product training for agent use only. not for the general public living care ® annuity afn41121

PRODUCT TRAINING

For agent use only. Not for the general publicFor agent use only. Not for the general public

Living Care® Annuity

AFN41121

For agent use only. 2

Introduction / Agenda

Background – A New Retirement Landscape

Living Care® Annuity Overview

Target Market and Marketing Materials

Living Care® Annuity Sales Ideas


Background

A New Retirement Landscape


Background

A Challenge to Quality of Life

Two Common Retirement Risks:

Longevity Risk

Long-Term Care Risk


Longevity Risk

Percentage of survivors at age 65 expected to live to ages 70+

Survivors to age: Men Women

70 88% 92%

75 74% 82%

80 56% 69%

85 36% 51%

90 17% 31%

95 6% 13%

100 1% 4%

Source: WISER and the Actuarial Foundation, 2003


The Need for LTC

Reasonable people believe they are going to live a long life.

The reality of living a long life and getting old is that eventually most people will get sick and need care.

How are your clients going to fund their long-term care?


Innovation is needed

Innovation is needed to:

Protect retirement assets against stock market volatility;

Provide extra financial resources for potential long-term care expenses; or

Ensure retirement income that lasts many years in retirement.


Product Details



Issue Ages - 40-79

Contract Premiums - Non-qualified dollars only

Minimum - $50,000

Maximum - $300,000

Owner, annuitant and claimant must all be the same person (no joint owners)

Guaranteed Interest Rate - 3.00%



Withdrawal Charges –

Surrender Free Withdrawals - 10% after Year 1

Waiver of Withdrawal Charges - Death, Chronic, and/or Terminal Illness

Annuitization - After Year 2 – Full value for lifetime annuity options

30-day free-look



®



If they need long-term care, they can:

Receive up to three times the annuity value in long-term care benefits

Help preserve their overall retirement plan assets by using this portion of their money to pay for up to six years of long-term care

Help protect a spouse and/or family members from the emotional, physical, and financial toll of care-giving

Help ensure their choice of care options



Covered long-term care benefits include:

Nursing Home Care

Home Health Care

Assisted Living Facility Care

Alternative Care Services

Adult Day Care

Care Coordinator Service

Caregiver Training

Homemaker Services

Personal Care

Respite Care

Care Planning

Hospice Care



If they don’t need long-term care, they can:

Earn a guaranteed rate of interest on their savings

Take advantage of tax-deferred growth

Access their principal through partial withdrawals or lifetime income options

Provide a death benefit to their beneficiaries that are equal to the annuity value

Avoid probate of these funds


Eligibility for LTC Benefits:

Annuitant is chronically ill

Inability to perform 2 out 6 Activities of Daily Living (ADL) or Cognitive Impairment (Alzheimer’s)

A least two years from issue date following 90-day elimination period

Cost of rider is waived when the claim is approved


LTC Daily Benefit Example

Annuity Value: $100,000

Max. Daily Benefit: $100,000 / 730 days = $136.99 per day based on daily expenses incurred

Max. Lifetime Benefit: $100,000 x 3 = $300,000

The long-term care daily benefit is deducted from the annuity until $1.00 of annuity value is left

Then, the daily benefits are provided by United of Omaha until the client has exhausted the Maximum Lifetime Benefit.

This provides a minimum of 6 years of benefits assuming no excess withdrawals.


Cost of the LTC Rider

Long-term care charges are deducted from the account values on a monthly basis based on the age at issue. The Annuity and Surrender Values reflect these charges. The cost is waived when a claim for long-term care benefits is submitted and approved.

Example (69 year old):

$100,000 x .0103 =$85.83 monthly charge


Inflation Protection Endorsement

Increases the daily benefit amount to help keep pace with the rising cost of long-term care services.

It requires additional premiums to be added annually if the annuity value has not increased the Maximum Daily Benefit by 5%.

This endorsement may only be elected at issue.

There is an additional charge of .029% for this endorsement that is deducted monthly as a percentage of the annuity value.



