Can Group and MultiLife Coexist

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Can Group and Multi-Life Coexist?

• Session 28 February 28, 2006
• Session Producer
• Jodi Anatole, Vice President
• MetLife

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Can Group and Multi-Life Coexist?
February 28, 2006
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True Group vs. Multi-Life Options Cathi-Lynne
Ames National Sales Director MetLife LTC When
Does Multi-Life Make Sense? Roch
Rodrigue President and CEO The Todd Benefits
Group, Inc. When Does Group Make
Sense? Christine McCullugh President LTC
Solutions, Inc.
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True Group vs Multi-Life Options

• Cathi-Lynne Ames National Sales Director
  MetLife Long Term Care

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Employer Sponsorship of LTC
Source LIMRA, 1999-2004
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Employee Participation in LTC
Source LIMRA, 1999-2004
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Traditional Market
Yesterday
GROUP LTC
INDIVIDUAL LTC
Ages 30s 40s 50s 60s
70s
All Charts for Illustrative Purposes Only
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Traditional Market
Yesterday
GROUP LTC
INDIVIDUAL LTC
Employer Size 10,000 5,000 3,000
500 0
All Charts for Illustrative Purposes Only
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Traditional Market
Yesterday
GROUP LTC
INDIVIDUAL LTC
The Market
All Charts for Illustrative Purposes Only
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Blurring Market
Today
GROUP LTC
INDIVIDUAL LTC
Ages 30s 40s 50s 60s
70s
All Charts for Illustrative Purposes Only
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Blurring Market
Today
GROUP LTC
INDIVIDUAL LTC
Employer Size 10,000 5,000 3,000
500 0
All Charts for Illustrative Purposes Only
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Blurring Market
Today
DISTRIBUTION MANAGEMENT
The Market
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Group LTC Highlights

• Group Master Policy issued to employer/sponsor
• Certificates of Insurance issued to each insured
• Group premium structure
• Typically GI for active employees
• Payroll deduction
• Employer commitment and involvement
• Carrier-driven solicitation and enrollment
• Portability

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Multi-Life LTC Highlights

• Individual policies issued to each insured
• Greater flexibility/customization at individual
  level
• Discounted standard rates
• SI for active employees
• Payroll deduction
• Agent/broker-driven solicitation and enrollment
• Portability

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Ideal Markets - Group

• Size
• Demographics - 40/40 rule
• Target industry
• Limited number of locations
• Electronic access to employees
• Corporate commitment
• Voluntary benefit experience

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Ideal Markets - Multi-Life

• Size
• Demographics - 40/40 rule
• Target industry
• Limited number of locations
• Electronic access to employees
• Corporate commitment
• Voluntary benefit experience

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Square Pegs - Square Holes

• Focus
• Different strategies for different subsets
• Executives
• Rank and File
• Retirees
• Design should match client needs/wants
• Think outside the box!!

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When Does Multi-Life Make Sense?
Roch Rodrigue - President and CEO The Todd
Benefits Group, Inc.
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Multi-Life (ML) Advantages

• Individual Advantages
• Better/more flexible contract
• Unlimited benefit configurations
• Diverse coverage needs
• Ability to customize plan design
• True portability requires no employee action
• Administration/ownership of contract
• More optional features
• Accelerated payment options
• Better participation (voluntary plans)
• When explained Its what employees prefer

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ML Advantage...

• Discounts Available To
• Employee/spouse partner
• Retiree/spouse partner
• Family members
• Discount Programs
• Group sponsored discount
• Preferred risk
• Couples discount (each spouse)

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ML Market Size

• Small (2 500 Lives)
• Executive carve out
• Employer paid base plans
• Large (501 5000)
• Voluntary (with right demographics)
• Executive carve out/employer paid base plans
• Jumbo (5000)
• Voluntary (with right demographics)
• Analyze census for potential

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ML Product Issues

• The right carrier platform
• The right plan design
• Customized with no limitations
• Unlimited options
• Built-in level inflation vs. Attained age
• MGSI vs. Full underwriting
• No Preferred Rate

