Presentation Transcript

1. ForeCare: A Fixed Annuity for the 21st Century FOR TRAINING PURPOSES ONLY. NOT FOR USE WITH THE PUBLIC. 1
2. Training Objectives The Likelihood of Long-Term Care The Need for a Long-Term Care Plan The Benefits of ForeCare FOR TRAINING PURPOSES ONLY. NOT FOR USE WITH THE PUBLIC.
3. The Likelihood of Long-Term Care Statistics have shown that our clients will be living longer in retirement.1 30% 50% 70% 90% As our clients live longer, there is a greater probability that they will need some form of Long-Term Care. Over the age of 65, what percentage of people will need some form of Long-Term Care? 1 Society of Actuaries, Risks and Process of Retirement Survey Report, July 2006 FOR TRAINING PURPOSES ONLY. NOT FOR USE WITH THE PUBLIC.
4. The sobering reality FACT: 70% of people over age 65 will need long-term care1 70% You just witnessed an exercise that, according to the statistics, each one of us could experience over the course of our lives. The question is, “Will your clients be part of the 30% of people over age 65 who may not need Long-Term Care or will your clients be one of the 70% of people over age 65 who will have to face the sobering reality that you will need Long-Term Care?” We all would like to think that we can be part of the 30% but more and more people are being afflicted with conditions requiring Long-Term Care. 1. U.S. Department of Health and Human Services, September 2008 FOR TRAINING PURPOSES ONLY. NOT FOR USE WITH THE PUBLIC.
5. Are your clients prepared to fund it? Do your clients know someone who is afflicted with a condition requiring long-term care? How are they funding it? How would YOUR CLIENTS fund it? FOR TRAINING PURPOSES ONLY. NOT FOR USE WITH THE PUBLIC.
6. Hypothetical costs associated with LTC Costs as of 2010, www.longtermcare.gov FOR TRAINING PURPOSES ONLY. NOT FOR USE WITH THE PUBLIC.
7. Hypothetical costs associated with LTC At this rate, 5 years at an assisted living facility will cost $190,800. Costs as of 2010, www.longtermcare.gov FOR TRAINING PURPOSES ONLY. NOT FOR USE WITH THE PUBLIC.
8. Where is the money your clients plan to use? Most people: Have set aside emergency funds Commonly for health-related incidents Are not willing to take a risk with these funds Does this sound like the plan your clients have created for their health emergency funds? Certificate of Deposits (CDs), Money Market Accounts, Savings Account and Fixed Annuities are all different product types and as such have different risk and suitability profiles. CDs and Saving Accounts are typically bank products and are FDIC insured up to certain dollar values. Money Market Accounts are securities and are not FDIC insured and although these funds seek to preserve the value of an investment at $1.00 per share, there is no guarantee they will maintain this value. Fixed Annuities are insurance products intended for retirement or other long-term needs. 1Returns are hypothetical and for illustrative purposes only and are not intended to be representative of the performance of any specific product type. FOR TRAINING PURPOSES ONLY. NOT FOR USE WITH THE PUBLIC.
9. Where is the money your clients plan to use? These assets usually end up being invested in CDs, savings and money market accounts or fixed annuities. However, in a low interest rate environment, returns on these types of products can be lower than expected. Other options such as stocks, bonds, mutual funds, variable annuities, or real estate could potentially provide greater returns but typically require exposure to greater market risk which your clients may not be willing to take. 3 73% of Fixed Annuity owners plan to use their annuity savings for health care emergencies2 Certificate of Deposits (CDs), Money Market Accounts, Savings Account and Fixed Annuities are all different product types and as such have different risk and suitability profiles. CDs and Saving Accounts are typically bank products and are FDIC insured up to certain dollar values. Money Market Accounts are securities and are not FDIC insured and although these funds seek to preserve the value of an investment at $1.00 per share, there is no guarantee they will maintain this value. Fixed Annuities are insurance products intended for retirement or other long-term needs. 1Returns are hypothetical and for illustrative purposes only and are not intended to be representative of the performance of any specific product type. 2Survey of Owners of Non-Qualified Annuity Contracts, The Committee of Annuity Insurers, 2009 3Stocks, bonds, mutual funds and variable annuities are securities and have different risk/reward characteristics, liquidity properties and tax consequences, particularly when compared to products such as CDs, savings accounts, money market  accounts and fixed annuities.  FOR TRAINING PURPOSES ONLY. NOT FOR USE WITH THE PUBLIC.
