Solving CLIENT NEEDS for Chronic Illness Care

For Agent/Broker-Dealer Use Only. Not For Use With Consumers. For Agent/Broker-Dealer Use Only. Not For Use With Consumers.

Solving CLIENT NEEDS for Chronic Illness Care

WCLAG.1772 (03.11)

For Agent/Broker-Dealer Use Only. Not For Use With Consumers.

Important Information

• LifeTime Platinum III UL, policy form WC-U15 and state variations thereof, is a flexible premium universal life insurance policy issued by West Coast Life Insurance Company which is located at 2801 Highway 280 South, Birmingham, AL 35223. Product features and availability may vary by state. Subject to underwriting. Subject to up to a 2-year contestable and suicide period. Benefits adjusted for misstatements of age or sex. Consult policy for benefits, riders, limitations and exclusions. In Montana, unisex rates apply. West Coast Life does not render legal or tax advice. Information in this summary is based on current tax laws that are subject to change. Not available in all states. All payments and all guarantees are subject to the claims paying ability of West Coast Life.

• ExtendCare rider (Form WC627 8-10 or Form ICC10-W-R2) is issued by West Coast Life Insurance Company. Actual terms and conditions contained in the rider govern all benefits provided. Please see the rider for more detailed information. Available only at issue and at an additional cost. Assumes medical and financial underwriting qualifications at time of initial application. Not available in all states. State variations may apply.

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The Facts

• According to the Centers for Disease Control (CDC) chronic diseases are non-communicable illnesses that are prolonged in duration, do not resolve spontaneously, and are rarely cured completely. Examples include heart disease, cancer, stroke, diabetes, and arthritis.

• Approximately one fourth of persons living with chronic diseases may need help performing two or more of the following Activities of Daily Living (ADL’s)– Bathing– Dressing– Using the toilet– Transferring (to or from bed or chair)– Caring for incontinence– Eating

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Source: http://www.cdc.gov


The Facts

• 75% of people 65 and older will eventually need Long Term Care.

• By 2020, approximately one in three workers will be providing some form of Long Term Care for their boomer parents.

• National average cost of care in a nursing home is $80,850 per year

• 92% of all Long Term Care Insurance claims are for about three years

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http://www.longtermcareinsurancetree.com/ltc-basics/long-term-care-stats.html


The Facts

• Custodial care, which makes up 90% of all home health care, is not covered by Medicare

• About 75% of all single people and 50% of all couples spend their entire savings within one year of entering a nursing home.

• For every one person receiving care in a nursing home, there are four people receiving home health care.

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http://www.longtermcareinsurancetree.com/ltc-basics/long-term-care-stats.html


Overview

• Recent Popularity of “Living Benefits”

• Several Product Designs in the Market

• Linked Products vs. Rider Approach

• Our Approach = Optional Accelerated Death Benefit Rider

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How Does ExtendCare Stack Up?

Simple Question: • How does our ExtendCare Rider compare to other

companies in this market?

Answer: • It depends on what product design you are comparing!

Reality: • You may have 2 Different Answers

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Competitive Landscape The Two Approaches

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Linked Benefit Product Optional Rider

Lincoln MoneyGuard Hartford

Genworth TLC John Hancock

John Hancock SPWL Nationwide

Nationwide YourLife SPUL AXA

Other Industry Competitors:

- OneAmerica (AssetCare-I)- Aviva- Prudential - New York Life- NACOLAH- Allstate / Lincoln Benefit- State Farm

Data in the comparisons made in this presentation is based on information available from the companies and is believed to be current as of 1/11/11, but is subject to change.

The contents of this presentation are for illustration purposes only. Individual situations will be different based on age, sex, and health status of your clients. For current information, please use our Winflex software.


Linked Benefit vs. Optional Rider

What is Similar?• Both Provide Accelerated “Living Benefit” to Cover

Cost Associated with LTC / Chronic Illness Care

• Designed to offer benefit payments that qualify for “Favorable” tax treatment *

• Initial Benefit Eligibility

Physician Certification:

1. Client cannot perform 2 of 6 ADLs

or

2. Severe Cognitive Impairment

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*It is important for your client to understand that the ExtendCare rider is part of a life insurance policy. It is not a health based product and does not qualify for certain tax deductions.

