CLTC Objection Handling Webinar Presented by CLTC

1

CLTC Objection Handling Webinar

Presented by CLTC

www.ltc-cltc.com

2

Presented By:

D. Corey Rieck, MBA, CLTC

On Behalf of CLTC

3

Results to be achieved today

• What kind of client/prospect do you have?

• Handling Funding responsibility related issues.

• Handling the “I’ll take care of mom..” issue.

• Handling the “Government will take care of me” issue...

• Handling the “My family will take care of me response.”

• Handling the “I’ll shoot myself” response

4


• Handling the “I’m already covered” response.

• System of follow-up for late adopters• Properly setting Underwriting

Expectations• Using your experience

• Bonus:• CLTC Grad Benefits/Overview of

Appendix 8 and Appendix 9 included on this PPT for your further assistance.

5

Introduction

• Introduction of D. Corey Rieck, MBA, CLTC• Personal Experience; the translation

of which can help your clients understand the need and urgency of proper LTC planning.

• CLTC Instructor since 2003• Personal Producer since 1999

6

Introduction

7

Need any further proof..

• The Long Term Care Issue and its associated challenges can present themselves to you and your family at any time and acts independently of age:• Mom—45—M.S. Diagnosis• Dad----70—Esophageal Cancer

Diagnosis• Jackie—19 mos. Neuroblastoma

Diagnosis• Grandfather—85 Yrs old CLL

Diagnosis

8

Your Experience• Do you consider it important to have

your clients/prospects know who you are and what your personal experience is?

• Shouldn’t they know who they’re doing business with?

• 4 Steps• Who are you?• Who do you work for?• What will you accomplish?

9

Your Experience

• Have you personally had the LTC Experience?

• How do you help people understand what it could mean?

• Two Kinds of clients/prospects..how best to classify?

• Use your experience to educate and gain the upper hand.

• No one can take your experience away or dispute.

10

Handle the objections before they become

objections• Have you personally had the LTC

Experience?• How do you help people understand

what it could mean?• Two Kinds of clients/prospects..how best

to classify?• Shouldn’t you tell them what it means if

they take your advice...• If they don’t take your advice?• Carrier Cost Surveys and their role

11

Set the expectation that no one is funding this but

you...• Right Now, there are 35 million people

in the U.S. that are 65 years of age or older, and in 20 years, that number is projected to triple.

• Medicare changes, Medicaid changes, Federal LTC program implementation, Partnership Programs...• Got time to discuss the Budget?

12

Access the specialized knowledge

• Do I personally do what is necessary to become the Long Term Care Expert or do I just partner with one and split the case accordingly?

13

Education

• How come we haven’t helped more people with Long Term Care Planning?

• 8%---10% penetration currently• Roughly 300 million people live in the

U.S. • Maybe it was the way we positioned the

product?

14

Prior to CLTC we...

15

Education/Expectation Setting

• Using statistics to open up a conversation

• Selling fear• “Disturbing”• Showing pictures of burning buildings• Using “Risk” to help sell this• Talking about all of the choices

someone will have with LTC : (Home Care, ACLF, NH, ADC)

16

Education/Expectation Setting

• “How would changing your parent’s diaper make you feel?”

• LTCI is about protecting assets• Often sold by arguing or debating with

clients• Often sold to individuals• Often just a product push• Inadequately handling client objections

17

The “Old Way”

• How did we handle these objections/myths?• “I’ll take care of mom.”• “It’s that nursing home stuff.”• “I’m already covered.”• “The Government will take care of

me.”• “My Family will take care of me.”• “I can self fund.”• “It’ll never happen to me.”

18

The “Old Way”

• How did we handle these objections/myths?• “I’m covered under my Health

Insurance.”• “I’m covered under my Disability

Income.”• “I’m never going to a nursing home.”• “The government paid for my______,

so that means they will pay for me.”• “I’ll put a gun in my mouth.”

19

The “Old Way”

• How did we do using these techniques?• Inadequate LTC education• Inadequate expectation setting • The reputation of the product• Less than stellar delivery of the product

• “You know…there is a 1 in 2 chance you might need this……”

20

The “Old Way”

• Don’t clients think the worst is always going to happen to someone else?