10. Is there another way? Fixed annuities have been an attractive option for many investors looking for a guaranteed interest rate, a choice of payment options, tax-deferral, and the opportunity to pass any remaining contract value to their beneficiaries through a death benefit without the complications of probate. Fixed Annuity Benefits Interest crediting Income options Tax-deferral Remaining contract value passes as death benefit proceeds Guarantees are based on the claims-paying ability of Forethought Life Insurance Company and subject to compliance with benefit rules. FOR TRAINING PURPOSES ONLY. NOT FOR USE WITH THE PUBLIC.
11. Is there another way? But as we saw, rates are low so you may need a hybrid solution. Even if rates rebound, how long would it take you to build the value of your annuity two or three times? Long-Term Care Benefits Fixed Annuity Benefits Interest crediting Income options Tax-deferral Remaining contract value passes as death benefit proceeds Potential to multiply the contract value FOR TRAINING PURPOSES ONLY. NOT FOR USE WITH THE PUBLIC.
12. Is there another way? ForeCareSM Fixed Annuity :A fixed annuity for the 21stcentury Simple Process ½ hour screen Long-Term Care Benefits Fixed Annuity Benefits F O R E C A R E Interest crediting Income options Tax-deferral Remaining contract value passes as death benefit proceeds Double or triple contract value* Guarantees are based on the claims-paying ability of Forethought Life Insurance Company and subject to compliance with benefit rules. *Expenses are first reimbursed from the contract value, without withdrawal charges. Once the contract value is exhausted, the Multiplier kicks in, providing additional resources for expenses, all tax-free FOR TRAINING PURPOSES ONLY. NOT FOR USE WITH THE PUBLIC.
13. Is there another way? ForeCareSM Fixed Annuity :A fixed annuity for the 21stcentury We are pleased to introduce you to our ForeCare Fixed Annuity. We call ForeCare a Fixed Annuity for the 21st century because we have added an enhancement option specifically designed to help your clients pay for Long-Term Care Expenses which could potentially have a catastrophic impact on their retirement funds. As people are living longer in the 21st Century and the probability for Long-Term Care increases, our ForeCare Fixed Annuity provides Long-Term Care coverage equal to 2 or 3 times the contract value. We have created a simple process to help you determine if ForeCare could be a key component of your clients’ retirement protection programs. If ForeCare is right for them, they can find out if they are approved quicklythrough a simple ½ hour process. *Expenses are first reimbursed from the contract value, without withdrawal charges. Once the contract value is exhausted, the Multiplier kicks in, providing additional resources for expenses, all tax-free FOR TRAINING PURPOSES ONLY. NOT FOR USE WITH THE PUBLIC.
14. ForeCare Facts: Up to 3x for LTC expenses ForeCare will provide coverage of 2x or 3x the Contract Value for long term care expenses. The multiple, known as the ForeCare Multiplier, is determined through simple underwriting. Expenses are first reimbursed from the contract value, without withdrawal charges. Once the contract value is exhausted, the Multiplier kicks in, providing additional resources for expenses, all tax-free. Up to 3x the contract value for qualified long-term care expenses1 More value accessible to help defray the effect of long-term care costs on family and finances Uses tax-deferred dollars to provide tax-free benefits 3x 2x Enhancing the Value for Qualified Expenses $350,000 $300,000 $250,000 Contract Value ForeCare @ 2X ForeCare @ 3X $200,000 $150,000 $100,000 $50,000 $0 1 Expenses are first reimbursed from the contract value, without withdrawal charges. The ForeCare Multiplier provides two or three times (depending on underwriting eligibility) the amount of contract value in long-term care coverage to spend on qualified long-term care expenses up to the maximum monthly benefit. These benefits are only available to use for a qualified long-term care benefit and will not become part of the contract value or the death benefit. Withdrawals, other than for qualified long-term care expenses, will adversely affect the amount of coverage in the future. Potential Value for LTC Expenses FOR TRAINING PURPOSES ONLY. NOT FOR USE WITH THE PUBLIC.
15. ForeCare Tax Benefits Tax-Deferred Growth Long-term care rider charges are not taxed as distributions Benefits received for qualified long-term care expenses are tax-free Existing non-qualified fixed annuities may be exchanged tax-free for a ForeCare Fixed Annuity by utilizing IRC section 1035* *Repositioning of assets from an existing fixed annuity contract into a ForeCare fixed annuity contract may not be suitable for all clients. Clients should carefully consider factors such as remaining surrender charge schedule, possible market value adjustments and any other charges before determining if repositioning and/or exchanging of an existing annuity contract is right for their particular situation. State insurance replacement regulations may also apply. FOR TRAINING PURPOSES ONLY. NOT FOR USE WITH THE PUBLIC.
