Long-Term Care Insurance Multi-Life Discount Program

1
Long-Term Care InsuranceMulti-Life Discount
Program

• Metropolitan Life Insurance Company New York,
  NY 10166
• PRODUCER OR BROKER/DEALER TRAINING USE ONLYNOT
  TO BE USED WITH GENERAL PUBLIC
• L06087162exp1209
• LTC 04730(0608)

2
Why LTCI Multi-Life Discount Programs?

• Producer
• Multiple policy sales potential
• Door opener for other financial service needs
• Discounted premium rates for employees and
  eligible family members
• Reduced underwriting requirements compared with
  individual policies sold outside the workplace
• Opportunity to substantially increase book of
  business
• Cross-sell opportunities with the employer for
  other employee benefits broker may offer

3
Why LTCI Multi-Life Discount Programs?

• Employer
• Help maximize recruitment and retention of
  employees
• Help minimize productivity losses due to
  caregiver distractions
• i.e. when parent or spouse has coverage and
  becomes chronically ill, the employee is less
  likely to require time off or be distracted while
  at work
• Achieve potential tax deductions for businesses
  (if employer pays the premium)
• Help employees protect their retirement
  savings/assets from potentially high costs of LTC
  events

MetLife does not provide tax and legal advice.
Clients should consult their attorney and /or tax
advisor.
4
Why LTCI Multi-Life (continued)?

• Employer Considerations
• American businesses lose between 17.1 - 33.6
  Billion in productivity costs per year1
• Productivity costs include replacing employees,
  absenteeism, workday interruptions, unpaid leave
  and reducing hours from full-time to part-time
• Based on employees making workplace
  accommodations as a result of caregiving
  responsibilities
• Eldercare calculator
• www.eldercarecalulator.org drills down this
  figure on an individual employer basis

Source MetLife Mature Market Institute,
MetLife Caregiving Cost Study Productivity
Losses to U.S. Business, July 2006
5
Why LTCI Multi-Life (continued)?

• Employee Productivity Concerns
• More than one-fifth (22) of the sandwich
  generation furnish aid to their parents, other
  elderly family members, or both.
• 17 personally provide help, which may include
  financial as well as other forms of assistance,
  and another 5 bestow financial support alone.
• From 1996 to 2001
• 43 of older boomers have taken time off from
  their own jobs to care for someone
• 17 have reduced the amount of time they work

Source AARP, In the Middle A Report on
Multicultural Boomers Coping with Family and
Aging Issues, July 2001.
6
Why LTCI Multi-Life (continued)?

• Employee Concerns
• With the aging workforce, childcare concerns are
  being replaced with eldercare issues
• LTC Insurance for eligible family members can
  help reduce future employee job disruptions
• With LTC Insurance, the caregiver nearly twice as
  likely to continue working
• Caregivers can have more quality time and leave
  hands-on assistance to care service providers

Source MetLife Study of Employed Caregivers
Does Long-Term Care Insurance Make a Difference?
2001.
7
Why MetLife?

• Multi-Life Competitive Advantages
• MetLife is a leading carrier in the
  employer-sponsored LTCI market
• Simple participation requirements
• All eligibles count towards participation
  requirements
• Minimum requirement of 3 lives to establish a
  group
• No reduction in commission for 10 life segment
• Reduced underwriting for everyone
• Spouse can have access to simplified underwriting
  if Employer-Paid
• 10 Multi-Life discount available (employer-paid
  simplified underwriting)
• Does not apply in the 3-9 life segment

8
Eligibility for Multi-Life Discount Program

• Employees/Retirees and their
• Spouses/Domestic Partners
• Adult Children
• Parents and Parents-in-law (including step)
• Grandparents and Grandparents-in-law (including
  step)
• State variations may apply to eligible
  participants
• Spouses include, where permitted by law,
  Domestic Partners and Civil Union Partners

