Using veterans benefits as a cost-effective way to acquire new clients or customersArticle added by Thomas Day, MBA, CLU, CLRP on September 5, 2012
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Educating seniors who are veterans or single surviving spouses about their benefits has proven to be a very effective and low-cost method for acquiring new clients or customers. For those of you working in the senior market, this is a great method to get you in front of individuals or families needing your expertise or services.
Individuals eligible for veterans benefits are extremely jealous and eager for what they can receive and will readily respond to any invitation to learn more about those benefits. For example, mailers directed at senior veterans typically result in response rates of 5 percent to 8 percent. Seminars designed for educating senior veterans often result in 100 attendees or more.
Employers will invite you in for "lunch and learn" presentations to their older employees who have parents eligible for veterans benefits. Centers of influence willingly send you referrals for new veteran clients or customers when these centers understand you have the expertise to educate veterans about what they can get.
To assist a veteran in the preparation, presentation and prosecution of an initial claim for VA benefits, an individual must be accredited (see below). Furthermore, no individual or organization may charge a fee in any way related to helping a veteran or their surviving spouse or dependent with filing an initial application for benefits.
The marketing potential of the senior veteran market
According to the Department of Veterans Affairs census estimates, there are approximately 13 million veterans and their single surviving spouses age 65 and older. Comparing this to a total of 41 million Americans 65 and older, veterans and their single surviving spouses represent about one-third of the senior population. This 32 percent of the senior population is a huge and largely untapped source for finding new residents. According to the VA, about 42 percent of all veterans are 65 and older. This percentage will continue to grow as the bulk of the Vietnam veterans — the largest cohort — are still younger than age 65.
All kinds of companies and organizations across the country have found that devoting some of their marketing and promotion to veterans has resulted in new business. Private duty home care companies have the potential of increasing their business by 25 percent through this strategy. Care managers can reach out to more individuals needing their help. Assisted living facilities have found that promoting to veterans can be rewarding. Attorneys and financial planners use veterans benefits to expand their practices. Real estate and downsizing and moving companies have discovered new marketing potential. Reverse mortgage specialists can breathe new life into their efforts. Family mediators, home maintenance and repair providers, medical alert and medical equipment providers and a host of other organizations and companies that serve the senior community can use the education of veterans benefits to enhance their businesses.
Not only can you effectively reach new clients through educating veterans and surviving spouses about their benefits, you will also be working with the children of these individuals. Due to the nature of the benefits, the children will be involved in making decisions for their parents. This additional relationship also allows you to offer your services to the children who are typically in their late 40s or 50s. For example, we know of a highly successful long-term care insurance producer in the Midwest who derives 70 percent of his sales through promoting veterans benefits and working with the children who purchase the insurance. Other producers use the relationship with the children to help them with retirement planning.
For financial practitioners, real estate agents and attorneys, educating senior veterans about their benefits results in a 2-for-1 marketing advantage and theoretically should increase your business twofold over any other marketing strategies.
Putting things in perspective
Senior veterans are typically in receipt of four cash income programs from VA.
Two of these programs – pension and death pension – are paid to veterans
and their surviving spouses who are non-service-connected disabled. The other two of these programs – compensation and DIC – are paid to veterans and their surviving spouses due to disability or death from service connection. I will discuss these programs in a little more detail in a section below, but for now let's look at some statistics.
The table below represents the number of beneficiaries of these four benefit types of income that VA intends on paying in 2012. I had to interpolate the information to determine the numbers in the two age brackets in the table. This was based on how many cases are expected in different "periods of war" age groups. The numbers in each age bracket may not be totally accurate but they represent a good guess. From the table, there will be about 4,483,500 cases handled in 2012 and of those about 42 percent or 1,864,000 beneficiaries are age 65 and older. It is important to note that of those 1.9 million beneficiaries 65 and older, only about 23 percent or 591,400 beneficiaries will be receiving pension or death pension. Also note that the number of surviving spouses receiving DIC is about 15 percent more than those receiving death pension.
Why are these observations important? Because those practitioners who focus on educating seniors about veterans benefits almost always direct their attention exclusively to pension or death pension. Those seniors who could benefit from knowing more about compensation and DIC and the aid and attendance assistance available from those benefits are completely ignored. Yet these seniors receiving service-connected payments represent 77 percent of those beneficiaries age 65 and over.
If you are going to educate seniors about veterans benefits, then almost all of you are missing the boat by only concentrating on 23 percent of those potential beneficiaries. You're ignoring the other 77 percent.
|Estimates of the average number of cases for 2012||Younger than 65||Age 65 and older||Total all ages||% of all ages 65 and older||Age 65 and older % of all ages|
|Death pension total||14,200||189,000||203,200||10.1%||4.2%|
|Total cases each age bracket||2,619,500||1,864,000||4,483,500||41.6%|
Source: Department of Veterans Affairs 2012 Budget
Understanding benefits for senior veterans and their dependents
Pension and death pension
Commonly called "aid and attendance," these twin benefits provide cash payments to veterans who served during a period of war or to their single surviving spouses. Pension helps to cover the cost of home care, assisted living and nursing home services. Cash income payments from pension range from about $700 a month to a little over $2,000 a month, depending on the type of
claim and the medical rating involved. Most people don't even know of the existence of this benefit. VA does not advertise it and, as such, many eligible people never apply.
It is unfortunate that pension has been misnamed "aid and attendance." "Aid and attendance" and "housebound" are actually additional monetary allowances provided with pension if the recipient of pension monies needs the regular aid and attendance of another person or is considered housebound. The misnomer creates confusion because an aid and attendance assistance allowance is also available for service-connected disabilities (disability compensation) and to a spouse of a service connected disabled veteran and also an aid and attendance allowance is available to a surviving spouse of a veteran if the surviving spouse is receiving DIC (dependents indemnity compensation).
Approximately 206,900 senior veterans will receive pension in 2012 and 188,900 of senior veteran survivors will receive death pension in 2012.
Disability compensation is a tax-free benefit paid to a veteran for a service-connected disability that happened as a result of active duty, active duty for training, inactive duty training or injury from VA healthcare. Cash income payments for compensation range from a low of about $130 a month to a high of about $8,000 a month. Special benefits like grants for new automobiles or modifying existing automobiles, grants for constructing or modifying homes, clothing allowances and so on are payable for severe service connected disabilities.
An aid and attendance or housebound assistance allowance in the form of Special Monthly Compensation is available to the
veteran who is 100 percent disabled. A veteran rated for 100 percent disability will receive a check for $2,769 a month in 2012 and if the veteran has a spouse, the amount is $2,924 a month. A 100 percent disabled veteran meeting the SMC aid and attendance criteria can receive $3,446 a month and if that veteran has a spouse, the amount can be $3,601 a month. Higher amounts are possible if the aid and attendance involves certain severe disabilities.
This aid and attendance allowance is not an automatic benefit and most veterans don't even know about this special assistance and never apply for it. If the veteran receiving compensation is not 100 percent disabled, the need for aid and attendance will probably allow for that increase in rating and the additional assistance for aid and attendance on top of that. Most veterans receiving compensation don't have a clue as to their eligibility for this special benefit.
Also, an aid and attendance assistance allowance is available to the disabled spouse of a veteran where the veteran is 30 percent or more disabled. The amount goes up as the disability rating goes up. For example, a 30 percent disabled veteran can generate a $42 a month benefit for his or her disabled spouse. A 100 percent disabled veteran can generate $141 a month. Again, it is not common knowledge these additional allowances are available and VA does not normally notify people of their existence.
Of particular note for disability compensation are Agent Orange claims for each and every veteran who was stationed in Vietnam and who has developed presumptive health conditions such as certain forms of cancer, type II diabetes, heart disease and Parkinson's disease. Veterans with service-connected hearing loss can also make claims and receive free hearing aids. This disability rating will also get them into the health care system. Many veterans don't know of the existence of Agent Orange claims or the fact that they might be eligible for service-connected disability for hearing loss. Approximately 3,980,000 beneficiaries will receive compensation in 2012 and of those, approximately 1,231,000 are age 65 and older. Of all beneficiaries, approximately 326,000 are 100 percent disabled.
Health care benefits
The VA health care system is the largest single provider of health care in the United States. It has also been recognized by numerous surveys as being one of the best providers of health care. Not all veterans can receive care in the system. Eligibility requires either service-connected disability, receipt of pension, special service recognition or low income and less than $80,000 in assets. For the aforementioned beneficiaries, all services are free and medications are $8.00 per month per medication regardless of what it is. There are no other out-of-pocket costs such as health care premiums. Help can also be provided with disability-required home renovation grants of $2,000 or $6,800, orthotics, prosthetics and in certain cases, hearing aids. VA outpatient clinics are available in most communities. Approximately 8,400,000 individuals are enrolled in the health care system.
Dependents Indemnity Compensation (DIC) — also called Dependency and Indemnity Compensation — is payable to eligible survivors of a military service member who died on active duty or whose death after service resulted from a service-connected injury or disease. DIC is automatically granted to a surviving spouse for a veteran who was permanently and totally disabled for 10 years or more. DIC currently pays $1,195 a month to a surviving spouse. Additional amounts are available if there are dependent children.
If the surviving spouse needs the aid and attendance of another person such as home care, assisted living or nursing home care, an additional $296 assistance benefit will be paid. This DIC with aid and attendance benefit is about $400 more a month than a surviving spouse can receive from death pension. This additional benefit is not automatic and most individuals receiving DIC do not even know it is available. Approximately 203,200 spouse survivors will receive DIC in 2012 and of those, approximately 189,000 are age 65 and older. The majority of these are surviving spouses of veterans from the Vietnam era.
Money is available for burial costs for veterans who were service disabled, receiving pension or died under VA care. If the death was a result of service-connected disability, $2,000 is available. If the death was non-service related, up to $700 is available for plot allowance and burial and funeral expenses. All veterans also receive free burial in state and federal VA cemeteries. Under certain conditions, spouses and other family members can receive free burial in state and federal VA cemeteries. All veterans are eligible for a grave marker (or equivalent monetary allowance), a flag for the coffin, a graveside honor guard and a letter from the President of the United States. Approximately 60,000 veterans will receive the burial allowance in 2012 and 33,000 will receive a burial plot. VA expects about 18,000 service-connected deaths in 2012 and claims for about 350,000 grave markers. About 500,000 flags will be given for burial.
State veteran benefits
All states offer various additional benefits to veterans to include special recognition, property tax reduction, free hunting and fishing and state parks admission as well as a whole host of other benefits. Some states are more generous than others and in some states, veterans can receive a one-time cash stipend.
The issue of accreditation
What is accreditation?
Accreditation is the authority granted by the Department of Veterans Affairs to an individual who represents veterans with claims for benefits and for any assistance associated with those benefits. Accreditation is essentially a federal license for assisting veterans with their benefits. No individual can assist veterans on a regular basis without being authorized by VA to provide this assistance. Title 38 USC 5901 and Title 38 USC 5902
Can an organization be accredited?
There is no provision for accrediting an organization. Accreditation is only for individuals and any individual assisting a veteran must be accredited. Non-accredited individuals cannot assist veterans under the direction of an accredited individual. This violation is happening all too frequently. Exceptions to this rule are discussed below.
How does an individual become accredited?
Any individual desiring to be accredited must have a thorough knowledge of veterans benefits, the application process and of appeals and of other issues dealing with representing veterans. The candidate must successfully pass a comprehensive exam administered by VA or by a recognized service organization. Attorneys are exempt from this requirement for studying, having a prerequisite knowledge of veterans benefits and taking an examination. Being accredited also requires a standard of personal character as determined by the Office of General Counsel. The VA Office of General Counsel has oversight and approval authority for the accreditation process and maintains a list of all accredited individuals. Title 38 CFR § 14.629(a)(b)
At what point in assisting with an application must an individual be accredited?
The VA Office of General Counsel has ruled that accreditation is required when specific advice is provided in preparing for an application for benefits. The need for accreditation starts well before any paperwork is processed. Many non-accredited individuals are assisting veterans with specific advice in helping them prepare for a claim (such as advice on assets and income) and are in violation of federal law because of it. See va.gov.
Are there any exceptions to the requirement for accreditation?
Any non-accredited individual can assist a veteran one-time only with an application. Assisting any veteran a second time requires authorization. In addition, an individual can assist under the direct supervision of an accredited attorney as outlined. This individual must be a certified paralegal of the law firm, a law student in the firm or an intern in the firm. A consent letter allowing this representation must be signed by the applicant for veterans benefits and this consent letter must be filed with the regional office of jurisdiction. Title 38 CFR § 14.630 and 38 CFR § 14.629(c)(3)
How can you find out if someone is accredited?