16. Amount available to pay for long-term care Let’s take a look at an example. Let’s say your clients have a total income tax rate of 28%. They have $100,000 to invest. Let’s take a look at how much two of the most common types of accounts would yield after 15 years. Fixed Annuity Rate: 3% CD Rate: 0.5% $100,000 $100,000 Today Today *15 year values are after-tax values. CDs are typically bank products and are FDIC insured up to certain dollar values. Fixed Annuities are insurance products intended for retirement or other long-term needs. Both have different risk/reward characteristics, liquidity properties and tax consequences. Returns are hypothetical and for illustrative purposes only and are not intended to be representative of the performance of any specific product type. FOR TRAINING PURPOSES ONLY. NOT FOR USE WITH THE PUBLIC.
17. Amount available to pay for long-term care Let’s take a look at an example. Let’s say your clients have a total income tax rate of 28%. They have $100,000 to invest. Let’s take a look at how much two of the most common types of accounts would yield after 15 years. With an initial $100,000 investment, a CD would grow to $105,538 in 15 years. What about a traditional fixed annuity? At a 3% rate, your clients’ annuity would grow to $140,174 in 15 years. How does ForeCare Fixed Annuity stack up? Fixed Annuity Rate: 3% CD Rate: 0.5% $140,174 $100,000 $105,538 $100,000 15 Years* 15 Years* Today Today *15 year values are after-tax values. CDs are typically bank products and are FDIC insured up to certain dollar values. Fixed Annuities are insurance products intended for retirement or other long-term needs. Both have different risk/reward characteristics, liquidity properties and tax consequences. Returns are hypothetical and for illustrative purposes only and are not intended to be representative of the performance of any specific product type. FOR TRAINING PURPOSES ONLY. NOT FOR USE WITH THE PUBLIC.
18. Amount available to pay for long-term care Let’s say your client’s rating comes back at standard, meaning he or she is approved for the 2x contract value. ForeCare Standard (2X) We can see how their coverage starting today compares to how long it would take them to make significantly smaller gains in a regular fixed annuity or CD. Fixed Annuity Rate: 3% $200,000 $200,000 CD Rate: 0.5% $140,174 ForeCare Multiplier $100,000 2X $100,000 $105,538 $100,000 15 Years* 15 Years* Today Today Today 15 Years *15 year values are after-tax values. CDs are typically bank products and are FDIC insured up to certain dollar values. Fixed Annuities are insurance products intended for retirement or other long-term needs. Both have different risk/reward characteristics, liquidity properties and tax consequences. Returns are hypothetical and for illustrative purposes only and are not intended to be representative of the performance of any specific product type. The ForeCare Multiplier provides two or three times (depending on underwriting eligibility) the amount of contract value in long-term care coverage to spend on qualified long-term care expenses up to the maximum monthly benefit. These benefits are only available to use for a qualified long-term care benefit and will not become part of the contract value or the death benefit. Withdrawals, other than for qualified long-term care expenses, will adversely affect the amount of coverage in the future. FOR TRAINING PURPOSES ONLY. NOT FOR USE WITH THE PUBLIC.
19. Amount available to pay for long-term care If approved at Premier, their coverage is worth 3X or $300,000. That coverage starts today; they don’t have to wait 15 years. Which one of these options would your clients choose? ForeCare Premier (3X) ForeCare Standard (2X) $300,000 $300,000 Fixed Annuity Rate: 3% ForeCare Multiplier $100,000 3X $200,000 $200,000 CD Rate: 0.5% $140,174 ForeCare Multiplier $100,000 2X $100,000 $105,538 $100,000 15 Years* 15 Years* Today Today Today 15 Years Today 15 Years *15 year values are after-tax values. CDs are typically bank products and are FDIC insured up to certain dollar values. Fixed Annuities are insurance products intended for retirement or other long-term needs. Both have different risk/reward characteristics, liquidity properties and tax consequences. Returns are hypothetical and for illustrative purposes only and are not intended to be representative of the performance of any specific product type. The ForeCare Multiplier provides two or three times (depending on underwriting eligibility) the amount of contract value in long-term care coverage to spend on qualified long-term care expenses up to the maximum monthly benefit. These benefits are only available to use for a qualified long-term care benefit and will not become part of the contract value or the death benefit. Withdrawals, other than for qualified long-term care expenses, will adversely affect the amount of coverage in the future. FOR TRAINING PURPOSES ONLY. NOT FOR USE WITH THE PUBLIC.
20. Long-Term Care Benefit Single Life Joint Life Standard36 month Accelerated Benefit36 month Extended Benefit Premier24 month Accelerated Benefit48 month Extended Benefit Standard42 month Accelerated Benefit42 month Extended Benefit Premier30 month Accelerated Benefit60 month Extended Benefit FOR TRAINING PURPOSES ONLY. NOT FOR USE WITH THE PUBLIC.
