How to Talk to Your Clients About Long Term Care

Planning©

ByKaren Henderson

Aging/Long Term Care Specialist/CoachFounder

Caregiver Network/How to Care

The average 21st century North American is projected to spend more years taking care

of aging family members than raising children.

Age Power, by Ken Dychtwald, PhD 1999

Agenda

•Defining the 50+ Market•Demographic Realities and Long

Term Care•Care-Related Costs•How to Personalize the Sale of LTC

Insurance Products•Marketing Techniques and Tools•Communication Tips•Resources

Statistics

• The 80+ age group is fastest growing• 600+ people turn 65 every day• 4.7 million Canadians are 65+• Provincial health care spending has

increased 242% in the last 20 years

The Realities of Aging

• If you are over 30, you’re already dying• Cell death begins to outstrip cell

replacement but there are sufficient reserves in most major organs to keep us going decades longer

• Chronic, age-related diseases - diabetes, hypertension, heart problems - begin showing up around age 55

The Realities of Care

• Over half of women and nearly one-third of men 65 and older will stay in a nursing home sometime during their lifetime (The Risk of Nursing Home Use Later in Life, Medical Care 28(10): 952-62).

• Of those needing long-term care, 57% are elderly, 40% are working age, and 3% are children (GAO/HEHS-95-109 Long-Term Care Issues, p. 7).

What Is Long Term Care?

• A variety of services provided to people with a prolonged illness, disability, or cognitive impairment such as Alzheimer Disease.

• Intended to help a person maintain present level of functioning - not rehabilitate or cure medical problems

The Complex Questions of Long Term Care Planning

1. What kind of care is needed?

2. Who will provide it?

3. Where will it be provided?

4. How much will it cost?

5. Who will pay for it?

What Constitutes Long Term Care?

1. Help with Activities of Daily Living (ADLs)– Eating– Bathing– Dressing– Mobility– Transfers– Toileting

2. Care/supervision for those with dementia

What Are The Triggers For LTC?

UNDER AGE 65• Arthritis• Cancer• Injury• Malfunctions of the

nervous system• Stroke

OVER AGE 65

• Dementia

• Cancer

• Diabetes

• Injury

• Malfunctions of the nervous system

Home Care Costs• Visiting nurse:

– $40.00/ hour– $80.00/day– $29,200.00/year

• Personal support worker: – $17-22.00 per hour/day– $14,600.00/year

• Incontinence products/meal replacement products:– $2000-3000.00/ year

• Live-in care: $3000.00/month or $36,000.00/year

Home Care: Equipment Costs

• Stair lift: $5000.00 +

• Toilet seat lift: $1000.00

• Walker w/wheels: $450.00

• Ramp: $200.00 +

• Ceiling track lift: $1000.00

• Superpole system:$300.00

• Lift chair: $1600.00+

Facility Care Options/Costs

• The cost for private, non-subsidized retirement homes ranges from $2000 - $8,000 per month

• LTC nursing home/facility care costs range from $800.00 - $4000.00

• Hidden extras: $10,000 a year

What Does the Government Provide?

• All taxpayers are entitled to basic care in the home - can range from 1 - 15 hours per week

• Provincial health insurance plans cover physician, hospital and various diagnostic and treatment services

• Provincial health insurance plans and private supplementary health insurance do not cover long term care

• No resident will be turned away from a nursing home due to inability to pay

• Compassionate Care Leave (January 2004)

The Opportunity

• 69% of respondents do not want to be a burden to their families as they age

• 67% prefer to live at home during their old age • 63% have not created a will or living trust• 87% have not purchased LTC insurance to

protect their assets in event of a serious health issue

• 51% do not know/are not sure how they would fund their care if they become seriously ill during retirement

*GE Financial: .Source: GE Center for Financial Learning,Conn.

The Opportunity

• Boomers turn 50 at rate of one every sight seconds

• 36% of Ontarians say they or a family member suffers from a chronic disease such as diabetes

• 67% of Canadians say money is their most frequent worry

• 72% of Canadians believe eldercare services for the elderly will be the greatest challenge facing provincial governments in a decade

Women and Long Term Care

• There are more women than men in Canada

• Women live longer - often alone• Women are the principal family caregivers;

they understand the ramifications of LTC• Women are at risk trying to balance career,

family and parents• Many women will be solely responsible for

their financial security and care needs

What Is Long Term Care Insurance?

