that should not be put off.

Don’t just have the talk about long-term care planning because of star power. Do it because 90% of American adults don’t currently have long-term care insurance. Do it because 70% of Americans will need some form of long-term care in their lifetime.
 
8 ways to get the conversation started:
  1. Be Open – Tell them that you’d like to talk about these issues and ask if they would mind talking about them – everyone thinks about these things and worries about what the future holds.
  2. Be Reflective – When you’re together, ask them about their past, their childhood, and their parents. Learn about them. Then move on to the future. What do they want most? How do they perceive the future? What worries them?
  3. Discuss Someone Else’s Situation – Chances are that you, your spouse or partner or your parents know someone who is already dealing with some aspect of aging or long-term care. Talking about what’s good or bad about their situation can be a starting point.
  4. Mention an Article or Website – Give them a clipping, or link to information about planning ahead, family conversations, long-term care costs, and move forward from there.
  5. Ask for Advice – This is a great way to get the discussion rolling. Tell them that you’re starting a retirement account or preparing a will and ask for advice. Then ask how they planned ahead and if they feel fully prepared.
  6. Grab an Opening – If, for example, your mother is talking about a family member who’s in a nursing home, and says, “I don’t see how she can stand it,” ask her what she means. What would your mother want in the same circumstance? If you miss the chance, bring it up another time soon – “Hey Mom, remember when you said you couldn’t stand to live in a nursing home…”
  7. Write – If you find the whole conversation thing too daunting – write a letter or e-mail outlining your concerns and what you would like to discuss. This technique can be particularly helpful if you live far away, or otherwise have only a bit of time on the weekend to attempt this type of conversation. By writing, you pave the way and get them to start thinking about it before you get together.
  8. Get Help – Maybe you have a sibling who is more at ease talking with your parents. Maybe your parents are more comfortable talking to someone else in the family about finances or health. Don’t be offended. As long as long-term care planning gets done, all will be good.
We’re here to help! Contact your LTCi Sales Reps for support.
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3 Simple Steps To Generate More LTCi Leads

While educational seminars or direct mail campaigns are good lead generation tools, these campaigns can be costly and usually take time to yield considerable results.

So how can you build momentum and grow your Long-Term Care Insurance business without breaking the bank?

Follow these 3 simple steps:
  1. Identify price-sensitive consumers in your client/prospect database who are currently on the fence. While these leads may have grown cold, the introduction of an affordable price point could warm ‘em right up.
  2. Schedule a brief meeting with each of the prospects you’ve spoken with in the past, to discuss the type of plan that would meet their needs and budget concerns.
  3. Use tailored needs-based marketing and support. You stand a better chance of shortening your sales cycle and generating new business.
Make certain your clients have the right LTC plan in place to meet their needs.
 
Contact your LTCI Sales Rep for more information.
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Honoring The Last Wish: The Realities Of LTCi

“What’s your plan?”
 
That’s the question we encourage agents to ask their clients – because when there isn’t one, the consequences can be heartbreaking.
 
The New York Times article referenced below addresses the realities of what can happen when there is not a plan in place – through the tragic struggles involved in trying to honor a man’s wish to die at home.
 
It documents the various requirements of the healthcare system, including Medicare and Medicaid, that can make it nearly impossible to get in-home care.

When you read the story of Joseph Andrey, think about the impact you can have on someone’s dignity of life.

You have the opportunity to make sure this does not happen to any of your clients.
 
Access the New York Times Article: “Fighting To Honor a Father’s Last Wish: To Die at Home” here.
 
A comprehensive long-term care insurance policy will cover home care, adult day care, hospice, as well as, assisted living and nursing home. It also provides the insured with the dignity and independence to choose where they get their care.
 
Please contact your LTC Specialist to discuss how we can help you make a difference in your client’s lives – to design a plan that is both affordable and the best solution for your clients’ needs.
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A Fresh View On The LTC Insurance Market

Learning how to adjust to the changing market is crucial to the continued success of your Long-Term Care (LTC) Insurance business.
 
Today’s market reflects an expanding, diverse clientele, so being able to respond to their unique needs and budget constraints is critical. The first step is to understand their concerns around buying coverage, including potential objections about the cost of a policy.

Adapting your approach to the new market will not only demonstrate that you are responding to changing trends, but will ultimately help to increase your LTC Insurance business.

3 important concepts to consider:
Who Should I Target?
 
The “younger” segment of the LTC Insurance market includes 45-55 year olds. And while they may understand the need for LTC Insurance, many have competing financial responsibilities, and feel they don’t have the disposable income to spend on a policy. Your challenge is to create a sense of urgency about the importance of applying when they are younger and healthy, and show them there are affordable ways to access LTC Insurance coverage.
 
How Can I Help My Clients?
 