Comparisons are based on information available from the companies and is believed to be current as of 1/11/11, but is subject to change.


Linked Benefitvs. Optional Rider

What is Different?

1. Primary purpose of Linked Products is to Leverage the premium to Increase the LTC benefit

2. Primary purpose of “Rider” is to add Flexibility to Life Insurance by allowing access to DB if Chronically Ill

3. How the Benefit Amount is Determined at Issue

(Duration vs. Specified Amount)

Lincoln MoneyGuard: (Benefit Duration Ranges from 2-7 years)

- Base Acceleration Duration 2 or 3 yrs (LTC Pool = DB)

- Extension of Benefits Duration 4-7 yrs (LTC Pool > DB)

West Coast Life’s ExtendCare (Client Specifics Benefit Amount $1,000 - $8,500)

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“Linked” Benefit Products How are they Illustrated?

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Typical Case Example: F60, Std NT, $100k Single Premium

Lincoln MoneyGuard Benefit Duration

2 years 4 years 6 years

Base Benefit Duration (CCBR*)

2 years 2 years 2 years

Extension of Benefits(EOBR**)

None 2 years 4 years

Total LTC/Chronic Illness Benefit Available

$224,365 $401,576 $579,888

Lifetime Guaranteed Death Benefit

$224,365 $200,788 $193,296

Maximum Monthly Benefit Available

$9,349 $8,366 $8,054

Residual Death Benefit $22,436 $20,078 $19,329

*Convalescent Care Benefits Rider = Accelerates the CCBR Benefit Limit for covered long-term care expenses for 2 years or 3 years. The CCBR Benefit Limit is equal to the Specified Amount of coverage. **Extension of Benefits Rider = Extends long-term care benefits for 2 years or 4 years.

Example used is Lincoln Money Guard Reserve



Linked Benefit vs. Optional RiderTypical Case Scenario

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“Instant Leverage” Sale

Leverage the Power of Underwriting - “The Green Zone”



Optional Ridervs. Linked Benefit

What is Different? – A Closer Look• 101(g) vs. 7702B

• Application Process (Traditional vs. Transactional)

• How The Benefit Amount is Determined

• Benefit Payment Method (Indemnity vs. Reimbursement)

• Premium Payment Options

• Health Licensing Requirements

• Return of Premium & Residual Death Benefit

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ExtendCare RiderDifferences

West Coast Life’sLTP III with optional

ExtendCare Rider

Lincoln MoneyGuard Reserve UL

Genworth Total Living Coverage

(TLC)

John Hancock LifeCare SPWL

Issue Ages 20-80 30-80 18-79 30-75

How Benefit is Calculated

Option to Choose Benefit Amount ($1,000-

$8,500)

Duration is ElectedRanges from 2-7 years

Duration is ElectedRanges from 2-7 years

Duration is ElectedRanges from 2-8 years Lifetime also available

Benefit Payment Method

Indemnity Reimbursement Reimbursement Reimbursement

Elimination Period 90 or 365 Days 90 days 90 days 90 days

Proof of Care Not Required Proof of care is required to Reimburse expenses

Proof of care is required to Reimburse expenses


Use of Benefit Payments

Benefit payments can be used For Any

Purpose

Benefit Payments are only Reimbursed for

Qualified LTC services




Qualified LTC servicesImpact of Claim on

DB and Cash ValuesDollar for Dollar

ProportionalDollar for Dollar



Proportional

Premium Payment Flexibility

Single pay up to Lifetime

Limited to 1,3,5,7 And 10-pay

Single-Premium Only Single-Premium Only

Risk Class Availability

Same as Base Policy Non-SmokerSmoker

Preferred No-NicotineStandard No-Nicotine

Standard Nicotine

Non-SmokerSmoker

Substandard Ratings Up to Table 4 Not Available Substandard Ratings may be available

Not Available

Maximum Face Amounts Offered

Up to $5M Up to $750,000 Up to $1.2M Up to $540,000

Health License or additional CE Requirement

Not Required Health License and state specific CE Training is

Required

Health License and state specific CE Training is

Required

Health License and state specific CE Training is

Required

West Coast Life’s ExtendCare

vs. “Linked” Life/LTC



West Coast Life’s ExtendCare vs. “Rider” Competitors

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ExtendCare RiderDifferences

West Coast Life’sLTP III with optional

ExtendCare Rider

Hartford Freedom UL

LifeAccess Rider

John HancockUL-G 11

LTC Rider

NationwideYourLife NLG UL

LTC Rider

Issue Ages 20-80 20-80 20-80 21-80

How Benefit is Calculated

Option to Choose Benefit Amount ($1,000-$8,500)

