Long Term Care
description
Transcript of Long Term Care
Long Term Care
Peter S. Gelbwaks, CLTCPresident, Gelbwaks Insurance Services, Inc.www.gelbwaks.com [email protected]
800-826-1686
The Vision and the Mission of Long Term Care Insurance
Objective
Give participants a clear understanding of the Long Term Care insurance industry as it stands in our
country today by providing details on product choices, the status of the marketplace, current
events taking place nationally and the trends we see for the future.
LTCi Vision
To increase the amount of covered Americans
with Long Term Care Insurance from 9% to 40%
within the next 5 years.
LTCi Mission To educate America on the need for
Long Term Care insurance, and help them understand that LTCi need not be complicated nor as
expensive as it is currently perceived
The Good News…
National acceptance of the LTCi need Carriers putting LTCi in the forefront
New and more exciting marketing concepts Stabilization of the industry
Worksite EvolutionThe
business/worksite market is the
fastest growing segment of the
Long Term Care insurance industry
Increased Media Exposure
2009 LTC Industry Update National Awareness Campaign
Deficit Reduction Act/Partnership
National Awareness Campaign“Own Your Future”
Pilot program that began in 5 states in 2005: Arkansas, Idaho, Nevada, New Jersey & Virginia
Endorsement from each governor to buy LTCi
Phase II rolled out in 4 new states in 2006: Kansas, Maryland, Rhode Island & Washington
Phase III added 7 more states for the fall of 2006 and 2007: Georgia, Michigan, Missouri, Nebraska, South Dakota, Tennessee & Texas
Phase IV introduced 2 additional states in March of 2008: Ohio & Pennsylvania
Phase V brought on Iowa, Kentucky and Washington D.C. in the Fall of 2009 bringing the total to 21 states
National Awareness Campaign“Own Your Future”
To date, the Campaign has had an overall response rate of over 9%, and two of the recent States, Ohio and Pennsylvania, have experienced response rates of 21% and 23% respectively. This response rate is significantly higher than comparable private sector direct mail campaigns
Campaign exceeded original expectations, both in terms of consumer interest and initiating long-term care planning actions. Based on this success, Congress provided additional support for long-term care education initiatives by establishing the National Clearinghouse for Long-Term Care Information under the Deficit Reduction Act.
Deficit Reduction Act Signed by the President on February 8, 2006
Severe Medicaid restrictions imposed
States authorized to adopt “Partnerships”
Legislation that provides even more incentive to plan
The market potential is huge
Partnerships Partnership between Medicaid &
the insurance company
Allows the consumer to qualify for Medicaid if needed after using up his/her LTCI policy benefits with some protection of assets
Each state must adopt individually by filing a Medicaid Plan Amendment
Allows for reciprocity as well as inflation incentives
The Average Buyer
Individual LTCi – 58 years old
Group LTCi – 41 years old
LTCI Product Design Trends & Features for the Boomers
Combination Contracts Survivorship Features Limited Pay Options Innovative Inflation Options Cash Benefit Concept
Combination ContractsSome of the newest
products in the marketplace
today combine Life Insurance
with Long Term Care insurance
SurvivorshipSurvivorship riders have
become very popular in the marketplace. They are especially
attractive when selling to the younger client. The definitions differ
from company to company.
Limited Pay OptionsLimited pay options are available with many
carriers. This the wave of the future… 10 pay
Pay to age 65 Single pay
Innovative Inflation OptionsThe benefit increase rider can drastically influence the amount of benefit that is paid. There are
many approaches in the marketplace.
Compound CPI Compound 2xCap
GPO with conversion to Compound
3% Compound
Reimbursement vs. Cash
Reimbursement contracts as compared to indemnity based contracts, how does each work? One type of contract is typically based upon a “pool of money”
concept, while the other is based upon a flat amount of payment.
CASH
Reimbursement
Pros Allows for total flexibility Easy to understand Very few restrictions Similar to Disability Insurance
Cons Not offered by many carriers Costly
Pros Widely available Competitively priced
Cons Extremely complex Specific coverage limitations Does not easily allow for future trends Language differs from carrier to carrier
Reimbursement vs. Cash (cont.)
Who buys CASH LTCi?
•Future Unknowns•Disability Look-A-Like
Under 55 Market
•Total Flexibility•Maxed out on DI
Professionals
•Want the best there is•Limited Exclusions
High End Lifestyle
Under 55 Market : Future Trends in Caregiving
The future unknowns are a very real issue for the younger buyer of LTCi. When we have “robot care” in 30 or 40 years, will it be covered? We want to make sure that the policies being presented today address this through one of the following:
100% Cash
Hybrid Cash
Alternate Plan of Care
Under 55 Market:If they can’t buy DI
Occupation Income
Health Avocation
Cost
There are five main reasons why a young buyer may be interested in a CASH Benefit LTCi plan vs
Disability insurance
Professionals Selling some form of Cash
LTCi plan to this group is key. It gives them the flexibility and control that they want.
Many professionals (especially
physicians) are maxed out on the amount of DI that they can purchase. CASH LTCi is a perfect supplement.
High End Lifestyle
Many prospects live extremely high end lifestyles and are accustomed to always having the best that life has to offer. For these people, CASH LTCi is the right choice.
Current Economic SolutionCash LTCI- The Lifesaver
2009 - $102,200 Tax Free Become Disabled- Lose the Home? Freedom and Flexibility $3 to $4 K – Makes a Difference Add on to current coverage
What Can & Does Happen to Younger People?
Some examples…
Stroke MS Car Accidents Skiing Accidents
The Cost of WaitingSample Policy:
$200 a day, 5 year benefit, 90 day EP, 5% simple inflation
A 55 Year old married female in preferred health would have an annual premium of $1356.42*
A 65 Year old married female in preferred health would have an annual premium of $2492.88*
*FL Rates Quoted – John Hancock Custom Care 2009
The Gelbwaks Family Long Term Care Dilemma
Will it be YOUR Family’s Story?
Actual Claim Statistics 8.25 million Americans now own LTCi 400,000 new Americans obtained LTC coverage in 2008 $8.5 billion in LTC insurance claims paid (2008 estimate) 180,000 Americans paid LTC insurance benefits (2008) 42% of all LTCi benefits were allocated for Home Care (2008) 27.5% of all LTCi benefits were allocated for Assisted Living (2008) 30.5% of all LTCi benefits were allocated for Nursing Home (2008) The largest claim to date has exceeded $1.2 million (still open – 10yrs)
Source: AALTCI 2009 Sourcebook for Long Term Care Insurance Information
In Conclusion…More than ever before in the history of LTC insurance, opportunity is
knocking at the door. We have excellent, state-of-the-art products with financially stable insurance carriers who are extremely
committed to the sale of Long Term Care insurance, agents and brokers who are knowledgeable and educated on the variety of options available, in addition to the huge potential marketplace of buyers that
has barely been tapped.
There is a need for this product and the time is now!