All participants must be age 18 to 84
9
Multi-Life Discount Programs

• Four Program Options
• Employer-Paid Simplified Underwriting Program -
  10 Discount
• Employer-Paid Modified Underwriting Program -
  5 Discount
• Voluntary-Paid Simplified Underwriting Program -
  5 Discount
• Voluntary-Paid Modified Underwriting Program -
  5 Discount
• Discounts may vary by state.
• Employer may pay full or partial premium,
  however minimum contribution levels may apply

The discount program must be selected during the
case review process
10
Participation Minimums

• Two Participation Categories
• 3 9 life segment
• 10 life segment (No reduction of commission)

11
Participation Minimums

• Modified Underwriting Programs
• Voluntary or employer-paid
• At least 3 insured lives (all eligibles) must be
  received by MetLife within 12 months of case
  approval

• Simplified Underwriting Programs
• Voluntary
• At least 10 insured lives (all eligibles) must be
  received by MetLife within 90 days of case
  approval (3-9 life segment not available)
• Employer-paid
• At least 3 insured lives (employer-paid,
  employees) must be received by MetLife within 90
  days of case approval

12
Multi-Life Discount Programs

• If the employer chooses a
• Modified Underwriting Program
• All eligible applicants must meet the Modified
  Underwriting requirements
• Preferred Health discount is available to any
  qualified, approved applicant
• Household discounts available to any qualified,
  approved applicant
• All features and options are available with
  Modified Underwriting

13
Multi-Life Discount Programs

• If the employer chooses a
• Simplified Underwriting Program
• Employees and employer-paid spouses, age 65 and
  younger, may apply by meeting Simplified
  Underwriting requirements
• All other eligible applicants must meet Modified
  Underwriting requirements
• Preferred Health discount is NOT available to any
  applicants within the group
• Household discounts are available to any
  qualified, approved applicant
• Benefit limitations apply

Employee must meet actively at work
requirement, and apply during initial enrollment
period. Spouses must be employer-paid and apply
during initial enrollment period. Benefit
limitations apply.
14
Multi-Life Discount Programs

• Executive Carve-Out Programs
• LTCI is a discriminatory plan which allows the
  employer to make contributions towards the
  premium of a select class of employees the
  remaining employees will have access to the
  discount program on a voluntary basis.

• For example
• The employer agrees to pay the LTCI premium for
  the 5 executives (executive carve-out) and
• The remaining 25 employees are offered the same
  discount on a voluntary basis.

Note There may be ERISA implications depending
on how LTCI policies are made available to the
employees. Employers should consult their own
tax and legal advisors for further information on
potential ERISA implications.
15
Modified Underwriting Requirements

• Available to
• All eligible participants
• Medical questions similar to individual sales
• Age ranges for requirements more lenient than
  individual sales

16
Simplified Underwriting Requirements

• Available to
• Employees age 65 and younger actively at work (
  spouses/domestic partners 65 and younger if
  premium paid by employer)
• Must be applying during initial 90-day enrollment
  period
• Must be applying for coverage within benefit
  limitations (see below)
• All other applicants must meet Modified
  Underwriting Requirements
• Simplified Underwriting Maximum Benefits
• VIP2 5 year benefit period, 300 DBA
• LifeStage Advantage
• 6k MBA/300k TBA (Simple Advantage)
• 9k MBA/500k TBA (Custom Advantage)
• All other benefits available
• State variations may apply

17
Modified Vs Simplified Underwriting What to
Choose?

• Simplified Underwriting
• Pros
• 5 Insurability Questions for eligible employees
• Ease of enrollment
• Employer-paid spouses eligible if group is set-up
  in the 10 life segment
• Cons
• Preferred Health Discount not available to anyone
  in group
• Benefit limitations
• Limited to 90-day enrollment period

• Modified Underwriting
• Pros
• Fewer medical questions than standard
  non-Multi-Life policy underwriting
• Preferred Health Discount available
• More benefit options available
• Cons
• Additional underwriting may be considered (phone
  and face-to-face interviews) for applicants under
  age 66, if their health warrants it
• Longer underwriting process
• Potential for more declines

