THE TRUTHS

1
THE TRUTHS MYTHS OF CORPORATE LTCI IN AMERICA

• Session 11 February 27, 2006
• Session Producer
• Roch Rodrigue, President CEO
• The Todd Benefits Group, Inc.

2
The Myths Outlined Roch Rodrigue President and
CEO The Todd Benefits Group, Inc. The
Consultants View Steven Farish Vice
President Wachovia Work Site The MGAs View Carol
Gardner President and CEO Lifestyle Insurance
Services The Brokers View Kim Natovitz President
and CEO The Natovitz Group
3
The Myths

• Must Have GI (Guaranteed Issue)
• Reserve Transfers are Important
• Group LTCi is A Better Value (Cost)
• Large Employers Must Use Group Simplicity
• Group Plans Easier to Administer Employer
• Must Have Payroll Deduction
• Group Plans Are Portablebut
• Producer Can Only Leverage Large Case w/Group
  Carrier
• Technology Not Effective with LTCi

4
Guaranteed Issue

• Wrong Call To Action
• Going after the wrong risk
• Presents compromised/adverse risk on reserves
  long-term
• Reduced Underwriting
• There is a cost to participants
• Its the wrong mindset for insured
• Higher Group Lapse Rates Add To the Problem
• If Voluntary EE Pay All Should have the best
  value and plan design to meet needs.

5
Reserve Transfers

• Now found in most RFPs
• Carriers may or may not agree to transfers
• Adverse affect on Employees
• There is a cost
• Compromises reserves over the long haul

6
Group LTCi is a Better Value

• Group rates should be higher than individual
• Adverse selection (Guarantee Issue)
• Spouses and family members pay higher rates even
  though fully underwritten
• Preferred rates are not available
• Often Spousal/Partner discounts not available
• Group Sponsored multi-life discounts not available

7
The Need For Simplicity

• Trying to fit a square peg in a round hole
• Customized plan design to meet needs
• ABC choices dont often meet the need
• Riders and APOs not available
• Should have plan design counselors available
• Should be a once in a lifetime buying decision if
  done properly

8
Group PlansEasier to Administer and Communicate

• Communication Plan Should Include Multi-media and
  Personalization
• Need for Payroll Deduction
• Checking deduction is better
• Direct billing is also effective
• Must have employer support for plan in writing

9
Group Plans are Portablebut

• How easy is it to port coverage by participant?
• Does the carrier actively seek/assist the
  participant?
• What are chances a participant will lapse when
  they terminate employment?
• Handling acquisitions back to simplicity myth

10
Managing Large Case Relationships

• Find a partner with
• Infrastructure to support Multi-Life approach
• Effective communication and technology
• Licensed staff to support
• Producers Role
• Manage relationship with client
• Assist strategic partner with implementation
  dont take over or get involved unless asked
• Understand the process in its entirety you can
  use it on future sales opportunities

11
Technology Not Effective with LTCi

• Technology (web sites) should be used as a tool
  to educate and motivate employees
• Used to simplify the communications process
• In combination with a live human being that can
  assist the policyholder with plan design and
  budget issues