A letter or written statement does not prove authorization for accreditation. The Office of General Counsel maintains an updated list of accredited individuals on its website. This list is the official accreditation authority. You can find this list by going to www.accreditlist.com.
Are there penalties if assistance with application is provided by non-accredited individuals?
There is currently no criminal penalty for unlawful representation for veterans claims. (There are, however, currently a number of bills in Congress to criminalize unlawful representation for veterans and the charging of fees for this assistance.) Any person or organization promoting assistance on behalf of its employees or agents and found guilty of misrepresentation will be issued a cease-and-desist letter and barred from assisting veterans. Persisting in unlawful representation will likely result in further action against the individual or organization by the Department of Justice for violation of federal law.
If you recommend, sponsor or refer non-accredited individuals are you liable?
As a general rule, probably not, unless you are directly involved in any unlawful behavior. This does not mean you can avoid the consequences of promoting non-accredited unlawful activity. If there is a complaint against you, you have weakened your defense if there was unlawful behavior involved based on your perceived approval. If you have liability insurance, your insurance company would probably refuse to cover your costs and could cancel your policy because of this risk, even if you don't make a claim. If there are complaints, fines or lawsuits as a result of non-accredited unlawful behavior, you could be sucked into unwanted negative publicity in newspapers, on the Internet or on television.
What are the disadvantages and advantages of being accredited?
There is one disadvantage to educating veterans about their benefits. Generally, the veteran looks to you for help with the claim for benefits since the VA itself and the local veterans service organizations who handle these claims are underfunded, undermanned and extremely busy. Often, it is difficult to get timely assistance from these organizations. If you do not wish to help veterans with claims, the life resource planning model will free you from this obligation and also free you from the obligation of being accredited. If you choose to become an accredited agent, there are study materials and practice questions available.
To assist veterans is time-consuming and you cannot charge a fee for helping them. In addition, you must be accredited, which requires — for non-attorneys — studying for and passing an exam and maintaining continuing education. On the other hand, there is also a decided advantage to being accredited directly with VA. It makes you much more credible, it allows you to provide specific advice, it allows you to assist in applications for benefits and it allows you to charge a fee for assistance with appeals.
Currently, only about 280 people nationwide, who are not attorneys or representatives of service organizations, have this special independent licensing from VA. (Veterans service organizations accredit their own people in-house with VA approval and not independently through VA.) You could be part of a very exclusive club that does not require you to be an employee of a service organization.
Attorneys, fortunately, do not have to take the test and are accredited automatically by VA. Unfortunately for attorneys, this means they must invest in substantial additional training and instruction in order to understand how to assist veterans. It is our experience that many attorneys do not go after this additional training and as a result, could end up being a roadblock to providing proficient assistance with applications for benefits.
The advantage of using life resource planning to promote veterans benefits
By focusing your promotion on life resource planning, you can avoid the issue of accreditation and directly helping veterans with their applications for benefit. You will still educate veterans about their benefits but you will do it in the context of providing life resource planning for these seniors and their families. According to the VA Office of General Counsel, accreditation is not required when you are providing education about veterans benefits.
By promoting life resource planning and putting veterans benefits under that umbrella, you shift the focus from strictly veterans benefits to the larger picture of helping all seniors — including veterans — prepare for their final years of life. Life resource planning concentrates on preserving assets, increasing income, reducing debt, providing necessary legal documents, providing end-of-life planning, implementing long-term care plans, solving family disputes, understanding the implications of asset preservation on Medicaid eligibility, finding other sources of funding such as VA benefits, grants and reverse mortgages, converting assets to income, managing gifted assets for the children and identifying strategies that would reduce income tax or estate taxes.
The life resource plan will uncover the means and the eligibility path for veterans benefits if they are available. The plan is put together by a third-party entity and if veterans benefits are included in the plan, only accredited individuals designing the plan for you will make recommendations to that effect. This isolates you from the need to be accredited as long as you avoid specific advice on the application process when presenting the plan. The life resource planning model also includes a third-party entity, using accredited representatives, that specializes in preparing veterans benefits applications for life resource planners and removes the requirement from you for assisting with claims.
If you choose to follow the life resource planning model, you can confidently educate veterans about their benefits without being accredited, you can avoid the time-consuming process of assisting veterans in applying for benefits and you can focus your attention on the big picture of helping seniors optimize their resources for their final years of life.
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