Overcoming Objections From The Wealthy & Their Advisors

Agenda…  The market  Creating the correct selling philosophy  Turning the tables: Don’t overcome objections, use them to make the sale  Positioning yourself with Centers of Influence

There are two markets…

The first market…  Clients / prospects who can justifiably cover their care regardless of the cost… Total assets: $10,000,000 Total 5% with MRD  Example: Assuming care is needed for 8 years, 4 of which are in a nursing facility Four years of around the clock $700,000 Four years of nursing home $400,000

 Their centers of influence: CPA’s / accountants Financial advisors (FA) Estate planning attorneys  Their argument: Clients have sufficient funds to cover the cost What about the lost investment opportunity if the policy is purchased and never used?

Creating the correct selling philosophy: selling philosophy: Consultative Engagement

 The client is educated about how severe the consequences to those he (or she) would be if (never when) and unexpected event happened in his life  Once educated he is forced to make a decision…

 He may decide the consequences of providing care are not severe… “That’s the responsibility of my wife..” “I took care of the kids, they can return the favor…”  Or he may decide those consequences are so severe that he will let you put together a plan to mitigate them

There are two sets of consequences…  Extended care is caused by a cognitive and or physical impairment  By definition they severely compromise the individual which means…  By definition he is no longer safe. Therefore…  By definition providing care must be all- consuming

 By definition, providing care to a chronically ill person makes healthy caregivers chronically ill  By definition, it requires that a child put aside his or her life  By definition, providing care doesn’t bring families together, it tears them apart  Put simply, if your client ever needs care over a period of years, his life won’t end…

Someone else’s life will end

 The second set of consequences is no less severe…  By definition, paying for care requires a reallocation of income and assets. Therefore…  By definition paying for extended care disrupts every plan established by the client and his or her advisor to secure financial viability during retirement…

 Paying for care disrupts a…  Tax plan  Plan to generate sufficient income to keep financial promises  Plan to wait out a down market  Special needs plan  Charitable giving plan  Plan to secure financial viability of surviving spouse

 Consequences are mitigated, not by a product but a plan  The plan is to keep the client safe in the community while Preserving the emotional & physical wellbeing of those he loves Preserving the retirement portfolio

Once the plan is created the question is, what will fund it? How To Sell LTCi to the Affluent

 Do not argue with the following objections…  “I have sufficient assets to cover the cost of care” or “What if I never use LTCi”  Rather agree and then, in a matter of fact tone explain…

 “You can, but if I may, let me share a couple of observations”  Reagrdless of your financial resources it doesn’t answer three critical issues: Who will provide the care? Where will it be provided? How will it be coordinated over the years?  Explain that by definition he would not be able to make those decisions which means his family would be forced to

 Then explain the true cost of care…  Liquidity  The taxes on liquidating assets  Market timing  Length of time care could be needed  Lost investment opportunity

WealthSecure: A web based program that quantifies the cost of self-insuring

 WealthSecure allows you to confidently answer the two classic objections raised by the affluent… “I can self-insure the cost” “What if I never use long-term care insurance?”  …by providing the tools you need to illustrate the consequences of those statements. The client can then make his or her own decision as to whether he wants to self-insure the cost

Here’s how it works…

 You are provided with a comprehensive program that allows you to input… The client’s current & projected income at retirement Current & projected return on investments Projected costs of care  Illustrations are then presented that address…

“What if I never use the product”  WealthSecure integrates the products return of premium at death option with state tax credit or deduction (f available) to illustrate…  How, if LTCi is never used, the total transaction essentially become revenue neutral: no loss of premium and minimum loss of investment opportunity

“I’ll simply self-fund the event”  The program gives a comprehensive analysis of the true financial cost of self-insuring. It addresses… The tax consequences, in effect showing that there is a substantial levy on paying for care The lost investment opportunity on those funds You are reminded to suggest that using these funds came from the sale of assets at the top of the market

And then the client is given an analysis of how LTCi is a sound investment if care is ever needed…

 The program puts into simple to understand numbers how LTCi becomes an investment. Here’s how…  Cost and length of care assumptions are extended to a definable cost. Then…  Net LTCi payments (actual payout less premium and lost investment opportunity) are deducted from the cost of care. The client is then left with…  An internal rate of return

Case study: Wealthy NY investor (NY grants a 20% state tax credit)

Profile  Financial picture $700,000 of CDs and equivalents $6,000,000 IRA & 401k 5% earnings rate before tax on funds 45% tax bracket  Will need LTC at age 80 for 8 years $175,200 annual cost in 3.5% CPI  age 60 pays $8,000 per year for lifetime benefit $400 per day 5% simple COLA Return of premium

Analysis if LTCi is never used…  Age at date of death: 80 Cumulative net of tax premium x 20 years: $134,400 Value of premium if 3.5% x 20 yrs $189,035 Refund at death:$168,000 Loss:($21,035) Net Present 3.5%($10,571)

…or the client can use his IRA to self- fund care  Value of IRA age 5% $15,919,786  Cost of care per year for 8 years $ 2,813,808  Tax consequences assuming a 40% bracket… $2,813,808 x 45% = $1,266,  $2,813,808 for care + $1,266,213 tax: ($4,080,021)  IRA start: $15,919,786 - $3,939,331 $11,839,765  Versus net present value loss of $10,571 if care is never needed

*Assuming 3.5% compound of $172,500 / yr for home care starting at age …or LTCi is used…  At age 80 (year 21 of the policy) for 8 years 24 hour home care for 8 years* $2,813,808 LTCi benefit paid after 8 years$2,505,600 Investment account (premium 3.5% x 20) ($ 189,035) Gain from investment$2,316,565 Net out of pocket not factoring premium($ 308,208)

Illustrations can be crafted for… 1.Non- New York investor 2.Highly compensated executives 3.Public C-Corporations

Positioning yourself with Centers Of Influence Centers Of Influence

 You should not position yourself as a long-term care insurance professional  You are a professional in the filed of extended care planning  Extended care is not a product issue, it’s a planning issue  Your job is to educate COI’s about a set of consequences that if left unaddressed by him or her will cause damage to the client’s family

The cost? Just $ That’s more than 60% off the regular $ price

 For more information go to:  To watch a video demonstration go to: