Prospects waiting till the last minute

Crazy Rick · 10-27-2008, 07:30 AM

How do we LTC consultants deal with clients in their late 70’s who want to buy a LTC plan with no visible means to pay for it?

I see classic examples every day. In magazines and on television: they all say the same thing. "My folks need long term care, but they’re both in their 70’s. How do they pay for it?" Some families can tap into retirement or pension or an annuity. But what about the folks, and there are a lot of them, who don’t have any means to pay for a plan? Family? Friends? Ok, what else?

One elderly woman sold her Life insurance policy to pay for her long term care policy. I don’t think the older prospects are thinking, "It’s too expensive". I think what they’re asking themselves is "How am I going to pay for this?"

And no, Genworth’s TLC plan isn’t available in Pa. There aren’t many creative financing tools available, but I’m hoping someone here has an answer besides the ones I’ve mentioned. My own gradmother obtained a reverse mortgage. I guess that's another way. What else?

The simple answer may be to cut off my demographic at 69 (hey, that's my favorite number!). But that would kill the prospects over 69 that DO have the financial means to pay. Follow?

-CR

somarco · 10-27-2008, 08:04 AM

That is not unique to the LTCi market. I believe most folks would not buy insurance if not required.

If you have a mortgage, you are required to have HO insurance.

If you have a car, you are required to have auto coverage.

Some states have enacted partnership laws that (as I understand it) denies you access to Medicaid funds if you do not have LTCi until you first deplete your assets.

Insurance is something many folks don't want to pay for until they need it.

Crazy Rick · 10-27-2008, 08:17 AM

Yeah, I here ya. That's where we consultants come in and sell the need. I never thought, something we all need (at least when we hit 40), would be so difficult to sell. I knew it wouldn't be easy, but the denial I hear. The little quips and stuff. I almost want to take them by the hair and show them the cost comparisons.
- - - - - - - - - - - - - - - - - -
The marketing material my GA offers and the stuff I've seen. It's all spelled out in "black and white". Clear as crystal. Yet, older Americans STILL don't understand and they STILL keep putting it off. Then they hit 69, the premium's three times the cost and they have no way to pay for a nice, simple, plain vanilla plan and blame then they blame the "greedy insurance companies". Yeah can't win. Unbelieveable.

Yes, co-op states like Pa, Indiana, New York. If prospects acquire a co-op plan as I like to call them, in a participating state. IF they were ever going to need Medicaid dollars to pay for their long term care, they need to spend down their assests, but their plan they bought protects their assests in the amount of insurance they purchased. If they don't have a plan of any kind, and need Medicaid dollars, then yes, they would automatically have to spend down their assests to the impoverished level.

Then the State comes in, your spouse gets to keep one car and a monthly stipend of $100 and the person needing the care goes to the 4th floor of hospital in Kennebunk Maine where there will be a bed and footlocker waiting. And of course their spouse can only travel once a year from Cabo Wabo California to visit.

somarco · 10-27-2008, 08:27 AM

I use a consultative approach as well. Something that has served me well for many years.

But I also know when to cut my losses. Frankly, I don't have the time, energy or desire to "convince" someone they need my product. Either they see the value of my product or not.

Not everyone makes decisions in your time frame. I use drip marketing to keep in touch with those who are interested.

The rest opt out or I get tired of mailing things they won't open and move them to my trash.

I have folks who contact me several months after our initial introduction, including those who never responded to my phone calls or email. A few have bought a year later. Many after 3 - 6 months.

I wrote $23k in new premium last month from folks I had pretty much given up on. Shows how dumb I am.

Crazy Rick · 10-27-2008, 08:37 AM

"Frankly, I don't have the time, energy or desire to "convince" someone they need my product. Either they see the value of my product or not." -Yeah, I do the same exact thing. That's why I end my initial email with "Call me if you wish to proceed." I have no disire or energy to convince people. They should see the value in my services and three proposals I attached to said email.

