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Profit Plans Pearls: Long Term Care Partnership Edition |
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Written by Kathy Bishop
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Wednesday, 15 October 2008 18:28 |
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> The Long Term Care Insurance Partnership Plan is designed to encourage and reward Tennesseans and Georgians who take an active role in planning ahead for future long-term care needs.
| | WHAT DOES IT MEAN TO YOUR CLIENTS?
ASSET PROTECTION FROM MEDICAID SPEND-DOWN REQUIREMENTS:
| | For every dollar that a Partnership-qualified policy pays out in benefits, a dollar of personal assets can be potentially protected when applying for long-term care coverage under TennCare or Medicaid.
So, if you have a policy with a $500,000 total pool of benefit, you can potentially shelter $500,000 in assets.
Partnership qualified policies have to meet three basic requirements in Tennessee:
- Must comply with the NAIC model law having all the same provisions and approved by the TN Department of Commerce & Insurance
- Must be Tax Qualified - means the IRS does not tax the policy's benefits
- Has to have specific inflation protection provisions at the time it is sold:
- Less than age 61 - must have compound annual inflation protection at some level
- Age 61-75 - some level of inflation protection must apply - no minimum level is established
- Over age 75 - policy may provide inflation protection but none is required.
| HOW ARE THESE PRODUCTS DIFFERENT FROM WHAT I AM ALREADY SELLING?
| | The products we offer through our LTC carriers are ALL Tax Qualified Plans which meet the NAIC model regs. The plans we recommend generally will follow the inflation protection guidelines outlined above according to your client's age at issue. So, really, NO difference - except the product has to have the "Partnership " tag on it, and YOU , the agent, must complete the training before you take an application in your state.
There are only two requirements for you to be able to sell them -
- The product has to be approved in your state as a Partnership product (DUH!)
- You must successfully complete the 8 hour training class prior to selling Partnership LTC products in your state.
| WHEN WILL PARTNERSHIP PRODUCTS BE AVAILABLE?
| | Currently, all of our carriers are in the process of getting a Partnership-approved product on the market in both states. None of our five carriers - John Hancock, Genworth, Prudential, Metlife and Mutual of Omaha - have gotten that final approval as of this date, but we expect them by the end of 2008 or early 2009.
You can continue to sell the current portfolio of long term care insurance products even though the Partnership initiative has been approved in Tennessee and Georgia. Alabama is not currently a Partnership state, and it is not pending to our knowledge with the Alabama Dept of Insurance.
| WHAT DOES THIS MEAN FOR YOU?
| | - Great opportunity for LTC Sales
- Requirement for training and education:
- If you were licensed to sell LTC in Tennessee as of 7-1-2008, you must complete an 8 hour Department-approved LTC course by July 1, 2009
- It counts toward any CE requirement you have to meet for that renewal period
- AND you must take a 4 hour CE class every 24 months after that, every renewal period.
- EVEN if you are exempt from other State CE classes, you must take the initial 8 hour training session by July 1, 2009.
- Georgia agents must meet similar requirements, but their deadline for compliance is January 1, 2009 (was October 1, 2008 - but the Dept. extended the deadline).
| CAN I SELL PARTNERSHIP LTC PLANS NOW?
| | No, for two reasons -
1) Gotta have the training first, then
2) Gotta have an approved product to sell
We'll be helping you to meet the LTC training requirements - stay tuned to this channel for more details!
If you need to get the class under your belt sooner than that - Genworth has vouchers available for it's appointed agents for a WebCE class that meets the requirements. They will also provide classroom training which meets the state requirements as soon as their product gets the Partnership approved tag, and we will help to provide those for you.
John Hancock has a reduced price for on-line training ($65) which will be reimbursed to you after you place two John Hancock Partnership LTCD policies.
One last note: Even though our carriers do not yet have Partnership products in Tennessee and Georgia, don't stop selling LTCI! There will be a transition period during which products that otherwise would meet the appropriate guidelines may get an amendment to their contract making them partnership policies.
| | | | We appreciate your business!
Kathy Bishop
Profit Plans LLC
Insurance Designers of TN
www.profitplansllc.com
423.267.9729
Member of NAIFA; NAILBA; RAF | |
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Last Updated ( Wednesday, 15 October 2008 18:32 )
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