Physicians MutualVista Care Choices Long Term Care Insurance

Larry E. Pike, CLU, ChFC, LTCP, CSARegional Sales Manager

May 24, 2006

Physicians Mutual

• Founded in 1902• Been Selling LTC for 29 years• A+ rating from Weiss• A rating from AM Best• AA rating from S&P• Surplus to Asset Ratio- 54.7%

Vista Care Choices

P145 Non Tax Qualified

P146

Tax Qualified

P147 Tax Qualified HCC

P148 Basic Tax Qualified (Nursing Home)

Product Highlights

• Monthly Benefit vs. Daily Benefit• Calendar Day EP vs. Service Day EP• NO Modal Factor• $1000 Cash Payment at time of Claim• Alternate Plan of Care• Restoration of Benefits• Return of Premium Options• Shared Care Benefit

www.brokerage.physiciansmutual.com

• NO User-Id or Password Needed• Run Quotes• Download Software• Download Forms• Keep Current on Physicians Mutual

Long Term Care Underwriting

Glenn Miller – Lead LTC Underwriter

Physicians Mutual Underwriting Philosophy

• In the Middle

• Experience

• “Look for ways to issue”

• Relationships

• Profit Center

• Board of Directors – Doctors

• Underwriting Committee

Pre-qualification

• Increase Predictability• Save Money and Time• Quick turnaround• Multiple options to communicate:

– underwritinghotline@physiciansmutual.com

– Phone 800-299-9409– Fax: 402-633-5717

Pre-qualification

The more you know about your client, the more we can help.

• Age• Tobacco use• Marital status• Height/weight• Medications• All disclosed health conditions• Details, details, details

Co-Morbidity Chart

• Easy to use• Features 10 of the most common

chronic health conditions• Provides additional questions the

agent can ask their client• Used in the field or over the phone• Available on our web stie

Long Term Care Combined Medical Conditions Quick Reference ChartAtrial

Fib. . >6

mos.

Stroke

>4 yrs

ago

TIA

>4 yrs

ago

Valvular

Heart

Disease

Type 2

DM

Under

Control

PVD

>12 mo

or

CAD

Carotid

Stenosis

<50%

occl.

BP

Avg. >

170/100

Smoker in

past 12

mos.

CHF

(EF>40%)

Atrial

Fibrillation

diagnosed

over 6 months

Ago *

DEC

DEC

IC

IC

IC

IC

DEC

IC

IC

Stroke

Over 4

years

ago *

DEC

DEC IC DEC IC DEC DEC IC DEC

Transient

Ischemic

Attack

Over 4 years ago*

DEC DEC

IC DEC IC DEC DEC IC DEC

Valvular

Heart Disease *

IC IC IC

IC IC DEC DEC IC IC

Type 2

Diabetes *

Controlled

IC DEC DEC IC

DEC DEC DEC IC DEC

Peripheral

Vascular

Disease over 12

months ago

or Coronary

Artery Disease *

IC

IC

IC

IC

DEC

IC

DEC

IC

IC

Carotid

Stenosis

Less than 50%

occluded*

IC DEC DEC DEC DEC IC

DEC

IC IC

Blood Pressure

Averages

over

170/100 *

DEC

DEC

DEC

DEC

DEC

DEC DEC

DEC

DEC

Smoker within the

past 12

months *

IC IC IC IC IC IC IC DEC IC

Congestive

Heart Failure

(with Ejection

Fraction over 40%)

*

IC

DEC

DEC

IC

DEC IC

IC

DEC

IC

ATRIAL FIBRILLATION: 1. “Diagnosed less than 3 month ago?” If “yes” do not submit application. 2. If diagnosed over 3 months ago, ask: “Have you within the past 3 months had new symptoms of… …fatigue or shortness of breath or been unable to exercise?” …weakness, dizziness, or fainting?” …chest pain or racing heart not evaluated by your doctor?” If “yes” do not submit application.

CAROTID STENOSIS: 1. “Is the carotid blockage more than 50%?“ If “yes” do not submit application. 2. If blockage is less than 50%, ask: “Have you had within the past 3 months new symptoms of… …vision loss in one eye that comes and goes?” …weakness &/or numbness on one side of the body?”

…difficulty talking or difficulty understanding spoken words?” If “yes” do not submit applicaton.

CONGESTIVE HEART FAILURE (CHF): 1. “Is your heart ejection fraction less than 40%?“ If “yes” do not submit application. 2. If the ejection fraction is over 40%, ask: “Have you had within the past 3 months new symptoms of…

…fatigue or shortness of breath or been unable to exercise?” …a dry cough that won’t go away not evaluated by your doctor?” …swelling in the stomach or swelling in the legs or non-healing sores on the legs?”

If “yes” do not submit an application. CORONARY ARTERY DISEASE (CAD):

1. “Diagnosed less than 3 months ago?” If “yes” do not submit application. 2. If diagnosed over 3 months ago, ask: “Have you had within the past 3 months new symptoms of…

…pain, heaviness, tightness, burning, or pressure in the chest not evaluated by your doctor?” …weakness, dizziness, shortness of breath or been unable to exercise?” …a racing heart sensation not evaluated by your doctor?” If “yes” do not submit application.

DIABETES, TYPE 2:

1. “Is your diabetes not controlled very well?” If “yes” do not submit application. 2. If diabetes is controlled, ask: “Do you have…

…a history of recurrent or non-healing foot sores or numbness of the feet &/or legs? …vision problems associated with being a diabetic?” …kidney problems or have you been told you have too much protein in the urine?”