Inflation Protection Endorsement

How it works

Hypothetical Initial Premium: $100,000

Hypothetical Net Interest: 3.25%



Non-forfeiture Benefit – Shortened Benefit Period Endorsement

Under the Shortened Benefit Period Allowance, United of Omaha will pay:

100% of the sum of all Monthly Deductions, excluding any waived Monthly Deductions, or;

30 times the Maximum Daily Benefit in effect at the time of termination.


Taxation

Interest income earned in the annuity accumulates on a tax-deferred basis.

A 10% federal tax penalty may apply for withdrawals taken prior to age 59 ½ unless an exception applies.

Distributions of income from the annuity, at death or otherwise, are taxable as ordinary income.

Withdrawals taken in tax years beginning prior to January 1, 2010 that pay qualified long-term care benefits and charges may be taxable as ordinary income, and if the contract owner is not at least 59 ½, may be subject to the 10% tax.

Due to the Pension Protection Act of 2006January 1, 2010 the Living Care® Long-Term Care Rider is intended to be tax-qualified long-term care insurance. At that time rider charges and benefits will no longer be taxed due to the provisions of The Pension Protection Act of 2006.


Living Care® Annuity – Henry’s Story

Henry – Age 65Wants to protect his wife and son from informal care-giving

Wants to protect his overall retirement plan assets

Wants to leave an inheritance for his son


If Henry needs long-term care…

Henry, Age 65, $100,000 Single Premium, Assumed Interest Rate of 3%


If Henry doesn’t need long-term care…


Underwriting and

New Business Processing


Application

Section A – General InformationSection B – Beneficiary InformationSection C – Contract Information Section D – Health Insurability Questions (Knock out type)Section E – Other Coverage / ReplacementSection F – LTC Rider BenefitsSection G – Signatures

General FormsAnnuity FormsLong-Term Care Forms


Items to be reviewed:

Assets above $300,000 total and under $2.5 MM total

Net worth

Amount of investment

Investment time frame

Goals of investment

Surrender charges/bonuses (replacing)

Suitability



12 Pre-qualifying Health Questions

Phone Interview – Health, memory and general questions

MIB and Pharmaceutical Review

Goal is to make underwriting decision based on this information

If any question is answered “yes”, the applicant will not be eligible for coverage through the Living Care Annuity.

If applicant has been previously declined for LTC coverage, they will be unable to purchase this annuity.

Underwriting and New Business Processing


Personal Health Interview

All clients are required to complete the Health Interview

Review the “Preparing your client for the Health Interview Guide”

At the Time of Application, complete the Interview with the “LifePlans” Interviewer (1-800-544-4326; 8 a.m. – 8 p.m. EST Monday – Friday)

If unable – schedule a time or leave a message for when LifePlans can contact the client



Agent provides the following to the Life Plans Interviewer…

Agent NameAgent TNClient NameClient TNClient Address (incl. City, State and Zip) Client Social Security NumberClient DOBClient Gender

***Make aware any need for re-schedule and/ or interpreter at this time ***



RULE #1 - You MUST call to schedule the interview before you leave the house

RULE #2 - You will be given a Reference # you MUST write this on page 1 of the App (Provide to client as well)

If After Hours :

1. Leave Voicemail at 1-800-544-4326 or

2. Send an E-mail to [email protected] with all info from previous slide listed. You will receive an E-mail confirmation back.



Reminder: LTC Underwriting DOES NOT see the case until ALL the Pharmaceutical checks, MIB and Interview are completed

(They won’t even know the case exists until those are completed)



Example - HT / WT Differences

LCA LTC I - II



Scrubbing the application:

Current forms required and completed correctly

Signatures where needed

Underwriting pre-qualifications

Agent appointment requirements met

Underwriting and New Business Processing


Sales and Marketing


Who to talk to?

• Children of retirees or aging parents• Empty nesters• Boomers preparing for retirement• Retirees• CD owners• Widows


Who can benefit from Living Care® Annuity?