• Risk remains constant in a clients mind, what often doesn’t remain constant are responsibilities

• Risk implies chance…chance implies odds, and everyone is going to beat the odds…

21

The “Old Way”

• Did you think the Bellagio got built by people beating the odds?

22

Expectation Setting

• How many of you have had to participate or otherwise manage care directly in an LTC situation?

• Was there/were there:• Assets allocated for this issue?• If not, who or what paid for the

care?• Geography involved?• Siblings involved?

23

Expectation Setting• Did your relationship with your siblings

change as a result?• What effect, if any did it have on all

involved emotionally, physically?• How did it affect your lifestyle?• Your career?• Your relationship with your spouse?• If you have had both experiences, (I.e.

managing the care directly or managing remotely, which do you prefer?)

24

Expectation Setting• How many of you have sold an LTC

Policy?• Do you own it yourselves?• Have clients asked: “What have you

personally done about this?”• If you haven’t completed this; what is

your response?• Clients may tell you..”Do for me what

you did for yourself…”

25

Expectation Setting• The way to avoid an argument with a

client is not to get into it in the first place.

• Use the CLTC 3 step process• Ask open ended questions• Don’t batter your client with statistics

26

Two Kinds of Clients

• Type I/Track I Client:• Those that have had the LTC

Experience and are aware of the issues and associated challenges involved….

• Ask the question..”What does Long Term Care mean to you?”

• A client that has had the experience will most likely relate their experience to you.

27


• Type I/Track I Client:• Ask the follow-up questions:• “Were there resources allocated to

pay for LTC?”• “If so, how?”• “If not, what paid for it? Who paid

for it?”• “Were there siblings involved?”

28


• Type I/Track I Client:• Ask the follow-up questions:• “Did your relationship change with

them as a result of your/their involvement?”• “Was there geography involved?”• “How was everyone’s lifestyle

affected as a result?”

29


• Type II/Track II Client:• Those that are willing to take the

next logical step in financial planning

• You maybe have helped these clients with other financial planning issues

• They have shown a prior logic pattern of financial planning

30

Two Kinds of Clients• Type II/Track II Client:

Asset & Asset Protection

Income Portfolio PortfolioIncome Disability IncomeFamily Life Insurance

Wealth More Life Ins. 401K/IRA/Annuities ???????

31


• “Listen..over the years, I’ve helped you protect your income with Disability Income, your family with Life insurance, your wealth with more life insurance, and I have helped you accumulate these assets..one thing we need to address is protecting your assets (I.e. 401K, IRA, etc) so they can execute for the manner in which their intended.”

32


• Isn’t this a little different than the old way of: “You know…there is a 1 in 2 chance that you will need to go to a nursing home.”• Less threatening• Less awkward• Less off-putting• Creates the opportunity for an

interview

33


• Proper Long Term Care Planning protects Assets. Assets produce Income. Income produces lifestyle.

• If clients do not plan for the LTC issue and its associated challenges properly, their lifestyle, relationships, assets and income are at risk; not to mention their entire financial plan.

34

Education and Expectation Setting

• Longevity• What used to kill us doesn’t necessarily

do so anymore• Life Expectancy Progression• Medical Advancements• Clients taking better care of themselves• Translation?

35

Who is your biggest competitor?

• Is it the independent agent down the street?

• The Career Genworth LTC Agent?• The Mass Mutual, New York Life or

Northwestern or Banker’s Life Agent?• The CFP or Wachovia Securities or

Edward Jones Financial Advisor?• The Raymond James Representative?

36


• No. These are not your competition for LTC.

• Your competition is your/our clients/prospects thinking that someone else or something else will pay for their Long Term Care.

37


• What messages have the Federal Government sent us over the years?• Medicare Reform• Medicaid Reform• DRA• Own Your Future Campaigns• Federal LTC Program• Partnership Plans

38


• Medicare Reform: (messages)• Prospective Payment System

implemented in early 80’s• Patients discharged “Sicker and

quicker”• Movement from Fee for Service to Flat

Fee• Balanced Budget Act of 1997 (BBA

97) which took effect 1.1.98• Removed any meaningful LTC

reimbursement for custodial care

39


• Medicare Reform: (messages)• Medicare reimbursed NH stays went

from an average of 50 days to 14-21 days as a result

• Your client may tell you…”Medicare will pay for me…You’ll tell them…No it won’t.”