21. ForeCare Covered Care Home Health Care Homemaker Services Home Health Aide and Personal Care Chore Services Nurse and Therapist Adult Day Care Respite Care Assisted Living Facility Bed Reservation Nursing Home Facility Hospice Care To qualify for long-term care benefits, the insured must be diagnosed as chronically ill, which means he or she is unable to perform at least 2 of the 6 ADLs or requires substantial supervision due to severe cognitive impairment. FOR TRAINING PURPOSES ONLY. NOT FOR USE WITH THE PUBLIC.
22. ForeCare Fixed Annuity Facts Single Premium Issue Ages: 50-80 Years Old Guaranteed fixed interest rates declared annually on Contract Anniversary Minimum Annuity Deposit is $35,0001 Maximum Annuity Deposit is $400,000 Single or $600,0001 Joint No waiting period 90 day elimination period (within 270 consecutive days, waived for home health care with qualifying plan of care) Rider charge rate is guaranteed to remain unchanged through the life of the Contract The contract value at month end will not be less than the contract value at the prior month end, less any applicable withdrawals. Withdrawal Charges – 8%, 8%, 7%, 6%, 5%, 4%, 3%, 2%, 1%, 0% thereafter1 2 10% Free Withdrawal During Withdrawal Charge Period2 Withdrawals not related to LTC will reduce the LTC benefit on a proportionate benefit 1 May vary by state 2 Market Value Adjustment Applies During Withdrawal Charge Period FOR TRAINING PURPOSES ONLY. NOT FOR USE WITH THE PUBLIC.
23. Market Value Adjustment Market Value Adjustment (MVA) only applies to withdrawals that incur a withdrawal charge. The MVA may either increase or decrease a withdrawal charge depending on whether benchmark rates have fallen or risen since the Contract issue date. MVAs will not be applied to any free amounts or death benefit proceeds paid. MVAs may not be available in all states. FOR TRAINING PURPOSES ONLY. NOT FOR USE WITH THE PUBLIC.
24. ForeCare’s Easy Application Process Visual View - Check height and weight parameters Eleven Questions For Your Client 15 Minute “Re:Call” Interview Decision: Find out if your client is approved* ForeCare Multiplier: Approved at Standard (2x), or Premier (3x) Simplified underwriting (20-30 minutes) completed at point of sale * Medication Review will be conducted prior to approval decision FOR TRAINING PURPOSES ONLY. NOT FOR USE WITH THE PUBLIC.
25. Inflation Protection Rider Optional Benefit Single Rider Fee at issue deducted from Initial Deposit Only available at Issue Can not be terminated once elected The Maximum Monthly Benefit and remaining unused Extended Benefit Amount will increase at each anniversary by 5% Accelerated Benefit period will be shortened because the maximum monthly benefits will be increased. The length of the Extended Benefit period will be the same as without the rider
26. Non-Forfeiture Rider Optional Benefit Single Rider Fee at issue deducted from Initial Deposit Only available at Issue Can not be terminated once elected If, after the policy has been in-force for at least 3 years, the client surrenders the contract, Forethought will return all rider charges, without interest, via LTC benefit payments (subject to limits) Subject to the 90 day elimination period FOR TRAINING PURPOSES ONLY. NOT FOR USE WITH THE PUBLIC.
27. Training Review The Likelihood of Long-Term Care The Need for a Long-Term Care Plan The Benefits of ForeCare FACT: 70% of people over age 65 will need long-term care1 Long-Term Care Expenses can be expensive and quickly drain a client’s assets. Double or Triple the Contract Value for Qualified LTC Expenses No Income Tax on Withdrawals for Qualified LTC Expenses Remaining Contract Value at death passes to heirs Instant-Decision Simplified Underwriting 1. U.S. Department of Health and Human Services, September 2008 FOR TRAINING PURPOSES ONLY. NOT FOR USE WITH THE PUBLIC.
28. Thank you! Guarantees are backed by the financial strength and claims paying ability of Forethought Life Insurance Company. ForeCareSM fixed annuities are issued by Forethought Life Insurance Company and available in most states with Contract FA1101SPDA-01 (certificate GA1101SPDA-01, as applicable). ForeCare is issued with Rider for Long Term Care Benefits Form LTC2000-01, Optional Inflation Protection Rider Benefit Rider form LTC2001-01 and Optional Nonforfeiture Benefit Rider Form LTC2002-01 (certificate series LTCG2000-01, LTCG2001-01 and LTCG2002-01, as applicable).  This is a solicitation of LTC Insurance. Products and features are subject to state variations and availability. Read the Contract for complete details. HA5058 8-13 100765 FOR TRAINING PURPOSES ONLY. NOT FOR USE WITH THE PUBLIC.