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ML Compensation Issues

• High/low commission structure
• Small case enrolled by producer
• All comp to producer
• Large case with strategic partner
• Reduced comp
• Usually finders fee or
• On application with commission split

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ML Underwriting Issues

• Full underwriting
• Preferred by some companies
• Premiums are not subsidized by all employees
• Preferred rate available if qualify
• Modified Guaranteed Issue/Simplified UW
• Shorter application
• 5 questions/many conditions
• Preferred discount not available
• Reduced UW may be available to spouse if
  employer paid
• Is True Group GI the right way to go?

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Multi Life Markets

• Employers large and small
• More opportunities
• Employees
• Retirees
• Family Members
• The right association groups
• Family members
• Retirees
• Carve outs/base plans

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ML Challenges

• Must be licensed in each state/not just
  corporate situs
• Pure GI vs. MGI/No GI
• Web site must be approved in all jurisdictions
• Overcoming the corporate mentality that if
  its a benefit it has to be group

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Multi Life Keys to Success

• Employer support/commitment
• Viewed as core not voluntary benefit
• Group information meetings
• Communications/education
• Employer agreement to communications plan
• get in writing
• Set the right expectations

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Bottom Line Multi Life LTCi

• Is the right thing to do for
• The participant
• The employer

Should be once in a lifetime purchase decision
- done the right way the first time!
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When Does Group Makes Sense
Christine McCullugh, President and Founder LTC
Solutions, Inc.
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Advantages of True Group

• One Product
• Based on employer headquarters
• Guaranteed Issue
• No health questions
• Billing
• Electronic feed available, list bills operate
  smoothly
• Carrier Website
• Carrier offers online enrollment and/or
  informational website customized to employer
• Consistent Offering
• Product introduced remains the same regardless if
  a new generation is introduced

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Advantages of True Group

• Two Plans in One
• Ability to offer voluntary plan and executive
  carve out with different options
• Portability
• Same plan design at the same rates
• Flexibility of Plan Design Options
• Ease of enrollment and individuals purchase
  coverage
• Certificate
• Offered through employer group plan
• Rate guarantees
• Reserve transfer

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Coverage Options Purchased Based Upon Product
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Coverage Options Purchased Based Upon Product
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Marketing Strategy

• Consistent with Voluntary Benefits
• Follows same process as most voluntary benefits
• Initial enrollment Guaranteed Issue
• Open enrollment once a year
• Ease of Enrollment
• Plan design options flexible
• All plan information available and understandable
  to employees
• Toll free support
• Enrollers

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Marketing Strategy

• RFP Creates an Opportunity for Negotiation
• Not an off the shelf product
• Employer who funds or has great demographics has
  more leverage
• 500 employees Voluntary or Funded

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Product Issues

• Different Requirements
• Carriers can determine if they will quote a case
• Carrier can specify funding requirements,
  participation requirements or demographic
  requirements
• Guaranteed Issue
• Offered only at the initial enrollment
• Make the most of it!
• New Hire Enrollment
• Guaranteed Issue during benefit eligibility
  very few purchase

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Product Issues

• Retirees and Family Members
• Less than 1 purchase (excluding spouses)
• Carve Out Plans
• Some carriers do not offer standard executive
  options like an accelerated payment option
• Funding Plan Design Limitations
• Employer funding not available
• choose from

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Compensation Issues

• Lower Commissions
• Net Commissions to 20 Level
• Average Participation and Premium Less Revenue
  for the Broker/Agent
• Broker of Record
• Not Vested Business
• Enrollment Support Limited
• Some carriers only offer enrollment meetings with
  locations that have a large number of employees

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Group Long Term Care Insurance Success

• Human Resources Involved
• Requires commitment and creativity to get
  employees to meetings
• Requires HR staff follow enrollment strategy and
  completing their tasks on time
• Funding or Mandatory Meetings
• Comprehensive Enrollment Campaign