Title: Successful Long Term Care Planning Discover the Missing Piece: Developing Need
1Successful Long Term Care PlanningDiscover the
Missing Piece Developing Need
- Rose Clayton, CLTC, CSA
- Manager, Long Term Care Sales Marketing
- CPS Insurance Services
2AGENDA
- Beliefs (Yours Your Clients)
- Why is Long Term Care a Problem
-
- The Path of Discussion
- Asking Questions ListeningAsking More
QuestionsListening - When and how to show the illustration
3What Do YOU Believe About Long Term Care
Insurance?
- Its too expensive
- My clients just dont think they need itthey
may never use it - Its very complicated
- I dont understand it well enough to explain it
to my clients - I dont want to embarrass myself in front of my
clients - Im too busy with my other products
- I cant cope with the objections
- I dont have my own policy
4Whats Going On in Your Clients Heads?
- They think long term care means Nursing Home
- They dont want to think about getting old or
losing their independence one day - They dont like to be shaken from their DENIAL
and they dont want to think about it NOW - They dont want to pay for a risk that seems so
far away or that they may not need - They dont like being responsible for it. Its
more comfortable to think about somebody else
taking care of it for themlike their spouse,
kids, other family, friends, neighbors, the
Government, or God - They dont know what care could cost them now or
in future - But they think they probably will have enough
money to pay for it if it happens
5Why is Long Term Care a Problem? "Will you
still need me, will you still feed me, when I'm
64?"
- -
Lennon and McCartney When The Beatles
released "When I'm 64" back in 1967, 64 years was
about as long as most Americans were expected to
live. In 1900, the average life expectancy for
Americans was 47.3. Today it's 77.9.
6Life Has Changed. Were Not Dying Like We Used
To.
- Increased Life Expectancy
- Born in 1900, your life expectancy was 47
- Born in 2000, your life expectancy is 77
- By 2035, there will be 57 million Americans over
the age of 70 - The fastest growing segment of the U.S.
population is age 85 and older - Rapid Advances in Medicine
- Acute infections, diseases, accidental injuries
are no longer deadly - Within next 10 years, experts predict cancer will
be classified as a chronic illness manageable
with new classes of drugs - Chronic and Degenerative Conditions
- As medical breakthroughs extend and improve
lives, more individuals are living longer with
chronic illnessesarthritis, heart ailments,
stroke, diabetes, dementia - For others who have been healthy, the normal
aging process prevails. The healthier youve
been, the longer you live.
7When You Dont Die
- You live
- When you live, you get old
- When you get old, you get sick
- When you get sick, you need care.
- Harley Gordon,
- Founder, Corporation for Long Term Care
Certification
8- Lets face it. If we live long enough, its
going to happen to most of us.
9But its not all bad. This long life gives us
unprecedented opportunities.
- Another whole life is available in retirement
- Your grandchildren have you longer
- You are able to continue your commitment to the
community - To live longer and healthier than our ancestors
10Living a Long Life is a Near Certainty.
Planning For It is a Necessity.
- The Path of Discussion with your client is based
on the following 3 sequential steps - Establishing the need for long term care planning
because of longevity - 2. Understanding that Long Term Care is a Family
Issue - 3. Realizing that their savings or Retirement
Portfolio is the only thing that will pay for care
11Use a Fact Finder
- Establishes credibility by focusing on a plan,
not the sale of a product. - Helps to qualify your clients both financially
and physically. - Enables you to understand your clients personal
experience and family situation. - Gathers the necessary information to design the
plan with the features and benefits that match
your clients needs.
12Asking the Right Questions Has Two Purposes
- Helps you understand your clients concerns,
emotions and feelings. - Establishes your clients reasons for purchasing
long term care insurance. -
- People are silently begging, Dont try to sell
stuff to me. Listen to me, value me, understand
me, and let me know that you want to help me. -
Integrity Selling for the 21st
Century -
Ron Willingham
13Begin with Fact-Finding Questions
- Jim, Im prepared to talk about long term care
planning, which we discussed on the phone (in our
earlier meeting). If you could give me your
perspective (thoughts) on that, we can focus the
meeting on what interests you. - Before I got here today, you probably had a
conversation about long term care. Would you
share your thoughts with me? - When you hear the words long term care, what do
you think of? - Have you had any prior personal experience with
someone who needed long term care? What happened?