Lesser of 2% of DB or IRS per diem limit

Benefit % is Elected1%,2% or 4% of DB

Lesser of 2% of DB or IRS per diem limit

Benefit Payment Method

Indemnity Indemnity Reimbursement Indemnity

Elimination Period 90 / 365 Days 90 days 100 days 90 days

Proof of Care Pays a monthly benefit without having to provide

proof of care, bills or receipts

Pays a monthly benefit without having to provide

proof of care, bills or receipts


Pays a monthly benefit without having to

provide proof of care, bills or receipts

Use of Benefit Payments

Benefit payments can be used for any purpose

Benefit payments can be used for any purpose



Benefit payments can be used for any

purpose

Impact of Claim on DB and Cash Values

Dollar for DollarProportional



Dollar for DollarDollar for Dollar

Premium Payment Options





Risk Class Availability

Same as Base Policy Same as Base Policy Same as Base Policy Standard up to Table E

Substandard Ratings Up to Table 4 Up to table 6 Up to table 3 Up to table E

Maximum Face Amounts Offered

Up to $5M Up to $5M Up to $5M Up to $1M

Health License or additional CE Requirement

Not Required Not Required Health License and state specific CE

Training is Required

Health License and state specific CE

Training is Required



How is ExtendCare Different vs. our CIADB Rider?

• New Rider Name = “ExtendCare”

• Added Rider to our NLG Product

• Can Now Accelerate Up to 100% of DB

• Increased Maximum Monthly Benefit Amount

• Client Can Now Specify Benefit Amount (Up to Maximum Allowed $1,000 - $8,500)

• Increased Maximum Face up to $5M

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Case Study #1

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Jack is 57M Preferred Non-Tobacco,

Successful executive with a fortune 500 company Concerned about:

–Long Term Protection for his family–Rising costs of Chronic Illness Care

Solution:Jack decides to purchase a $3M West Coast Life’s LifeTime Platinum III UL with the new ExtendCare Chronic Illness Rider.


Case Study #1

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Benefits:•Acquired $3M of guaranteed UL protection•Coverage for potential chronic illness•Elected $8500/month benefit•If he doesn’t use ExtendCare option, life insurance still passes income tax free to heirs

Premium w/o ExtendCare

Premium w/ ExtendCare

Premium Difference

$40,026 $41,931 $1,905

Jack adds $3M in chronic illness coverage for only 4.8% increase in cost!

This case study is hypothetical. Individual situations will be different based on age, sex, and health status of your clients. For current information, please use our WinFlex software.


Case Study #2

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Mary is 67F with $250,000 in CDs she plans on passing onto her 7 grandkids if she doesn’t use it. She is very concerned about chronic illness coverage.

Solution:Mary decides to purchase West Coast Life’s LTP III

UL with the new ExtendCare Chronic Illness Rider.

PaymentGuaranteed

Life Insurance

Available for Chronic Illness

Coverage

$250K single premium

$793,639 $793,639



Case Study #2

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Benefits:•Acquired $793,639 of guaranteed UL protection

•Coverage for potential chronic illness

•Elected $8500/month benefit

•If she doesn’t use ExtendCare option, life insurance still passes income tax free to heirs

•Reassured that she can potentially leave over $77K more to each of her 7 grandchildren



ExtendCare Rider Review

• Optional Rider on Competitive NLG UL (Premium Flexibility on Base Policy)

• Indemnity Payment Method (Benefit Can Be Used for Any Purpose)

• Client Can Specify Benefit Amount

• Available on up to Table 4

• Maximum Face Amount Up To $5M

• No Health License Required

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Questions?

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For Agent/Broker-Dealer Use Only. Not For Use With Consumers. For Agent/Broker-Dealer Use Only. Not For Use With Consumers.

Solving CLIENT NEEDS for Chronic Illness Care

WCLAG.1772 (03.11)

Documents

Solving CLIENT NEEDS for Chronic Illness Care