The Genworth CLTC Sales Model
Making Long Term Care Sales SIMPLE
Presented by:
Robert Burke, RVP
Genworth LTC
Lets make this Simple…
See the Client
Impart the Risk
Make a Plan
Present the Plan
Look at Benefits
Examine Underwriting
See the Client
a 2004 LIMRA study of buyers
In
and non buyers
Only 30 % of the people who received info in the mail
used it in combination with other info to buy LTCI
Another 53% who received info by mail decided not
to buy
The remaining 17% were still deciding.
Impart the risk
Establishing a plan for long-term
care: The 3-step process…
1. It must be established beyond a reasonable doubt that
the client believes he may live a long life and when he
does he may need care.
2. It must be established beyond reasonable doubt that
the client understands the impact providing care will
have on his family and best thought out retirement
plan. This allows for the drafting of a plan.
3. It must be established beyond a reasonable doubt that
nothing will pay for that plan except LTCi
Step One:
Establishing beyond a reasonable
doubt that the client may live a
long life and very well may need
care.
Everyone in this room…
Believes they will live a long life
Period
Your clients believe they will live a long
life also. That’s why they make you
promise not to outlive their life savings
When you don’t die…
You live
When you live, you get old
When you get old you get frail
When you get frail you get sick and need care
If the client argues this point
there can be no possibility of
putting together a plan for care
and protecting it with LTCi…
Leave immediately
Step 2:
Establishing beyond a reasonable
doubt that long-term care is a
family issue therefore requiring a
plan to protect the family…
Why do people buy Long Term
Care Insurance?
New thinking…
Long-term care has nothing to
do with your client…
It’s a family issue…
The question is not who will take care of your client,
his family will, but rather what providing that care will
do to his family and finances
Families provide the majority of care. “Family” is
defined as children which often means the daughter
Caregiver stress results in severe tension between the
siblings because the responsibility is not shared
equally
Long-term care rarely brings families together, it tears
them apart
LTCi never replaces what families
do. Rather it builds on an existing
infrastructure of support thus
allowing the caregivers to provide
the care better and longer
Children don’t want to take care of their parents but will
because they love them and are concerned for their
safety
Suggesting that they will provide care if necessary only
reinforces your credibility and allows for a discussion of
what LTCi really does…
It allows them to provide the care better and longer by
paying for the type of services children find the most
embarrassing and difficult to perform
What the professional has just done is get the children
off the hook and turned them into proponents of LTCi.
Many will even pay for the cost
Step 3:
Establishing beyond a reasonable
doubt that nothing will pay to
protect that plan except LTCi
“You have made it clear that the principal must
be preserved because of the possibility of
something happening in the future.”
“We will use those assets to generate sufficient
income at retirement. When combined with
social security and pension benefits, it will allow
you to sustain your pre-retirement lifestyle as
well as keep prior financial commitments.”
Up till now those assets have
been protected by insurance
which allows them to be available
for retirement…
LIFE
Homeowners Insurance
Ex) $750,000
Home, Car, Cabin,
Health Stocks, Bonds, Life Auto
Insurance Cash Value,
Annuities
Good Health
Long Term Care
You’ve allocated assets and
created income for
retirement…
What income or assets have
you allocated to pay for
long-term care?
Not doing so means the client
has to rely on a government
program or use retirement funds
to pay for care
Step Three – Funding Options - or Are They?
Medicare - Health Ins. For: Medicaid: Health Ins.
Skilled Care Program Based on Financial
Rehabilitative Services
Need
Skilled Home Care
Will Medicare Pay for Custodial Will Medicaid Pay for Custodial
Care? Care?
Home Care: No Home Care: *Yes
Adult Day Care: No Adult Day Care: *No
Assisted Care Living: No Assisted Care Living: *No
Nursing Home Care: * Skilled Nursing Home: Yes
* A Portion up to 100 Days of * Most States Have a Home and Community Based
Program That Makes Limited Funds Available to
Care and Only for Skilled or Keep People in the Community. Services Are
Linked and Accompanied by Long Waits. No Elder
Rehab Services Law Attorney Will Tell a Client That This Program
Is a Viable Way to Pay for Care.