Who provided the care? How long did the illness
last? What effect did care giving have on your
family? Who paid for the care?
14Personal experience is important. If theres
been none, ask
- What have you heard about it?
- Why are you interested?
- Why do you think you might want long term care
insurance? - Ive had an experience and I want to take a
moment to share with you the impact it had on my
family. - (If you have not had a personal experience, use a
clients or someone you know - BUT IT MUST BE REAL AND TRUTHFUL)
15Long Term Care Is Not A PlaceIt is a continuum
of care, housing, and services people and their
families may need because of a disability or
chronic illness. Its assistance with everyday
activities of daily living or supervision due to
a cognitive impairment. The goal is, whenever
possible, to have the individual age in place.
16Step 1 Establishing the need for LTC because of
longevity
- LTC is a problem today because people are
living longer. Wouldnt you agree? If you take
reasonably good care of yourself, you are likely
to live a long life. Even if you dont take care
of yourself some new medicine or procedure is
likely to be developed that will extend your
life. When you live a long life you could need
care. - Could this happen to you?
17Dont Assume AnythingListen to what your client
says
- It is absolutely important that your client
agrees that he /she will live a long life and
when they do live a long life, there is a
reasonable likelihood that they will need care. - Never assume that the client understands. Listen
to what they say. Do they mean it? - After they agree, askThe question is not who
will take care of you, but rather what will
providing that care do to your family and your
retirement portfolio? -
18More Fact-Finding Questions
- Is it important for you to maintain your
independence in the community without placing a
burden on your family? - Are you concerned that a chronic illness will
threaten your commitment to continue to provide
for your spouse? - Is it important to control the quality of care
that you receive and where it is delivered? - Is it important to preserve your assets and
income? - Will you have a continuing financial obligation
to any of your children or grandchildren that
have personal problems or are physically or
mentally challenged? - (For Second Marriages) Is it important to
distribute your assets to your children according
to your will or prenuptial agreement?
19Increase the volume of information from your
client
- Once the topic is on the table, help your client
think by probing deeper - Tell me more about
- Would you elaborate on
- Give me an example of
- What else should I know about
- What else would help me understand
- Believe that the sale is being made when the
client speaks about the need. Not one moment
is wasted. -
Socratic Selling -
Kevin Daley
20Bridge to Personalizing Need
- If you live a long life and need care, what is
your plan? - If something happened today and you needed help,
what would your concerns be? Whats your plan? - Have you thought about who would take care of
you? - Have you thought about the impact providing for
your care could have on your retirement
portfolio? - Are you comfortable using your own income,
assets and resources to pay for long term care
expenses?
21Personalizing Need
- What income and assets have you allocated to pay
for your long term care plan? - Is it important to preserve your principal?
- Is it important to preserve your income?
- Where do you want your care to be delivered?
- Have you discussed long term care planning with
your children?
22Step 2 Understanding that Long Term Care is a
Family Issue
- It has little to do with your client. Its about
their Family. - Who suffers? The familymostly the spouse or
adult child. - Patient is taken care of by family, which
struggles to provide the care necessary to keep
their loved one in the community. - Caregivers suffer from stress related illnesses
and can become as chronically ill as the patient. - This effort exacts a terrible price on the
caregivers health and relationships with other
family members, usually siblings who do not
equally share the burden. - Long term care rarely brings families togetherit
can tear them apart. - The illness runs the family.
23Asking more questions
- What impact do you think long term care would
have on your family? - Is it an option for your family to take care of
you? - What kinds of things do you envision your
children doing for you? - Which of your children will be available to care
for you? - Where do they live? Will they be able to move
to help take care of you? - How could the financial and emotional burden of
a long term care situation affect the
relationship between your children? - Would your daughter/son have to take time off
from work? How would that affect your childs
family?