Not everyone makes decisions in your time frame. I use drip marketing to keep in touch with those who are interested.
-Yeah, me too. I'm just beginning this process now. Via the U.S. Mail. To ONLY those who spoke with me and were slightly interested in what I had to say. Right! Same deal.
Hell, maybe some prosepects will call, maybe they won't.

somarco · 10-27-2008, 08:48 AM

SW3

Freddie · 01-03-2009, 12:25 AM

I do not write LTC yet but listened to a lady who writes it. I think a lot of people think that Medicare will take care of them or their spouse can do it. The key to LTC is that if they do not have it they may have to go to a nursing home under Medicaid. They first have to exhaust their assets and hope Medicaid can get them in a nursing home which usually means a 1 year wait and it only going to get worse. The bottom line is LTC helps keep them out of a nursing home and helps keep the other spouse from being impoverished. They want to avoid a nursing home and avoid being a burden to their kids. Still if they cannot afford it then it does not matter.

Crazy Rick · 01-03-2009, 08:15 AM

Yeah, LTC is not an easy product and judging by my experience and others here too, we LTC producers STILL have a long way to go. The senior market still believes their spouse or kids or the State will take care of them. I'd say conservatively? 80% of the population thinks this. I still have my practice going and I'm going to start up my leads again on Tuesday. Be a little more agressive this time but not call the prospect 3 times a day like some here have advised. I tried things that way when I sold Scientific Cookware back in the 90's: It didn't work then either. "Mary! are you sitting down? You have a chance to win $1000!" Mary replied "Yeah, uh, I put down on the card, not to call me at work..."

somarco · 01-03-2009, 08:39 AM

the State will take care of them.

Perhaps you need to inform them that the state is really the taxpayers. You might also want to inform them about OBRA and what happens to their assets after they die.

Of course this assumes they even qualify for Medicaid.

Newby · 01-03-2009, 09:24 AM

Originally Posted by somarco

That is not unique to the LTCi market. I believe most folks would not buy insurance if not required.

Some states have enacted partnership laws that (as I understand it) denies you access to Medicaid funds if you do not have LTCi until you first deplete your assets.

Insurance is something many folks don't want to pay for until they need it.

Somerco, I assume that was just a horrible choice of words that you put there about the partnership programs. It should say, "ALL states deny you access to Medicaid funds until you deplete your assets."

What the LTC partnership programs do is allow you to exempt funds from counting as an asset. Most states are dollar for dollar but here in Indiana you have unlimited asset exemption. You can keep millions of dollars in assets and qualify for Medicaid if you outlive your policy benefits. Excellent protection and it doesn't cost the client one single penny extra.

arnguy · 01-03-2009, 12:49 PM

Originally Posted by somarco

SW3

Bob, what does "SW3" mean?

moonlightandmargaritas · 01-03-2009, 01:25 PM

Originally Posted by arnguy

Bob, what does "SW3" mean?

"somerco" told me it was part of a British postal code for London...

Freddie · 01-03-2009, 01:34 PM

Originally Posted by Newby

Somerco, I assume that was just a horrible choice of words that you put there about the partnership programs. It should say, "ALL states deny you access to Medicaid funds until you deplete your assets."

What the LTC partnership programs do is allow you to exempt funds from counting as an asset. Most states are dollar for dollar but here in Indiana you have unlimited asset exemption. You can keep millions of dollars in assets and qualify for Medicaid if you outlive your policy benefits. Excellent protection and it doesn't cost the client one single penny extra.

What?! So if you want to get old and sick move to Indiana? People can exempt millions in assets and get free nursing home care under Medicaid in IN? I wonder how long that will last. The cost for ON taxpayers could get insane.

If people have some money they still want to stay in thgeir home insetad of a nursing home. The only way, Ican see, they can stay in there home, have some independence, avoid a nursing home and avoid being a burden on their kids is LTC.

Never_a_dull_moment · 01-03-2009, 02:35 PM

Of all the Partnership programs in the state, Indiana's is BY FAR the best.

