Overcoming Objections From

1

• Overcoming Objections From
• The Wealthy Their Advisors

2
Agenda

• The market
• Creating the correct selling philosophy
• Turning the tables Dont overcome objections,
  use them to make the sale
• Positioning yourself with Centers of Influence

3

• There are two markets

4
The first market

• Clients / prospects who can justifiably cover
  their care regardless of the cost
• Total assets 10,000,000
• Total income 600,000 _at_ 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 care _at_175,000
  700,000
• Four years of nursing home care _at_100,000
  400,000

5

• Their centers of influence
• CPAs / 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?

6

• Creating the correct
• selling philosophy
• Consultative Engagement

7

• 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

8

• He may decide the consequences of providing care
  are not severe
• Thats 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

9
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

10

• 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 doesnt bring
  families together, it tears them apart
• Put simply, if your client ever needs care over a
  period of years, his life wont end

11

• Someone elses life will end

12

• 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

13

• 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

14

• 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

15

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

16

• 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

17

• You can, but if I may, let me share a couple of
  observations
• Reagrdless of your financial resources it doesnt
  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

18

• 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

19

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

20

• 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

21
Heres how it works
22

• You are provided with a comprehensive program
  that allows you to input
• The clients current projected income at
  retirement
• Current projected return on investments
• Projected costs of care
• Illustrations are then presented that address

23

• 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

24

• Ill 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

25
And then the client is given an analysis of how
LTCi is a sound investment if care is ever needed
26

• The program puts into simple to understand
  numbers how LTCi becomes an investment. Heres
  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

27
Case study Wealthy NY investor(NY grants a 20
state tax credit)
28
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 2010 _at_ 3.5 CPI
• Client _at_ age 60 pays 8,000 per year for lifetime
  benefit
• 400 per day
• 5 simple COLA
• Return of premium

29
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 invested _at_ 3.5 x 20
  yrs 189,035
• Refund at death 168,000
• Loss (21,035)
• Net Present value _at_ 3.5 (10,571)

30
or the client can use his IRA to self- fund care

• Value of IRA age 80 _at_ 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 1,266,213.00
• 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

31
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 invested _at_ 3.5 x 20) (
  189,035)
• Gain from investment 2,316,565
• Net out of pocket not
• factoring premium ( 308,208)

32

• Illustrations can be crafted for
• Non- New York investor
• Highly compensated executives
• Public C-Corporations

33

• Positioning yourself with
• Centers Of Influence

34

• 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, its a
  planning issue
• Your job is to educate COIs about a set of
  consequences that if left unaddressed by him or
  her will cause damage to the clients family

35

• The cost?
• Just 69.95.
• Thats more than 60 off the regular
• 149.95 price

36

• For more information go to
• www.wealthsecure.com/brochurecontact.com
• To watch a video demonstration go to
• www.wealthsecure.com/video.asp