• A lifestyle product = lifestyle protection

• A risk management tool• Choice• Dignity• Relief from financial stress

The Odds of Using LTC Insurance

1 in 743House Fire (major damage)

1 in 43Auto Accident (totaled)

2 in 5Long term care

(Those who are 65+)

Who Is Your Market?

1. Women2. 50+3. Married with children4. Single people5. Self-employed people6. People with liquid assets7. Corporate benefit plans

Who is Your Market?

• Target market is made up of groups/different concerns:– 45-55 years– 55-65 years– 65+ years

• Different characteristics and needs; no ”one-size-fits-all" mature category

Who Should Consider LTCIThose who wish to:• Preserve financial independence• Avoid being dependent on relatives/friends

for care• Preserve freedom to make care choices• Protect savings, assets and standard of living• Live with dignity and control over quality of

life• Protect the family from catastrophic costs of

long term care

Who Should Consider LTCI

Those who:• Have more than $75,000.00 in assets

(excluding a residence)• Have an annual income of $30,000.00+

(premium should not exceed 7% of your total income)

• Can afford the on-going premiums without changing their lifestyle even if they go up 20-30 percent

• Have a family medical history that puts them at greater risk of needing long term care

Who Sells Individual LTCI

• Sun Life/Clarica• Manulife Financial • RBC Financial• Desjardins• Penncorp• Knights of Columbus • Megacorp/AXA Assurances Inc.

Why Is Selling LTCI a Challenge?

1. Our attitude of entitlement2. “It won’t happen to me”3. “My spouse will look after me”4. “The kids will look after me”5. The government will provide for me6. The product will be there for me ‘when I

need it’7. Cost

What Makes People Buy LTCI?

• When something happens to someone we love or know

• Aging• Fear

Successful Sales People Understand…

• You only have value to your clients if you know more than they do

• It’s the need, not the age group, that’s important

• A solid sale often requires a transfer of beliefs from the agent to the prospect

• Be active, dial and smile, and above all, believe in the need and the product

Best Practices of the ‘Top Guns’*

• Segment their client base• Have a systemized client contact system• Conduct client satisfaction surveys• Have a formalized business plan

• National Post June 29, 2004

LTC - The Planning Process

Planning involves five steps:

1. Needs assessment2. Consideration of options3. Analysis and selection of appropriate

vehicles to accomplish goals4. Implementation of the plan5. Ongoing revision of the plan

Understand the Role of“Risk” Manager

You are “risk”managers and as such your job is to help your clients assess the areas of risk they may face.

If the loss has the

potential to be

catastrophic

– the risk should be insured!

Prospecting Tip: Pre-Qualify The Client Before Starting The Sales

Presentation• Avoiding turndowns is primarily a

function of asking good questions beforehand

• Ask about: – what medications the client is taking

– what diagnosis was behind those medications

– other significant developments in the individual's medical history, such as surgery and hospitalizations

Conversation Opener• “As you know, Bob, I've always done my best to

take care of your financial planning needs. There's a very important need we haven't discussed yet, and that is the need to plan for long-term care. I have learned so much about how important it is that I am contacting all of my clients, regardless of age, and giving them the information they need to plan. It’s your business, as it always is, what you want to do with this information, but as your financial planner, it’s my job to give you this information. Now I can give you the highlights about long term care in about 2 1/2 minutes, then if you see the need, we’ll set a time and move to the next step.”

Sales Tools - Annual Reviews

• An opportunity to ask the client about what changes they’ve had in their life over the past year

• An excellent time to remind the client that long term care planning is a vital consideration in overall financial planning

Sales Tools - Team Selling

• Team up other advisors such as attorneys, CPAs and agents who sell different financial products

• Those individuals already have a trusted relationship with the client, so they can provide additional credible support about long term care planning

• Borrow the authority and prestige of someone on whom the client relies and who does not have a financial stake in LTC insurance

Selling Tips

1. Value is in the eye of the beholder§ Create value before discussing

costs2. Present your clients with at least two

articles on LTC planning3. Talk about LTC insurance in terms of

relationships, not product features and statistics

Selling Tips• Begin a focused conversation about long-

term care needs and the options available to satisfy those potential needs

• Remain upbeat at all times and position yourself as a problem solver and financial expert

• Avoid instilling gloom and doom in your clients and prospects; this may be a turnoff and may cause them to procrastinate or avoid doing anything

Selling Tip: Understand LTC Terms/Definitions

• Adult day care• Hospice care• Respite care• Home care• Assistive devices

Words That Work

• The choice is yours• You decide • Let us help you• Puts you in control • In your own home***• What matters most

Communication Strategies

Suggest a family meeting and offer to facilitate if appropriate. When??• NOW - before a crisis hits!• Help them make decisions together• Help them recognize the speed at

which chaos can descend - from a fall, unexpected medical event or diagnosis - at any age!