New York also offers "Total Asset Protection", but the NY policies are not as flexible as the Indiana policies.

Freddie, in order to get the "total asset protection" under the Indiana Long Term Care Insurance Program, the Indiana resident has to buy no less than $239,000 in Lifetime Maximum Benefit AND it HAS to have a 5% compound automatic inflation benefit with no cap. So, if they buy a policy this year and go on claim 15 years from now, the policy will pay over a half million in benefits before they'd be qualifying for "total asset protection" from Medicaid.

Keep in mind, their income is not protected one they apply to Medicaid (and their choice of care providers can be more limited under Medicaid).

The "total asset protection" policies can be a great deal for the policyholder and their spouse and heirs. But, it's also a great incentive to buy LTCi and, in the long run, it will decrease Medicaid expenditures, not increase Medicaid expenditures.

Although the ILTCIP has been around for years, most Hoosiers don't know about it.

somarco · 01-03-2009, 02:57 PM

SW3 . . .

Some will, some won't, so what?

Somerco, I assume that was just a horrible choice of words that you put there about the partnership programs. It should say, "ALL states deny you access to Medicaid funds until you deplete your assets."

Perhaps . . .

Not all assets are countable, and some folks don't have assets to deplete, so I suppose the statement can be true either way.

Your pal,

Somewillco . . .

bill3173 · 01-05-2009, 11:50 AM

Originally Posted by somarco

I wrote $23k in new premium last month from folks I had pretty much given up on. Shows how dumb I am.

No. It shows that you are doing things sensibly and not pressuring or terrorizing your clients.

If it weren't for the clients that I'd given up on, I wouldn't have a client base. You left a good impression and they came back to you, that's all.

Same with anything. The real estate agents that seem informed and intelligent, but forget about me, get my business. Those that stay in constant contact trying to "recruit me" make me want to run in the other direction.

Didn't Groucho Marx say " I wouldn't want to belong to any club that would have me as a member".

Newby · 01-05-2009, 05:22 PM

Originally Posted by Freddie

What?! So if you want to get old and sick move to Indiana? People can exempt millions in assets and get free nursing home care under Medicaid in IN? I wonder how long that will last. The cost for ON taxpayers could get insane.

If people have some money they still want to stay in thgeir home insetad of a nursing home. The only way, Ican see, they can stay in there home, have some independence, avoid a nursing home and avoid being a burden on their kids is LTC.

The opposite is true. It is saving the taxpayers by encouraging people to be responsible for their own LTC insurance.

Here it is in a nutshell.

Bob is a middle-class guy. Has $600,000 in countable assets. If he purchases a policy with benefits of $239,447 or more in 2009 he will have unlimited asset protection. The policy must also be Indiana Partnership qualified.

He can go in an assisted living center, home health care OR a nursing home during his LTC policy benefits. Once he exhausts the funds he can choose to private pay OR he can qualify for Medicaid (would need to opt for a nursing home at that point) and all of his assets are fully protected. He can give them away or let his kids inherit them.

It saves the taxpayers money because FEWER people will end up on Medicaid if more people buy quality LTC policies. Most people won't outlive the benefits.

InsureGuy5 · 05-07-2009, 10:39 AM

Maybe partnership LTC will help, but if they don't have the means to pay for it, then they probably don't have too many assets to protect other than real estate. The well spouse can always stay in the house.

It is the folks that are cash poor buy real estate rich like farmers who have the most to lose.

Lute · 05-10-2009, 12:11 AM

What do you find is the best way to suggest clients pay for LTC? Am I wrong to be wary of suggesting reverse mortgages? That's messing with someone home. I tend to stress the high cost of paying for LTC yourself to put the high LTC premiums in perspective and mention the tax deductions for premiums.

TDY418 · 05-10-2009, 07:08 AM

Some Will Some Want Whose next is my Motto! We as professionals can only educate, present the products show the value and benefits and move on.