18
Available LTCI Discounts

• Spousal/Domestic Partners
• 30 when two spouses apply and are approved for
  coverage
• Marital
• 15 when only one spouse applies or both apply
  but only one receives coverage
• Residential
• 15 when two or more applicants reside in the
  same household and meet eligibility requirements
• Preferred Health
• 10 for applicants who meet specific
  underwriting criteria and are not part of a
  Simplified Underwriting Multi-Life Program

Note Spousal/Marital/Residential discounts may
vary by state and may not be combined
19
Sample Discount Combinations
Modified Underwriting Voluntary or ER Paid
Multi-Life 5 30 Spousal/Domestic Partner
10 Preferred Health 45 Voluntary or ER Paid
Multi-Life 5 15 Marital/Domestic Partner
10 Preferred Health 30 Simplified
Underwriting ER Paid Multi-Life 10 30
Spousal/Domestic Partner 40 ER Paid Multi-Life
10 15 Marital/Domestic Partner
25 Voluntary Multi-Life 5 30
Spousal/Domestic Partner 35 Voluntary
Multi-Life 5 15 Marital/Domestic Partner 20
Note Spousal/Marital discounts may vary and be
limited by state
20
Multi-Life Billing

• Choice of Billing Options
• Direct Billing
• Available to all eligibles
• Monthly (Automatic Checking Account Deduction),
  Quarterly, Semi-Annual or Annual basis
• Bills are mailed directly to the insured unless
  it is a Monthly direct bill, which is only
  available as an Automatic Checking Account
  Deduction
• 3rd Party Billing
• Available to all eligibles
• Bills are mailed to a third-party payor selected
  on the application on a Quarterly, Semi-Annual or
  Annual basis
• Employer List Billing
• Available to employee their spouse only
• Monthly statement sent to Employer or Payroll
  Vendor
• Cash with application not acceptable
• Split Billing
• Available to employee their spouse only

21
ERISA and Employer-Sponsored Plans

• The Employee Retirement Income Security Act
  (ERISA)
• Enacted in 1974
• Employer must specify to carrier whether the LTCI
  Plan they make available to their employees is
  considered an ERISA or non-ERISA plan
• If employer requests, please provide a copy of
  the ERISA Monograph, which includes a sample
  Summary Plan Description (SPD).
• Ask your Multi-Life Program Advisor for a copy

Please refer your client/prospect to consult with
their tax/legal advisor to determine ERISA status
22
LTCI Taxation Summary
Under certain Internal Revenue Code (IRC)
sections, such as 7702(B), tax qualified (TQ)
LTCI policies may receive favorable tax
treatment. For example, benefits received from
an employer-paid TQ LTCI policy are generally
non-taxable to the employee, and the
employer-paid LTCI premiums for employees may be
tax deductible to the employer.
No deduction allowed on coverage for the owner,
spouse or dependents if the owner is eligible to
participate in any other employer-subsidized
(wholly or partially-paid) plan including that of
a spouses employer
Employers should consult their own tax and legal
advisors. The IRS Tax Codes that reference this
summary are as follows 104(a)(3), 162(l),
213(d), 7702B(a), 7702B(a)(3), 7702B(d)(2), Rev.
Proc. 206-53
23
LTCI Taxation Summary (Continued)
No deduction allowed on coverage for the owner,
spouse or dependents if the owner is eligible to
participate in any other employer-subsidized
(wholly or partially-paid) plan including that of
a spouses employer
Employers should consult their own tax and legal
advisors. The IRS Tax Codes that reference this
summary are as follows 104(a)(3), 162(l),
213(d), 7702B(a), 7702B(a)(3), 7702B(d)(2), Rev.
Proc. 206-53
24
Important to know

• Portable Discount and coverage stays with
  employee if they leave the company
• No linkage required Employee does not have to
  apply for family members to be eligible
• Employer-Paid Partial or full payment acceptable
  must be paid by employer (minimum contribution
  levels may apply)
• Exclusivity Producer owns the rights to the
  discount for the group