The Critical Role of Meetings

1. Prepare an agenda2. Ask what the client needs to discuss

to make the meeting successful3. What’s most important is what the

client thinks is most important4. Take notes and review then before

the next meeting

Communication Strategies

• Ask questions: – How do you see your self aging?

– Have you discussed your wishes with your family?

– Do you know how much long term care costs?

– Do you know how long care may be required?

Do You Have An Elevator Speech?

“I am a retirement planning specialist who helps people make sure they don’t outlive their assets and become destitute in their retirement years.”

Communication Tools

• Newsletters• Articles of interest to the client's

particular line of business • Birthday/holiday/special

occasion greetings• Long term care articles • Long Term Care Planner

Know Your Clients

• Talk with your clients and prospects about their personal family histories

• Find out about the histories of their friends’ parents; this provides additional background to understanding their concerns

• Ask about their families' experiences with disability, stroke, depression and Alzheimer Disease

Wealth Does Not Make One Immune…

• To having a dysfunctional family• To the consequences of poor family

communication• To the consequences of poor

planning…”not me”• To the emotional chaos of caring

Suggestions For Success1. Educate yourself about long term care planning

and the available products2. Investigate, understand and own a policy3. Know and educate your clients4. Plan your presentation5. Know your resources; know how much care costs

in your area 6. Keep up to date on trends7. Build a library8. Be persistent!

ADD VALUE TO EVERYTHING YOU DO.

Karen’s LTC Care Learning/Marketing Tools

• The Long Term Care Planner developed

by Caregiver Network 416.323.1090

• The Caregiver Newsletter published by

Caregiver Network 416.323.1090

• LTC News & Views - e-newsletter

• Caregiver Network www.caregiver.ca

• How to Care www.howtocare.com

Print Resources

• Go for it! A guide to choosing and using assistive devices Health Canada 613.952.7606

• A Guide to Programs and Services for Seniors in Ontario 1.888.910.1999

• The Safe Living Guide Health Canada 1.800.622.6232

Ontario Government Resources

• Province of Ontario: Long Term Care www.gov.on.ca/MBS/english/government/longtermcare.html

• A Guide to Programs and Services for Seniors in Ontario www.gov.on.ca/citizenship/seniors/english/guide.htm or call 1-888-910-1999

• Advance Care Planning Guide www.gov.on.ca/citizenship/seniors/english/advancecare.htm or call 1-888-910-1999

• Ontario Ministry of Health Info Line 1.800.268.1154

Internet Resources-LTC• NACA www.naca.ca

• Canadian Hospice/Palliative Care Association www.chpca.net

• Services for Seniors: Guide to Government of Canada Services for Seniors and their Families

www.communication.gc.ca/guides/seniors_aines/index_e.html

• Health Canada: Division of Aging and Seniors www.phac-aspc.gc.ca/seniors-aines

Internet Resources-LTCI

• Selling LTC.com www.sellingltc.com

• Ron Iverson's Weekly LTC Insurance Newsletter www.centerltc.org/bullets/index.htm

• Mr. Long term Care www.mrltc.com

• LTCinsurance.com www.ltcinsurance.com

• A Shopper’s Guide to Long Term Care Insurance 2003 www.naic.org

• The USAA Educational Foundation www.usaaedfoundation.org

Your Presenter

Karen Henderson EPC, Speaker/Educator/CoachAging and Long Term Care SpecialistFounderCaregiver Network/How to CareTel: 416.323.1090Fax: 416.323.9422Email: karenh@caregiver.on.cawww.caregiver.ca www.howtocare.com

Specialists in helping professional advisors and their clients understand the implications of long term care on all aspects of financial, insurance and estate planning.