Your clients may not know that they have a surprising amount of flexibility when designing LTC Insurance coverage. Buying a policy is not an all-or-nothing proposition. If you start with a policy design that addresses 100% of your clients’ anticipated future care needs, you can offer alternate designs to help lower the premium, if necessary.
 
For example, suggest shortening the Benefit Period to 3-5 years to save money, while providing ample coverage for most care needs. Leaving off compound inflation protection can also make a big impact, potentially cutting the premium in half. With this strategy, consider other alternatives for inflation protection or a higher initial daily benefit to account for future cost of care.
 
What Can I Do To Succeed?
 
One of the characteristics of the new market is that the public is more aware of the need to plan ahead for LTC. They are open to having long-term care planning discussions, and will welcome your guidance. Take a proactive approach and make it a priority in your practice to initiate LTC planning discussions with your clients by age 50.
 
By connecting with your clients, emphasizing the value of LTC Insurance protection, and showing that coverage can be adjusted to meet their budget, you will demonstrate that you have their personal needs in mind and are on top of the latest product offerings. And, that is a recipe for success for years to come.
 
Contact your LTC Sales & Marketing Associate today for more resources and information.

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Using Caregiver Contracts To Leverage Your LTC Sales

A caregiver contract is when relatives are hired to take care of their disabled or aging family members. It is usually drafted by an attorney and specifies the caregiver’s duties and the length of contract (usually the elder’s lifetime). Caregiver payment can be made either in lump sums or installments.
 
How Does Long-Term Care Get Thrown Into The Mix?
 
Purchasing a Long-Term Care (LTC) policy is one way to pay the compensation promised in a caregiver agreement.
 
Please note: Many LTC Insurance policies do not allow a relative to be hired directly as a caregiver, it is important that the policy have a cash benefit.
 
Once an individual triggers benefits, the insurer pays out the cash benefit regardless of who the caregiver is. A full cash benefit will provide the same benefit.
 
It is important to discuss these planning options with current and prospective clients. An agent who knows about LTC planning as well as insurance may be seen as more knowledgeable about the options available.
 
To learn more about caregiver contracts and how to incorporate them into your sales, contact your LTC Specialist today.
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Approaching LTCI For Couples With No Children

The need for long-term care does not discriminate. No matter what your income is, your marital status, or any other demographics that come into play – when you need long-term care, you need long-term care.
 
Clients with families and children typically consider themselves to have a “default” caregiver, someone who will always be on call if they were to encounter a long-term care situation. But what about your clients who do not have any children? How do they approach their need for long-term care?
 
Although couples may face the same long-term care risk as families with children, their situation may create a different set of challenges.

Not having a “default” caregiver in the form of a child can force your clients to think creatively about their long term care strategy.

Ask your clients, how do they want to live their life?
 
Living life without children opens up new possibilities and introduces some unique challenges. They may have more freedom to delve into their career and explore their interests. Yet, they may need to put more thought into long-term care than people with kids.
 
They could have a heightened need for professional assistance, since an adult child won’t be “on call” when and if they need help. And, if they’re part of a couple, they might bear a greater part of the work of providing care than they would if they had children.
 
Accidents, chronic illness, or simply the effects of aging could all result in a need for long-term care in the future. That’s why it’s important for everyone to take steps to preserve their quality of life and financial assets as they age.
 
We’re here to help you design a plan that is both affordable and provides the best solution for your clients’ needs. Contact your LTCI Sales Rep for guidance.
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Profitable Prospects Lie In Multi-Life LTCi Sales

Multi-life LTCI continues to be one of the leading sales opportunities in the long-term care insurance marketplace today. Usually the hardest part of making a sale is finding the prospect, however, a multi-life prospect might be as simple as opening your client files.

Chances are, you already have clients who could be excellent contacts to expand your LTCI worksite business.

Look for existing clients who meet one or more of the following hidden multi-life triggers:
  • Owns a business or holds a professional occupation such as an attorney, physician, CPA or consultant
  • Holds a high level position or has influence in the executive decision making process
  • Runs a successful business that’s looking to offer more benefits to its employees
  • Could benefit from the tax incentives of purchasing LTCI with company dollars
  • Owns a business with employees who could benefit from discounts and possible underwriting concessions
Keep in mind that your best prospects may be organizations that are willing to pay some or all of the premiums for five or more policies.
 
Gaining multiple LTCI sales from a single contact benefits you, but what about your clients?
Not only are there a variety of carve-out benefits to choose from; there are additional benefits they should be made aware of:
 
  • Generally not subject to ERISA
  • Employer paid premiums are often deductible as an ordinary business expense
  • May qualify for reduced underwriting and discounts
  • Unisex pricing
To learn more about the multi-life sales opportunity, please contact your LTCI Sales Rep today.

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