40


• Medicare Reform: (messages)• Your client or prospect may tell

you…”Medicare paid for my _____;”---ask them when it was. If it was prior to 1.1.98 (prior to BBA of 97) then there is a good chance that Medicare did pay for the LTC of the person involved.

41


• Medicaid Reform: (messages)• Open to state interpretation;

Individualized by State• Effect on artificial

impoverishment/Medicaid Planning

42


• DRA (Deficit Reduction Act)• New Home Equity Limits that can

effect eligibility for Medicaid• Look Back Period Adjustment on

transfers from 3 years to 5 years• Effect on CCRC Entrance Fees as it

relates to Medicaid spend down (considered available)

insurancestudy.com

Deficit Reduction Act of 2005

insurancestudy.com

• In 2005 Congress passed the DRA-effective February 8, 2006

• Legislation contained provisions affecting Medicaid– Changes regarding exemption • Assets• Annuities• Home Equity Ownership

– Elimination of prior restrictions on the expansion of Partnership Programs

– Any state can now implement a Partnership Program

43

insurancestudy.com

Major Areas of LTC Reform in the DRA

• Look-back period

• Transfer for penalty start date

• Undue hardship exception

• Treatment of annuities

• Community spouse income rules

• Home equity limits

• Treatment of investments for CCRCS

• Promissory notes and life estates

• State long-term care partnership programs

44

insurancestudy.com

Own Your Future Campaigns

insurancestudy.com

• Pre-cursor in a lot of states to Partnership Programs

• What did your state do?

45

46

The Federal Long Term Care Program

• Implemented by John Hancock and MetLife in 2001 for the Federal Government and their some 38,000 employees; they formed a company, Long Term Care Partners, LLC

• www.ltcfeds.com

47

The Federal Long Term Care Program

• Main LTC Planning Metric Limits:• DBA: $50---$300• Inflation: 5% Compound, FPO• Benefit Period: 3 Yr, 5 Yr

Unlimited• Elimination Period: 30 or 90 Days• Days of Service

48

Partnership Plans

• Created to reduce consumers fear of impoverishment due to Long Term Care and its associated consequences.

• Created with funding from the Robert Wood Johnson Foundation in the mid-1980’s.

• Shared partnership between individual states, and federal government.

• Originally, cases had to be written on separate Partnership Paper.

49

Partnership Plans

• The concept of these Partnership LTC Policies is simple:• If you get a client to buy a Partnership

benefit pool, and the client then goes on claim and completely exhausts that benefit pool and then subsequently applies for Medicaid, then the amount of the benefit pool (that has just been exhausted) is exempt from Medicaid spend down.

50

Partnership Plans

• Two Regimes:• Regime I:• California• New York• Indiana• Conneticut

51

Partnership Plans

• Two Regimes:• Regime II:• DRA created the opportunity for the

other 46 states to implement their own partnership plans

52

The Bottom Line:• Any meaningful reimbursement for

custodial care for people with means has been taken off the table by the Government and the implementation of these programs

• Clients need custodial care; and the majority of LTC delivered (80%--90%) is custodial.

• NOTHING BUT YOUR CASH OR A PROPERLY STRUCTURED LTC PLAN PAYS FOR CUSTODIAL CARE

53

Education: The New Way:• Asking open ended questions:• “What is your understanding of LTC?”• “Have you experienced LTC

personally?”• “What is your experience with LTC?”• “When LTC is mentioned, what comes

to mind?”• “What does LTC mean to you?”• “What financial planning related steps

have you taken in the past?”

54

Education: The New Way:• Asking open ended questions:• “What is your plan for paying for your

LTC?”• “What is it that you want your money

to do for you?”• “Have you put in a plan to protect

your assets so they can execute for the manner in which you have intended?”

55

Education: The New Way:• Making the LTC “Picture” bigger; about

family as opposed to an individual.• Making sure the client understands the

3 steps of Proper LTC Planning.• Calling into question how the client’s

lifestyle can be affected by not properly planning for LTC.

• Properly debunking and addressing the myths of LTC and how this affects the client/prospect.