Step Three – Funding Options?
“I’m a Veteran. The VA Will Pay for My
Care…”
The VA will only cover 100% of your expenses
if the cause of your care need is directly related
to a service injury
In 2001, the Federal Long Term Care Insurance
Program Was Launched, Recognizing That the
VA Does Not Offer Comprehensive Long Term
Care to Most Beneficiaries
¹ GAO Report: VA Health Care: Better Data Needed to Effectively Use Limited Nursing Home
Resources, Hrd-97-27, 1996
Self funding the cost of
long-term care…
“I read in Consumer
Reports that my clients
don’t need LTCI if they
have $1,000,000 or more”
I Have I Have
$500,000 $1,000,000
Income for remaining Spouse Income for remaining Spouse
Find Nurses Find Nurses
Hire Nursing Assistants Hire Nursing Assistants
Schedule House Cleaning Schedule House Cleaning
Buy Groceries Buy Groceries
Cook Meals Cook Meals
Schedule and transport to adult Schedule and transport to adult
daycare daycare
Install a ramp and grab bars, Install a ramp and grab bars,
widen doorways, buy a hospital widen doorways, buy a hospital
bed bed
Please don’t confuse having money with getting old, getting sick, and
needing care. They are really two completely different things
“I’ll give my money to my
kids.”
In the final analysis LTCI, like any
other type of insurance protects a
plan. In this case it allows your
client’s retirement plan to execute
for the purpose for which it was
intended:
Retirement, not paying for
long-term care
Make a Plan
(Plan design rules)
1. Buy what you know
1. Insure 80% of the cost of a Nursing Home
2. Buy Compound Inflation Protection for clients under 70
3. Buy best home care available
4. Zero Day Home Care Benefit is a must
Benefit Analysis
Benefit type Average stay % of claims
Nursing Home 1079 Days 11.2 %
Assisted Living 721 Days 10.6 %
Home Health Care 523 Days 77.9%
Make a Plan
(Plan design rules)
1. Buy what you know
Insure 80% of the cost of a Nursing Home
Buy Compound Inflation Protection for clients under 70
Buy best home care available
Zero Day Home Care Benefit is a must
2. Buy as much of what you don’t know as you
can afford
Present the Plan
(Privileged Choice Shared)
6
4 4
Built-in Joint Waiver of Premium
Built-in Survivorship Benefit
8 6
No Claims Offset Compounding
No Claims Offset Compounding
Without Claims vs. With Claims
Benefits May Last Longer with Privileged
Choice® This example assumes 100% of the monthly maximum benefit is paid
continuously until all benefits exhausted.
Not Reduced by Claims Paid
Present the Plan
(Privileged Choice Shared)
6
4 4
Built-in Joint Waiver of Premium
Built-in Survivorship Benefit
10
8 6
No Claims Offset Compounding
4
By the Way…..
Standard Health
Apples to Apples Benefits
Husband and Wife Same Age
Monthly Benefit: $4500, 90 days-Zero Day Elim Home Care, Compound
Age Genworth
8 YR
Genworth
10 YR
Met VIP II John
Hancock
50 $3150 $3,420 $5,002 $4,088
55 $3,330 $3,600 $5,418 $4,438
60 $4,140 $4,680 $6,836 $5,419
65 $5,580 $6,390 $9,166 $6,802
Simplicity of Story
Simplicity of Plan Design
Look at Benefits
Nursing Home
Assisted Living
Home Health Care
Facility Choices for Aging Relatives
Assisted living facilities: Residential care
setting with minimal care needs
Skilled nursing facility: Medical and
substantial physical care needs
Alzheimer’s facilities: Specialized care
Hospice care: In home or facility-based
Bed reservation benefit
Not just for Nursing Home Care:
Today’s long term care insurance is more than nursing
home care coverage; it can also cover you in your home
and community, using benefits such as:
Nurses, Nursing Assistants and Therapists
Informal Caregivers
Homemaker/Chore Services
Assistance with shopping, housekeeping, chore
services and meal preparation
Home modifications
Adult Day Care and Hospice
Alternative Plan of Care
*These services not available in all states.
