Worksite LTCi Is Advantageous to Benefits Brokers

Worksite LTCi Is Advantageous to Benefits Brokers

Multi-Life LTCi can add an additional revenue stream to your existing client base that cannot be removed by a Broker of Record letter. When properly structured, a case can continue to increase revenue over time.

Why LTCi? Most client companies do not have it, even though it is something employees are asking about. Plus, the employer can fund a base plan for a group of employees of their choosing, and then deduct any funded premium.

How can ARM help? ARM is used as the enrollment team. We focus exclusively on LTCi, so we enroll, but more importantly, we educate. Our involvement helps maximize buy-ups, voluntary enrollment, and spousal/partner participation. With our help, the minimum funded plan is almost always exceeded with buy-ups, spousal/partner coverage and voluntary participation from the rest of the employee population.

Minimum Carve-Out Basics

  • Base plan is on average $100 per employee per month
  • 10 employee minimum to secure Simplified Issue Underwriting
  • Employer can chooses who gets it
  • Employer can deduct the premium

Broker Revenue Example

Let's look at a basic minimum plan of 10 funded employees with an annual premium of $100 per employee per month [$12,000 annualized premium].

Broker Revenue Year One $3,9000
Broker Revenue Years 2-10 $480/year [$4,320 total]
  • Revenue is basically half the first year's premium plus the other half split over the next nine years
  • Most importantly, revenue is vested from day one!

Case Study: Paternalistic Engineering Firm

An engineering firm with 100 employees. The owner wanted to provide all employees with core LTCi coverage.
Strategic Approach
We created an employer funded significant core benefit for those employees with tenure of 5 years or more, and created a separate credit program for those participating voluntarily. This created savings on the part of the employer as the average age of the participant is lower than without the bonus program.
The company had grown from 30 employees to 100 employees in 5 years, and the owner was looking for attraction AND retention tool. The owner grasped the concept of LTCi very quickly and wanted to make sure the core benefit represented "meaningful" coverage. Ultimately, budget restraints prevented higher level coverage for all employees.
The enrollment was extremely successful with a 46% voluntary participation rate. The final result was $26,000 in employer funded premium and $10,000 in voluntary premium, netting $18,000 in first year commissions to the broker, and an additional $2,276/year in years 2-10. This number is still growing, too! Every year, four to eight employees reach five years of service and thus tenure into the funded class, generating additional revenue for the broker.

See What Our Broker Partners Are Saying

Michael F. Magliano

Principal Partner, Patriot Benefit Solutions, North Andover, MA
“I introduced ARM to my employer client who asked about Long-Term Care insurance. ARM sold a funded program based upon the tenure of employees and has been running with it for the last four years. This is the lowest impact additional revenue stream I’ve ever had, and they have a great relationship with the client.”