long-term care insurance multi-life discount program metropolitan life insurance company new york,...
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Long-Term Care InsuranceMulti-Life Discount Program
Metropolitan Life Insurance Company • New York, NY 10166
PRODUCER OR BROKER/DEALER TRAINING USE ONLY—NOT TO BE USED WITH GENERAL PUBLICL06087162[exp1209]
LTC 04730(0608)
2PRODUCER OR BROKER/DEALER TRAINING USE ONLY — NOT TO BE USED WITH GENERAL PUBLIC
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
3PRODUCER OR BROKER/DEALER TRAINING USE ONLY — NOT TO BE USED WITH GENERAL PUBLIC
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.
4PRODUCER OR BROKER/DEALER TRAINING USE ONLY — NOT TO BE USED WITH GENERAL PUBLIC
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
5PRODUCER OR BROKER/DEALER TRAINING USE ONLY — NOT TO BE USED WITH GENERAL PUBLIC
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.
Why LTCI Multi-Life (continued)?
6PRODUCER OR BROKER/DEALER TRAINING USE ONLY — NOT TO BE USED WITH GENERAL PUBLIC
Source: MetLife Study of Employed Caregivers: Does Long-Term Care Insurance Make a Difference? 2001.
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
7PRODUCER OR BROKER/DEALER TRAINING USE ONLY — NOT TO BE USED WITH GENERAL PUBLIC
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
8PRODUCER OR BROKER/DEALER TRAINING USE ONLY — NOT TO BE USED WITH GENERAL PUBLIC
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
9PRODUCER OR BROKER/DEALER TRAINING USE ONLY — NOT TO BE USED WITH GENERAL PUBLIC
Multi-Life Discount Programs
Four Program Options:
1. Employer-Paid*; Simplified Underwriting Program - 10% Discount
2. Employer-Paid*; Modified Underwriting Program - 5% Discount
3. Voluntary-Paid; Simplified Underwriting Program - 5% Discount
4. 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
10PRODUCER OR BROKER/DEALER TRAINING USE ONLY — NOT TO BE USED WITH GENERAL PUBLIC
Participation Minimums
Two Participation Categories:
• 3 – 9 life segment
• 10+ life segment (No reduction of commission)
11PRODUCER OR BROKER/DEALER TRAINING USE ONLY — NOT TO BE USED WITH GENERAL PUBLIC
Participation Minimums
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
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
12PRODUCER OR BROKER/DEALER TRAINING USE ONLY — NOT TO BE USED WITH GENERAL PUBLIC
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
13PRODUCER OR BROKER/DEALER TRAINING USE ONLY — NOT TO BE USED WITH GENERAL PUBLIC
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.
14PRODUCER OR BROKER/DEALER TRAINING USE ONLY — NOT TO BE USED WITH GENERAL PUBLIC
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:1. The employer agrees to pay the LTCI premium for the 5 executives
(executive carve-out); and 2. 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.
15PRODUCER OR BROKER/DEALER TRAINING USE ONLY — NOT TO BE USED WITH GENERAL PUBLIC
Modified Underwriting Requirements
• Available to:– All eligible participants
– Medical questions similar to individual sales
– Age ranges for requirements more lenient than individual sales
Requirement* AgesMulti-Life Application - “Modified Questions” completed
All applicants
Attending Physician’s Statement (APS)
Applicants age 66-84
Phone Health Interview (PHI)
Applicants age 66-69
Face-to-Face Nurse Interview
Applicants age 70-84
*All requirements may be deemed necessary by Underwriter, if applicant’s health warrants it.
16PRODUCER OR BROKER/DEALER TRAINING USE ONLY — NOT TO BE USED WITH GENERAL PUBLIC
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
Requirement Ages
Multi-Life Application -5 “Simplified Questions” completed
Employees age 18-65
Multi-Life Application -6 “Simplified Questions” completed
Employer-paid spouses age 18-65
17PRODUCER OR BROKER/DEALER TRAINING USE ONLY — NOT TO BE USED WITH GENERAL PUBLIC
Modified Vs Simplified Underwriting What to Choose?