56

Education: The New Way:• Properly setting expectations for the

client.• Systematic and proper delivery of the

aforementioned examples of how the Government is not going to pay for their custodial care.

• Properly demonstrating the difference between skilled and non-skilled care.

• Discussing how properly executed LTC protects income stream

57

Education: The New Way:• Making this a CONSEQUENCE PLAY

RATHER THAN A RISK PLAY.• Properly demonstrating the

consequences to:• Lifestyle• Portfolio• Income Stream• Family• Friends• Relationships• Obligations/Promises

58

Education: The New Way:• Asking your client “What does

retirement look like” and then demonstrating to them how LTC can get in the way of the ‘best laid’ financial and retirement plans.

59

The CLTC Philosophy

“We believe that the first thing you should do is construct a plan for care—the plan is what protects the family.

LTC insurance will likely protect the plan.”

The Corporation for Long Term Care Certification (CLTCC)

60


• What kind of client/prospect do you have?

• Handling Funding responsibility related issues.

• Handling the “I’ll take care of mom..” issue.

• Handling the “Government will take care of me” issue...

• Handling the “My family will take care of me response.”

• Handling the “I’ll shoot myself” response

61


• Handling the “I’m already covered” response.

• System of follow-up for late adopters• Properly setting Underwriting

Expectations• Using your experience

• Bonus:• CLTC Grad Benefits/Overview of

Appendix 8 and Appendix 9 included on this PPT for your further assistance.

62

Questions?

• It isn’t really about not knowing what to do.

• It’s about knowing where to go if you are challenged.

63

Bonus Section

64

CLTC Tools

65

CLTC Tools to directly assist with Objection

Handling :• Appendix 8: The CLTC Planning Process

Workbook:• Appendix 9: The CLTC interview Road

map• CLTC PPT: Selected Power Phrases and

Overcoming Objections

• Located on the CLTC Graduate component of the Website.

66

CLTC Tools:• Appendix 8: The CLTC Planning Process

Workbook:• The purpose of this exercise is for you

to take the CLTC 3 Step Process and selling scenarios and put them into your own words.

• Use this workbook in conjunction with the Client Interview Road Map

• Appendix 9: The CLTC interview Road map

67

CLTC Tools:• Appendix 8: The CLTC Planning Process

Workbook:• The purpose of this exercise is for you

to take the CLTC 3 Step Process and selling scenarios and put them into your own words.

• Use this workbook in conjunction with the Client Interview Road Map

• Appendix 9:

68

CLTC Tools:• Appendix 9: The CLTC Client Interview

Road Map:• Use this to more effectively conduct

successful interviews based on Key points discussed during class..this tool will help you:• Questions that establish the 3 step

process.• Overcoming objections• Power Phrases• Fact Finder/Lifestyle/Financial

Commitments

69


Road Map:• Existing Client: Opening Statement:“I need to talk to you about the

consequences that living a long life and needing care over a period of years will have on your spouse, children and your retirement portfolio, which was never allocated to pay for it.”

70


Road Map:• Existing Client: Opening Statement:

If the response is:“What do you mean?”

“Have you or someone you know had a prior experience with Long Term Care?”

71


Road Map:If the response is:I read something about the subject

or I am interested in getting some information

“What have you heard?”“What questions do you have?”

The subject is likely to be LTCI. Do not respond by talking about product.

72


Road Map:• Existing Client: Opening Statement:

If the answer is yes, go to:Prior Experience, next page

If the answer is no, go to:No Prior Experience, next page

73


Road Map:Prospective Client Generated by a

Lead: Opening Statement:“May I ask what motivated you to

meet with me?”Responses may range from:I’m looking for a quoteI just read something about itI am going through a ltc situation

with my familyI just want to get some information

74


Road Map:If the response is:“The issue is long term care and

what the consequences of not having a plan will be to your family and retirement portfolio.”

If the response is:“I just want a quote. I am not

interested in buying right now.”

75


Road Map:Client with Prior Experience Key Questions and Talking Points:• What happened?• How long did the illness last?• Where was the care provided and

who provided it?• What impact did it have on the care

provider?• What impact did it have on the

family finances?

