How to Increase Your Average
Case and Separate Yourself From
The Competition
Using Limited Pay and Return of Premium Policies.
Resource Brokerage LTC, LLC
The greater value you bring to the
market place:
• The larger your income will be.
• The more referable you will become.
• The more referable you become the more
successful you will be.
Limited Pay and Return of Premium
• Offer your customers unique value to help
you stand out in the marketplace.
• Leads to greater refer ability and more
money in your pocket.
Limited Pay and Return of Premium
… are methods of purchasing coverage not
reasons for buying coverage.
Limited Pay and Return of Premium
• If you and your customer have not already
come to a fundamental agreement as to
the reasons to buy coverage the following
material is not relevant.
These concepts are most explicable
when:
A high level of discretionary income exists
from:
1. Personal Cash flow
2. Business Cash flow
3. Cash flow from Asset Base
These concepts are most explicable
when:
 C-Corp or self-employed due to tax
deducibility.
 The greater the net worth the better. “Mr.
and Mrs. $25 million couple, I have a
unique LTC program created specifically for
the very wealthy the higher your net worth
the more you will want to embrace this
program.
These concepts are most explicable
when:
 The income is significantly higher now than
in the future, i.e.: high paid executives and
professionals.
 Due to high income taxes (because of high
income and net worth) additional income is
of less value than tax deductible and tax
free benefits.
 (For Return of Premium) a strong desire
exists to pass wealth on.
The Client Conversation
• “Mr. and Mrs. Client, I want to take a
moment to put things in the proper
prospective.”
The Client Conversation
“There are only 2 types of people in the
world when it come to understanding
money.”
The Client Conversation
“Those who understand it and those who
don’t.”
The Client Conversation
“There are 2 facts about these groups.
1. The group that does not understand
money and never gets financially ahead.”
The Client Conversation
2. “The group that understands money and
has money gets to take advantage of
opportunities that the first group does not.”
The Client Conversation
“The second group is often self employed
and realizing that ownership in a business
is the ticket to certain benefits provided on
a tax deductible and tax free basis.”
Characteristics of Owning vs.
Leasing
• Historically people who consider
themselves financially astute have
believed it is better to own something than
to lease it.
Characteristics of Owning vs.
Leasing
1. Higher net cost for the short term but
lower net cost for the long term.
Characteristics of Owning vs.
Leasing
2. At a predetermined point and time in the
future owning no longer consumes current
cash flow leasing almost always requires
current cash flow.
Characteristics of Owning vs.
Leasing
3. Owning insulates you from future
volatility in the marketplace. Leasing does
not.
Characteristics of Owning vs.
Leasing
4. At a given point of time in the future
owning often means a return on your
money. Leasing does not.
Case Study
Resource Brokerage LTC, LLC
• C-Corp
• Married
• Aged 50
• Preferred (obviously)
Resource Brokerage LTC, LLC
•
•
•
•
90-day elimination period
$150 per day
5% compound inflation rider
Lifetime benefits
Resource Brokerage LTC, LLC
Lifetime pay
Annual
Premiums
(Difference)
10-Pay
$2126
($3997)
$6123
$21,260
($39,970)
$61,230
Net after tax cost $12, 756
($23,982)
$36,738
10 yr
Total
Resource Brokerage LTC, LLC
Would it be worth $200/month for the next 10 years to be done
paying for your coverage at 60 years of age?
Lifetime pay
Annual Premiums
(Difference)
10-Pay
$2126
($3997)
$6123
10 yr
Total
$21,260
($39,970)
$61,230
Net after tax cost
$12, 756
($23,982)
$36,738
Why paid up coverage is the better
idea.
• Policy is paid up in your working years
when your income is greater.
• Because the C-Corp paid the premiums
100% of the cost was tax-deductible.
• Once we reach the tenth year we are
insulated from future rate increases.
NO CASH FLOW= NO SALE
Let’s get analytical
• What if we invest $3673 per year (net after
tax premium) for 10 years-assuming 6%
net earnings?
Value of
investment
Annual LTC
benefit @ 5%
compound
Approximate
length of claim to
recapture value
of investment
10 years
$53, 737
$89,182
8 months
20 years
$94,438
$148,636
8 months
30 years
$169,124
$243,764
8 months
More Analytics
• 10 year cost assuming 6% net after tax
earnings = $53,737.
• At year 10, one claim of approximately 8
months returns all your premium plus 6% net
earnings.
• At year 20, one claim of approximately 8
months returns all your premium plus 6% net
earnings.
• At year 30, claim of approximately 8 months
returns all your premium plus 6% net earnings.
Resource Brokerage LTC, LLC
• Do you realize at age 80 if you each
require 4 months of assistance not only
have I paid for your care but above and
beyond that you have earned 6% on the
premiums you gave me. Do you think it is
possible by the time you are 80 you might
need 4 months of assistance?
That’s not good enough let me
improve my offer.
Instead of just paying your claim I would like
to return all of the premiums you paid to
your heirs at your death.
Return of Premium
10-Pay
Before tax
(Difference)
10-Pay with
refund
$6123
($3767)
$9890
10 year total
$61,230
($37,670)
$98,900
After tax cost
$36,738
($22,602)
$59,340
10-Pay
Before tax
(Difference)
10-Pay with
refund
$6123
($3767)
$9890
10 year total
$61,230
($37,670)
$98,900
After tax cost
$36,738
($22,602)
$59,340
•Net cost of $36,738 at death no refund
•Net cost of $59,340 at death refund of $98,900
regardless of claims
•Is it worth $22,602 to pass on $98,900?
Let’s find out.
Future Value of $22,602 (@6%net)
Year 10
*$40,476
**$98,900
Year 20
*$72,487
**$98,900
Year 30
*$137,603
**$98,900
*projected
** Guaranteed
You are going to save and invest regardless
of a refund on Long-Term Care coverage
however, this is an additional financial tool
that will guarantee the passing of wealth
regardless of market volatility, personal
money mismanagement, or other
conditions beyond our control.
Approximately $6000 per year for 10 years
will guarantee this couple’s Long-Term
Care coverage for the rest of their life and
return almost $100,000.00 at their death to
their loved ones or some other cause they
believe in such as a charity, alumni
organization, or other worthy cause.