Simplified UnderwritingPros:+ 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 UnderwritingPros:+ 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
18PRODUCER OR BROKER/DEALER TRAINING USE ONLY — NOT TO BE USED WITH GENERAL PUBLIC
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
19PRODUCER OR BROKER/DEALER TRAINING USE ONLY — NOT TO BE USED WITH GENERAL PUBLIC
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%
Sample Discount Combinations
Note Spousal/Marital discounts may vary and be limited by state
20PRODUCER OR BROKER/DEALER TRAINING USE ONLY — NOT TO BE USED WITH GENERAL PUBLIC
Multi-Life Billing
Choice of Billing Options1) 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
2) 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
3) Employer List Billing – Available to: employee & their spouse only– Monthly statement sent to Employer or Payroll Vendor– Cash with application not acceptable
4) [Split Billing]– [Available to: employee & their spouse only]
21PRODUCER OR BROKER/DEALER TRAINING USE ONLY — NOT TO BE USED WITH GENERAL PUBLIC
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
22PRODUCER OR BROKER/DEALER TRAINING USE ONLY — NOT TO BE USED WITH GENERAL PUBLIC
LTCI Taxation Summary
C-Corporation S-Corporation
Business Tax Deduction
100% of total premiums paid
100% of total premiums paid
Personal Tax Deductions to Owner(s)*
None Owners of more than 2% stock can deduct 100% of “eligible” premiums paid for themselves, their spouses and qualified dependents on their personal tax returns
Income Tax to Employee’s (premiums paid by employer)
Generally None Generally None
Income Tax to Owner(s)
Generally None Must declare premiums paid on behalf of themselves, their spouses and dependents as income
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
* 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 spouse’s employer
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.
23PRODUCER OR BROKER/DEALER TRAINING USE ONLY — NOT TO BE USED WITH GENERAL PUBLIC
LTCI Taxation Summary (Continued)
Partnership Sole Proprietor
Business Tax Deduction
100% of total premiums paid 100% of total premiums paid
Personal Tax Deductions to Owner(s)*
Partners can deduct 100% of “eligible” premiums paid for themselves, their spouses and qualified dependents on their personal tax returns
The owner can deduct 100% of “eligible” premiums paid for themselves, their spouses and qualified dependents on their personal tax returns
Income Tax to Employee’s (premiums paid by employer)
Generally None Generally None
Income Tax to Owner(s)
Must declare premiums paid on behalf of themselves, their spouses and dependents as income
Must declare premiums paid on behalf of themselves, their spouses and dependents as income
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
* 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 spouse’s employer
24PRODUCER OR BROKER/DEALER TRAINING USE ONLY — NOT TO BE USED WITH GENERAL PUBLIC
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
25PRODUCER OR BROKER/DEALER TRAINING USE ONLY — NOT TO BE USED WITH GENERAL PUBLIC
The Trend: Sizes of Companies Offering LTCI
8 %4 %
9 %
1 2 %1 2 %
5 3 %
1 - 1 0 0 e m p lo y e e s
1 0 1 - 5 0 0 e m p lo y e e s
5 0 1 - 1 ,0 0 0 e m p lo y e e s
1 ,0 0 0 - 5 ,0 0 0 e m p lo y e e s
5 ,0 0 1 - 1 0 ,0 0 0 e m p lo y e e s
1 0 ,0 0 0 + e m p lo y e e s
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.
26PRODUCER OR BROKER/DEALER TRAINING USE ONLY — NOT TO BE USED WITH GENERAL PUBLIC
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 >40 yrs
• Employee income >$50,000
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
27PRODUCER OR BROKER/DEALER TRAINING USE ONLY — NOT TO BE USED WITH GENERAL PUBLIC
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
28PRODUCER OR BROKER/DEALER TRAINING USE ONLY — NOT TO BE USED WITH GENERAL PUBLIC
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
29PRODUCER OR BROKER/DEALER TRAINING USE ONLY — NOT TO BE USED WITH GENERAL PUBLIC
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
30PRODUCER OR BROKER/DEALER TRAINING USE ONLY — NOT TO BE USED WITH GENERAL PUBLIC
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
31PRODUCER OR BROKER/DEALER TRAINING USE ONLY — NOT TO BE USED WITH GENERAL PUBLIC
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
32PRODUCER OR BROKER/DEALER TRAINING USE ONLY — NOT TO BE USED WITH GENERAL PUBLIC
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
33PRODUCER OR BROKER/DEALER TRAINING USE ONLY — NOT TO BE USED WITH GENERAL PUBLIC
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
34PRODUCER OR BROKER/DEALER TRAINING USE ONLY — NOT TO BE USED WITH GENERAL PUBLIC
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
35PRODUCER OR BROKER/DEALER TRAINING USE ONLY — NOT TO BE USED WITH GENERAL PUBLIC
Additional Information Sheets
• Handout Material
– Multi-Life Underwriting Program Overview
– ERISA Monograph
– Identifying Prospective Companies Sheet
QUESTIONS?