76


Road Map:“Respectfully, the issue is not long

term care insurance. It is long term care. The product may or may not be appropriate. What is appropriate is a discussion about the consequences that not having a plan for long term care will have on the emotional, physical and financial well-being of your family. I’d like to ask you a few questions in order to create a plan for care, should you need it.”

77


Road Map:“Have you or someone you know

had a prior experience with long term care?”

If the answer is yes…go to prior experience…

If the answer is no..go to no prior experience

78


Road Map:Client with Prior Experience Key Questions and Talking Points:• Was any income allocated to pay

for care?• What impact did reallocating

income have on the family’s ability to keep prior financial commitments?• Did it lead to an unintended

invasion of their investment portfolio?• Did anyone have to take money out

of their pockets to help?

79


Road Map:Client with Prior Experience Key Questions and Talking Points:• What did it do to the financial

viability of the surviving spouse/children/family?• Did he/she understand the

consequences not having a plan would have on his/her family or friends and his/her retirement portfolio?

80


Road Map:Client with No Prior Experience Key Questions and Talking Points:• If you have had a prior experience:“I have and I need to tell you what

taking care of my _____ did to the emotional, physical and financial well-being of my family. My responsibility is to make sure what happened to my family doesn’t happen to your family.”

81


Road Map:Client with No Prior Experience Key Questions and Talking Points:• If you have not had a prior

experience:“Many of my clients have gone

through this situation in their families and it has been devastating to them both emotionally and financially. Let me ask first…Do you know what long term care is?”

82


Road Map:Client with No Prior Experience Key Questions and Talking Points:• If you have not had a prior

experience:Explain: “It is the almost consistent

assistance a person needs because a chronic debilitating illness or cognitive impairment has severely compromised his ability to either get through the most basic of daily functions, render him unsafe because he is no longer oriented to time, place or both.”

83

• Appendix 9: The CLTC Client Interview Road Map:

Client with No Prior Experience Key Questions and Talking Points:• Explain how they never considered

what the consequences of providing care would have on their family:• Tax Ramifications• When they realized that nothing

would pay for their care

84


Road Map:Client with No Prior Experience Key Questions and Talking Points:• Explain how they never considered

what the consequences of providing care would have on their family:• What toll it took on those who

provided care• How it impacted the

relationships between siblings/children• How long the illness lasted

85


Client with No Prior Experience Key Questions and Talking Points:• Explain how they never considered

what the consequences of providing care would have on their family:• How and where the care was

provided• The impact it had on the family’s

income stream• The impact it had on the family’s

lifestyle which includes keeping prior financial commitments

86


Using the 3 Step Process to establish need and urgency:

Step 1:“Do you believe its possible you could live a long life?”

“If you do live a long life, do you think its possible you could become frail and need care?”

87


Road Map:Step 2:The plan is simple. To remain

independent in the community without devastating the emotional, physical, and financial wellbeing of the client’s family.

88


Road Map:Step 2:“What’s your plan should you ever

become frail or needed care?”“Where would you like your care to

be delivered?”“Who do you think would provide

your care? Have you discussed it with them?”

“What impact do you think taking care of you would have on them?”

89


Road Map:Step 2:“What impact do you think providing

care to you will have on their emotional, physical and financial wellbeing?”

90


Road Map:Step 3:If this is an existing client:• “I had a chance to review your

income stream which will be generated by your portfolio and added to your social security and (add it all in) Does ____ per month sound correct?”• Review the financial commitments

the client has going into retirement and what they will cost

91


Road Map:Step 3:If this is an existing client:• “Here’s the problem. I can’t assure

you that should you need care, your income will be sufficient to support your lifestyle and pay for care at the same time.”• “If paying for care means cashing

in low cost based assets or qualified funds, there are serious tax considerations.”

92


Road Map:Step 3:If this is a prospective client:• “Could you give me an idea of what

your lifestyle in retirement is likely to look like?”• “In addition to supporting your

lifestyle, what ongoing financial commitments will you have?”

(Child, grand children, community, church, temple, Alma-mater, etc)

93


Road Map:Step 3:If this is a prospective client:• “If you ever needed care, do you

see it as a possibility that you may not have sufficient income to cover your lifestyle, financial commitments, and pay for care at the same time?”• “What impact do you think this

would have on your family?”