24Step 2 Understanding that Long Term Care is a
Family Issue
- When you live a long life and need care your
family will do everything in their power to keep
you out of a facility. - If the client is married look at his spouse
and ask - If your husband needed LTC would you do
everything that you could to keep him out of a
facility? - If you need care your wife will take care of
you, but there is a cost to that care. Think of
it this way. She will be under a tremendous
amount of stress being your caregiver. What will
that stress do to her? How will that stress
affect her health? - Whats your plan to protect her?
25Step 2 Understanding that Long Term Care is a
Family Issue
- Your children will do everything in their power
to keep you out of a facility. What effect will
that have on their lives? - What effect will the stress of care giving have
on their health and the relationships that they
have with their families? - What effect will the stress of care giving and
decision making have on their relationships with
their brothers and sisters? - Whats your plan to protect your children and
grandchildren?
26Your Client Begins to Realizeits not about me.
Its about my family.
- It is important that your client agrees that
living a long life and needing care will have
serious consequences to his family. - Never assume that the client understands. Listen
to what they say. Listen for their sincerity. - Long term care insurance is not sold to
individuals. Its
sold to families.
27Selling LTC Insurance Is Not Much Different Than
Selling Life Insurance
28Care Coordination a HUGE Benefit to Families
- Care Coordination is the professional service
that brings the help when you need it most to
the policyholder and their family in the
confusing, often overwhelming time that care
begins. -
- Professional Care Coordinators are licensed
health care providers who are independent of the
insurance company and local to the community. - A personal Care Coordinator acts as an advocate
for your client and works with them and their
family directly to develop a plan of care,
identify care providers, provide advice about
resources, provide assistance with claim forms,
and help with implementing care and monitoring it
as needs change over time. - This valuable component is part of the policy at
no additional cost. - It's the main reason people receiving care are
able to stay at home and maintain their
independence for as long as possible. - And it's often what motivates wealthy people to
buy a long term care policy. -
29Step 3 The Retirement Portfolio is the Only
Thing That Will Pay for Care
- What have you allocated from your retirement
income and portfolio to pay for your plan of
care? - It is here that client may jump to the conclusion
that they can self-insure. Discuss the
following - How inflation will effect LTC costs in the
future. - How taxes and capital gains will be added to the
LTC bill. - Loss of investment opportunity.
- Preservation of principal.
-
30What Does Care Actually Cost in Todays Dollars
and What Will It Cost In the Future
- Today, average cost 75,000 per year
- In the future, at a rate of 5 compounding per
year, cost will increase to - 150,000 per year in 15 years
- 300,000 per year in 30 years
- Assuming most LTC claims likely to last between
3 5 years - A 55-year old will need to have between 900,000
to 1.5 million dollars set aside by age 85 to
pay for anticipated long term care costs for one
person, if they dont want their lifestyle to be
adversely impacted by the cost of their care.
They will need an equal amount set aside for
their spouse. - Where will the money come from?
-
31Client Has Protected Principal and Assets Their
Whole Life
32LTC Insurance is Life Insurance for Retirement
PortfoliosIts risk management.
- Life Insurance protects Principal.
- LTC Insurance protects Principal.
33Step 3 Nothing will pay for care except
Retirement Portfolio
- When you consider your option to self-insure, do
you feel that if you had to pay for care that you
would be able to continue to provide for each
other? Would you be able to stay at home and
still have that feeling of security? Would you
be able to keep the same lifestyle that you have
today? - What commitments do you see yourself carrying
into retirement? - (Spouse, Children/Grandchildren, Church)
- What are your passions that you plan to pursue
when you retire? - (Golf, Travel, Time with Family and
Friends, Hobbies)
34Step 3 Nothing will pay for care except
Retirement Portfolio
- When you retire, do you intend to live on your
principal or your income? - Would you like to pay for your care with
principal or interest? - If I could show you a way that you could receive
your care with tax free dollars and also control
the quality of care and where it is delivered
without burdening your family, would you be
interested?