Individuals ages 40-79 who have total assets above $300,000 and most likely under $2.5 million

Target buyers ages 55-79

Individuals who do not currently have existing long-term care coverage

Individuals seeking a “better economic value” than paying stand-alone long-term care premiums

Target Market


Target Market

Who can benefit from Living Care® Annuity? (cont.)

Individuals with retirement needs including asset maximization, longevity risk management and income management with guarantees

Individuals concerned about the risk of long-term care expenses and their impact on their overall retirement plans

Individuals concerned about burdening their family members with the emotional and financial effects of informal care-giving

Individuals wanting to set limits, or boundaries, on the impact long-term care risks can have on their overall retirement assets, family members, and long-term care choices


The Keys to Selling Annuities

Let them know what you do

Ask meaningful questions to:Find out what they want to do in retirement

Uncover the money

Determine their needs – income or growth?

Discuss the benefits in terms they understand


Let ‘em know what you do

“One of the areas we do a lot of work in is helping retirees protect their way of life.”


Ways to Open the Door

What does your retirement look like?

Is there anything special you want to do?

Do you know anyone who lived into their 90s?

Have you had a personal experience dealing with LTC?

How did that impact you or your family?

Are you interested in tax deferral?

Do you keep money in CDs?

Who do you have your LTC with?

How much money have you set aside for LTC expenses?

Are you worried about outliving your money?


Senior Age Fact Finder


Where’s the Money?

Bank accounts – savings, CD’s and money marketsOther deferred annuities (1035 exchange)Sale of an asset – residence, business, propertyInheritance, life insurance proceedsAssets that would better serve your client if they were “repositioned”


Repositioning Assets

Not creating a bill - we’re using readily available assets in annuities, CD’s and savings accounts to:

Protect wealth

Provide guaranteed income

Provide dollars for long-term care expenses

Secure a legacy

Achieve peace of mind


Repositioning Assets


Self Funding LTC

Long-Term Care RiskSelf-Funding of Long-Term Care


Self Funding

Alternative


Long-Term Care Risk

Self-Funding of Long-Term Care

Don’t Forget they will have ….

1. Taxation issues

2. Lost Opportunity Cost

On the Money they use to “Self Fund”

Make your Money work “Smarter” for you.


LTC Add-on

Added protection for non-partnership states, the Living Care Annuity is a great add-on product to an existing LTC strategy or LTC stand alone policy that has a short benefit period such as a 3-year or 5-year option.

If the base LTC policy benefits are depleted, the Living Care Annuity provides an extra pool of dollars to tap into if faced with an extended nursing home stay.


Retirement Planning Checklist

What’s your client’s vision of retirement? Budget – base income, lifestyle income Income sources Asset inventory Risk tolerance Health


Winflex


Marketing Materials


Living Care® Annuity Provides You:A more efficient approach to limiting, or setting boundaries on, longevity and long-term care risks

The ability to better position a portion of your clients’ retirement assets

Simple hybrid annuity concept that uses a 3x factor

Quick and easy underwriting process

Innovation from an A+ carrier

The foundation of a strong Mutual of Omaha brand

Excellent Compensation

Superior Sales Support from an Industry Leader

Begin Today


Compensation

Ages 40 – 75: 6%

Ages 76 – 79: 4½%

For agent use only. Not for the general public.For agent use only. Not for the general public.

Thank You for ALL You Do !!!


Disclaimer

Annuities are underwritten by United of Omaha Life Insurance Company, Mutual of Omaha Plaza, Omaha, NE 68175. Not available in all states. Coverage may vary by state. Exclusions, limitations and reductions may apply.

For agent use only. Not for use with the general public.


Disclaimer

Thanks

Craig Taylor

Regional Sales Manager

402.351.3708 (phone)

402.321.4691(Mobile)

product training for agent use only. not for the general public living care ® annuity afn41121

Documents

longterm care

living care annuity

care benefits

care help

care risk slide

care expenses

choice of care options

living care annuity