If “yes” do not submit application. PERIPHERAL VASCULAR DISEASE (PVD):

1. “Diagnosed less than 12 months ago?” If “yes” do not submit application. 2. If diagnosed over 12 months ago, ask: “Have you had within the past 3 months new symptoms of…

…increasing leg pain, leg fatigue, or leg cramps?” …skin color changes of the legs or non-healing sores of the legs?”

If “yes” do not submit application. HISTORY OF SMOKING:

1. “Have you had within the past 3 months new symptoms of… …fatigue or shortness of breath or been unable to exercise?” …pain with breathing or a chronic cough or couging up blood?” If “yes” do not submit application.

HISTORY OF STROKE:

1. “Was your stroke less than 4 years ago?“ If “yes” do not submit application. 2. If over 4 years ago, ask: “Have you had within the past 3 months new symptoms of…

…sudden numbness or tingling or facial paralysis?” …sudden vision changes or eye pain or speech difficulty or confusion?” …sudden weakness or dizziness or loss of balance or falling?” If “yes” do not submit application.

HISTORY OF TIA (TRANSIENT ISCHEMIC ATTACK):

1. “Was your TIA less than 4 years ago?” If “yes” do not submit application. 2. If over 4 years ago, ask: “Have you had within the past 3 months new symptoms of…

…sudden numbness or tingling or facial paralysis?” …sudden vision changes or eye pain or speech difficulty or confusion?” …sudden weakness or dizziness or loss of balance or falling?” If “yes” do not submit application.

VALVULAR HEART DISEASE (VHD):

1. “Have you had within the past 3 months new symptoms of… …racing heart or chest pain not evaluated by your doctor?” …cough that won’t go away or shortness of breath or been unable to exercise?” …fatigue or dizziness or fainting or leg swelling?” If “yes” do not submit application.

Underwriting rules

• 18-59 TI or APS’able condition• 60-64 TI required, APS’s able

condition or PE w/in last 3 years• 65-69 TI and APS required• 70-84 F2F and APS required

Cognitive Underwriting

• Under age 70 - Telephonic Interviews

• Over age 70 – Face-to-Face Interviews – MCAS

• Soft Signs

Here’s What You Can Expect Brochure

• Eliminates surprises during the underwriting process

• Answers many of the questions a client may ask.

• Sets realistic expectations

The Secret to LTC Underwriting

The Four C’s• Control• Compliance• Complication• Co-morbids

The Good LTC Risk

• <70• Married, both applying• Physically and socially active• Compliant with Treatment• Complete health disclosure

The Bad LTC Risk

• Dependent in ADL’s/IADL’s• Impaired mobility• Inactive/Frail• Cognitive concerns• Multiple medications• Multiple health impairments

Top 5 Reasons for Decline

• Diabetes• Cognitive Impairment• Heart Disease• Circulatory Disorders• Musculoskeletal Disorders

The Good Diabetic Case

• Compliant with diet, medication, exercise, follow ups

• No increase in medications it the past 6 months

• HgbA1c < 8.0• Below Standard Maximum Weight

Bad Diabetic Case

• Noncompliance• Obese• Onset within 6 months, or recent

medication change• Complications – retinopathy,

neuropathy, nephropathy, foot ulcers• Hx of CVA or TIA

Anatomy of a Case Case Study #1

• How do you think the agent did with app completion and field underwriting?

Application

• 68 F High blood pressure and diabetes. All other health questions answered no

• No Medications listed

Case Study #1

Phone Interview• Moved in with daughter 6 weeks ago• Hydrocodone• Insulin 40 units/day• Lasix 80 mg day• Two BP meds

Case Study #1

APS• CHF x 8 years• Stroke last year with residuals weakness

and speech impairment• Uses a walker• Needs help with standing, bathing, dressing,

medication, laundry, transportation, managing money

• Has received home health care for 7 years

Case Study #2

Application• 70 yo M 5’7 170#• Hytrin Prostate, Niacin Cholesterol• All other health conditions answered

no

Case Study 2#

Phone Interview• Declined by another carrier “too old” • Skiing accident in ’95• Gym, treadmill, walks dogs

Case Study #2

APS• 5’3 170#• BPH with TURP• Diabetes• Subdural hematoma with craniotomy

in ‘03

Case Study #2

APS continued• 4-04 decreased concentration• 1-05 moderate memory loss• Rx Aricept

Case Study #3

Application

• 52 M, married, 6’4 310#

• Digoxin, Coumadin, Toprol – A Fib

• 2 BP Meds

• 3 Diabetes Meds

• Both knees replaced

• Quoted Standard

Case Study #3

Telephone Interview• Pharmacist, knees replaced ’03, ’04,

Atrial Fib, Diabetes, A1c 7.6• Treadmill 4x/week, chews tobacco

Case Study #3

APS• Stress test 10 Mets, no ischemia• 6-04 ER visit recurrent PAF• 12-04 338#• Sleep Apnea, CPAP

Case Study #3

Did we issue?• If yes at what benefits and rate class?

Underwriting Guide

• Use Height/Weight Chart to determine weight class/eligibility

• Check uninsurable medication list• Check Co-Morbidity Chart• Check Medical Impairment section

for handling of disclosed health• If in doubt, speak with an underwriter

Questions?