Additional Features To Look For
Monthly Benefit
Waiver of Premium
International Coverage
Survivorship benefit
Couples, good health discount
Care Coordination
The Care Coordinator
Provides the Plan of Care Coordination With Providers
Care Referral Counseling
Care Coordinator
Monitoring of Coordination With
On-going Free Services
Services
Is a Licensed
Health Care
Practitioner
(LHCP)
Examine Underwriting
Set a Timetable
Today we will do an application
The company may request medical records or health
interviews
Once a policy is issued we will sit back down and
make the final evaluation of putting this plan in place
At that time you will have 30 days to free look the
policy
So lets make this Simple…
See the Client
Impart the Risk
Make a Plan
Present the Plan
Look at Benefits
Examine Underwriting
Selling to Younger Couples
(Sales idea of the day)
Aging Demographic
Population by Age and Sex: 1990 and 2000
Age
100+
95-99 Male Female 1990
2005
90-94
85-89
Long Term Care “Sweetspot”
80-84
75-79
70-74
65-69
60-64
55-59
50-54
45-49
40-44
35-39
30-34
25-29
20-24
15-19
10-14
5-9
12 10 8 6 4 2 0 2 4 6 8 10 12
“It’s Not Affordable”
Forbes Study1 Indicates Prices Consumers Are
Willing to Pay For Long Term Care Insurance:
Ages 40-49: $1,000
Ages 50-59: $1,305
Ages 60-74: $2,100
Price Points Maximize Willingness to Buy
1. Forbes Consulting Group, January, 2005
What We Have Learned
Benefit Exhaustion Daily Benefit Utilization
12.0% NH = Nursing Home
90 85
% Daily Benefit Max Used
80
% Exhausting Benefits
ALF = Assisted Living Facility
9.7% 80
10.0% HHC = Home Health Care
8.0% 70
8.0% 60 55
5.1% 50
6.0%
40
4.0% 30
1.5% 20
2.0%
10
0.0% 0
NH ALF HHC
rs rs rs rs
2Y 3Y 4Y 5Y
Benefit Period Benefit Type
For Policies With 3-year Benefit On Average, Our Claimants
Period, Only 8 in 100 Claimants Utilized 55% of a Daily Benefit
Exhausted Their Benefits 1 Maximum for Home Health Care2
Consider Alzheimer’s Family History
1. Long-Term Care Claims - Milliman, April, 2005
2. Claims Utilization Data - Genworth Financial
2 Strategies for Plan Design
One and Done Stack the Coverage
Buywhat you need and what you Buy a first chunk today based on
can all at once based on affordability with the Implicit
affordability understanding that a second
policy will be necessary to offer
adequate coverage in retirement
Usewith current or near-retirement
people who know or have a fairly Plan purchase of second policy
good idea what their income will be when offer as a group at your
during retirement employment or near retirement
when income and retirement
expense estimates are more
accurate
Buying a quality individual policy
first gives the client the Cadillac
in the garage and makes the Ford
more of a utility plan
Value of early retirement planning
Goal: 4 yrs of coverage $9,000 MB at retirement (65) from age 45 starting today
Waiting to Buy at Retirement Stacking Coverage
$70,000 $70,000
Annual Annual
Income Single policy Income Stacking allows
purchase will this to only
consume 12.5% consume 4.2%
of the of the
retirement retirement
income. income
$8,712
Annual 1 policy bought 1stpolicy bought
Premium at 65- 4yr, $9,000 at 45- 4yr, $3000
MB $1452 2nd
MB
2nd policy bought
Premium
$1488 1st
Premium at 65 – 4 yr
$1,500 MB
Overview Plan Design Parameters
Buy What We Know
1. In the end your plan should cover about 80% of the average NH
cost in their area – Stacking allows us to catch up or slack off
2. Look at home care desire and position the first policy as the Quality
Home Care with Informal Care giving and Quality Care Coordination
Benefits
3. Always utilize Compound Inflation with this group
Buying what you don’t know
1. Consider utilizing experience supports of 3 or 4 -Year Product
2. Consider Smaller Shared to cover 1st risk with Cadillac coverage knowing
the assets are there for the 2nd spouse
Use Simplicity & Affordability To Help Grow Your Business