25
The Trend Sizes of Companies Offering LTCI
Source HIAA ILTC Survey, 2002.
By the end of 2001, more than 4,700 employers
were offering a Long-Term Care Insurance plan
to their employees, retirees or both. HIAA.
Long-Term Care Insurance in 2000-2001, January
2003.
26
Preferred LTCI Multi-Life Business Characteristics

• Recommended
• Small, closely held businesses (25 3,000
  employees), including
• Law Accounting Firms
• Banks Financial Institutions
• School Districts
• Technology Companies
• Carve-out employee groups
• Employer interest support
• Stand alone offering
• Few locations
• Stable Industry
• Employee average age gt40 yrs
• Employee income gt50,000

• Not Recommended
• Building trade contractors
• Charitable organizations
• Warehouse workers
• Unions
• Seasonal employees
• Foodservice workers
• No or little employer support
• Unrealistic enrollment timeline
• Complex plan design/requests
• Multiple carriers involved
• Multiple locations for enrollment

27
Recommended Business Types

• Small closely held/family businesses for
  executive carve-out cases
• Medical practices, healthcare
• Educational
• Financial, accounting and insurance
• Law firms
• Technology firms

28
Keys to Successful LTCI Plan Participation

• Employer support
• Simple plan design 3 plan variations
• Strong marketing communications strategy that
  includes preliminary needs awareness building
• Enrollment implementation with 8-11 employee
  communication touch points
• Sufficient lead time for implementation
• 60 90 days

29
Importance of Employer Support

• Employers help create multiple employee
  touch-points and can provide you with employee
  access
• Enforce mandatory seminars and one-on-one LTC
  educational meetings either during or after
  business hours
• Meetings after business hours will allow eligible
  family members to attend
• Assist with distribution of materials
• E-mail and home address lists
• Provide a designated employer point-of-Contact
• Ability to facilitate payroll deduction, if list
  bill

30
When Are LTCI Offerings Not Successful?

• Lack of producer access to employees during
  pre-awareness campaign, program launch and
  enrollment
• Too many voluntary offerings competing for the
  same employee dollar
• Majority of employee population is under age 40
  years with an annual salary below 50,000
• Unrealistic implementation timeframe
• Unclear need or low interest for LTCI
• Complex plan design with too many choices

31
Multi-Life Sales Support

• Multi-Life Program Advisor
• Responsible for group set-up
• Communicates with Producer/GA
• LTCI Wholesaler Team
• Training/Education
• Marketing strategies
• LTCI Resource Line
• Program Overview/ General Assistance
• Quotes/Proposals

32
Multi-Life Program Advisor

• Actively manage inbound Multi-Life calls
• Owns case from beginning to end
• Responsible for
• Agent consultation process/rules/options
• Illustration support
• Group review/approval
• Implementation meeting
• Follow up feedback
• Implementation meetings are mandatory for cases
  that are set up on a list bill

33
Multi-Life Approval Process

• Step 1 MGA/Producer to send qualification
  form(s) to MetLife
• We will review group within 1-2 business days
• Applications should never be taken at this stage
• Step 2 MetLife to send offer letter to
  MGA/Producer
• Authorized officer from organization to sign
  offer letter and return to producer
• Producer to provide signed letter to MetLife
• Step 3 Formal approval
• MetLife will assign the Multi-Life Group number
• MetLife will inform the MGA/Producer of correct
  applications to use
• MGA/Producer can begin to market discount and
  enrollments

34
Quotes Proposals

• Quote/Illustration
• Available on MetWINS
• Introduction Illustration
• Side by side of 3 plan designs for ages 18-84
• Suitable for any group interested in our pricing
• Summary Illustration
• Detailed quote for each employee within group
• Suitable for employer paid situations
• Multi-Life Web-site

• Proposal
• Used for bidding situations or when employer
  wants detail on MetLife and the LTC offering
• Must be pre-qualified
• Prepared by Multi-Life coordinator
• Customized for employer
• E-mailed to producer

35
Additional Information Sheets

• Handout Material
• Multi-Life Underwriting Program Overview
• ERISA Monograph
• Identifying Prospective Companies Sheet

36
QUESTIONS?