35- When and How to Show the Illustration
36Show How a Policy Works
- This is how a LTC policy works.
- Its very simple. There are 4 things we will
choose - 1. Daily Benefit how much per day will the
policy pay - 2. Benefit Duration how long will the policy
pay - 3. Elimination Period a Time Deductible
- 4. Inflation Increases how we make the
benefits in the policy grow to keep pace with the
increasing cost of care in the future -
37Always Explain Inflation Increases - Go to
Inflation page
- Compounding Interest Accumulates TAX-FREE
BENEFITS - Show how todays 292,000 pool of with 5
compounding - can grow to 608,820 in 15 years,
- and 1,264,360 in 30 years.
- All available to be used TAX FREE for long term
care expenses
38The Break-Even - Do this on a legal pad
- This shows how the investment in long term care
insurance will be - recouped quickly when client receives their care
- Example
- Annual Premium - 2,142
- Number of years paid x 30
-
64,260 - Divided by daily cost of
- care in 30 years 866/day
75 days -
- You only need to receive care for about 2 ½
months - to break even on the premium dollars you invested
39Cost-to-Benefit Value - Do this on a legal pad
- This shows how long term care insurance is
costing pennies on the dollar -
- Example
- Annual Premium - 2,142
- Number of years paid x 30
-
64,260 - Divided by value
- of benefits in 30 years 1,264,360
5.1 cents paid for every dollar of benefit -
- Who wouldnt want to do this as a part of
- their sound financial planning?
40Objections
- Objections are a predictable part of the LTC
sales process. The truth is there are no silver
bullets. The idea of handling the objection is
to get inside the clients head to understand why
they said what they just said. Always agree with
them by acknowledging that their objection is
valid. And then, question why they feel that way.
41- I need to think about it.
- Well, you know thats fineI understandthis is
a difficult decision for some people. So what
youre saying is that remaining self-insured may
still make more sense to you than having
insurance? - Yes maybe.
- With all due respect, why do you feel that way?
- I just dont think I need it right now.
- I understand that right now you dont think
youll need long term care so why pay for the
protection. But may I ask, when will you know
that youll need it? - Well I guess I wont know until I do need it.
- So you are willing to take the gamble that you
would be wrong at a potential cost of hundreds of
thousands of dollars, when you can transfer the
risk for pennies on the dollar and not have to
worry about it?
42- Im never going to need it
- Oh, so you are one of those who adhere to the
Plop Method. - (with a bewildered look) What is that?
- So you think that youre going to get to be 85,
90 or 95 and youre just going to go plop
dead? - Oh yes, thats exactly what I want.
- Well, how many of your family or relatives or
friends has that worked out for? - (Client will probably acknowledge that its not
very many) - I recommend that you plan for something other
than plopping.
43- I dont want to pay for insurance that I may
never need - I understand that nobodyincluding me--ever
plans on needing long term care and its natural
to not want to spend money on the insurance. But
may I askwhen was the last time you got out of
your car and said, boy, I didnt use my car
insurance todaythat was a waste! - I will take care of my mother.
- I know you will. I want to talk about a way that
you can provide that care LONGER BETTER. - The long-term care insurance premium is too
expensive. - Lets put the premium and the problem into
perspective. - The premium is not the problem.
- The premium is the solution to the problem.
- Option Something is better than nothing. How
much per year can you comfortably afford for a
long term care insurance premium? Lets take
that number and work backwards to create the best
policy we can. -
44- I just want a quote.
- The issue right now is not whether or not you
need insurance. Its more important to start the
process of putting together a plan for long term
care. (and if they shared personal experience)
In fact, youve told me the consequences that not
having a plan had on (person who need care)
45CPS Long Term Care is Here to Help You Protect
Your Clients and Their Families
- Rose Clayton, CLTC, CSA
- Manager, Long Term Care
- (800) 326-5433 x 159
- David Mayhew
- LTC Sales Marketing Associate
- (800) 326-5433 x 127
- Kristin Perez
- LTC Case Manager
- (800) 326-5433 x 113