94


Road Map:Step 3:If this is a prospective client:• “Do you see it as a possibility that if

the illness lasted long enough it could threaten the financial viability of your spouse and children who may depend on an inheritance?”• “I have some ideas on how you can

maintain your lifestyle, keep your financial commitments, and pay for care at the same time.”

95


Road Map:Overcoming Objections:I don’t think I will live a long life. My

dad died at 60.• You may not live a long life. But if

you do and you need care, there could be severe consequences to your family, income stream, and retirement portfolio; • Clients have retirement portfolios

that pay out to their mid to late 90’s. This suggests they believe it is possible they could live a long life.

96


Road Map:Overcoming Objections:I don’t think I will live a long life. My

dad died at 60.• “Tell me in your own words what

you think taking care of you over a period of years will do to the emotional, physical and financial well being of your family?”

97


Road Map:Overcoming Objections:I may not need care over a long

period of time.• You may not. But if you do, there

could be severe consequences to your family, income stream and retirement portfolio;• Tell me in your own words what you

think taking care of you over a period of years will do to the emotional, physical and financial wellbeing of your family?

98


Road Map:Overcoming Objections:I have enough money to pay for my

care• Rather than look at assets, may I

suggest that you look at the income generated from your portfolio. It may seem that $___ enough, but it only generates $___ per year of income, all of which is currently committed to your lifestyle.

99



care• Paying for care will likely mean

reallocating income which at a minimum, will adversely affect your lifestyle and ongoing financial commitments.• Retirement income usually matches

retirement expenses. Will there be sufficient income to pay for your expenses and care at the same time?

100



care• If the illness lasts long enough, it

can impact the financial viability of a surviving spouse and/or children who may depend on an inheritance.

101


Road Map:Overcoming Objections:I’m wealthy. My financial

planner/CPA/Lawyer told me that I can easily pay for the cost of my care.• Many people believe that having 2

or 3 million dollars in assets is sufficient to pay for care, should they need it. May I suggest that you consider the income these assets will generate? This income is likely already committed to support your lifestyle.

102



planner/CPA/Lawyer told me that I can easily pay for the cost of my care.• Very wealthy people are no

different than those with modest net worth, when it comes to purchasing insurance. They assess the consequences, not the risk. Most of them believe they will never need care so the risk is negligible.

103


Road Map:Overcoming Objections:I’m a veteran. The V.A. will pay for

my care.• The Federal Long Term Care

Insurance Program was created to address the reality that most veterans will not qualify for these benefits.

104



planner/CPA/Lawyer told me that I can easily pay for the cost of my care.• However, they understand, often

from a prior experience that the consequences to their family’s emotional, physical and financial wellbeing could be severe. They also understand the cost of care is significant.

105


Road Map:Overcoming Objections:I’m a veteran. The V.A. will pay for

my care.• The V.A. provides health care for

veterans. Custodial care is provided primarily for those with limited income and assets under the Aid and Attendance Special Pension benefit.

106


Road Map:Overcoming Objections:Medicare paid for my mother’s care.

• Medicare is health insurance. It doesn’t pay for custodial care; only skilled or rehabilitative services.• Review the Balanced Budget Act of

1997.

107


Road Map:Overcoming Objections:My attorney told me that Medicaid

would pay for my care in a nursing home.• Medicaid will pay for custodial care

in a skilled nursing home, but it pays little or nothing for home care, adult day care and assisted living. Medicaid doesn’t address the years that the client is at home, needing care.

108


Road Map:Overcoming Objections:My attorney told me that Medicaid

would pay for my care in a nursing home.• Medicaid is not free. If you have

qualified funds or low cost based assets, there are serious tax considerations.• Once on Medicaid, a community

spouse may lose the majority of their income.

109


Road Map:Myth: LTCI protects the individual.

Reality: LTCI protects the individual’s family.

Myth: LTCI Protects Assets.Reality: LTCI protects income

stream.

110

Questions?

• It isn’t really about not knowing what to do.

• It’s about knowing where to go if you are challenged.

CLTC Objection Handling Webinar Presented by CLTC

Documents

Transcript of CLTC Objection Handling Webinar Presented by CLTC