Long Term Care Insurance What is Long Term

Long Term Care Insurance

What is Long Term Care? Long Term Care (LTC) is the care provided when you are unable to perform basic activities of daily living (“ADL’s”) or have a severe cognitive impairment

What are “ADL’s”? Activities of Daily Living – 1. Bathing 2. Dressing 3. Toileting 4. Transferring 5. Eating 6. Continence

What is a Cognitive Impairment? Cognitive impairment is the inability to take care of one’s self due to a mental impairment such as Alzheimer’s or dementia

Where is care provided? Long Term Care can be provided in a variety of different settings – • Your own home • Nursing home • Assisted Living Facility • Adult Day Care • Hospice

What is the cost of LTC? in New Jersey… Median cost for a semi-private Nursing Home Room is $300/day* Median cost for an Assisted Living Facility room is $5, 430/month* *Genworth 2014 Cost of Care Survey

Why Consider LTC Insurance? • Long Term Care insurance is an affordable way to help pay the high costs of long term care services • Helps you maintain your independence so you won’t become a burden on your family • Helps you protect your assets • Gives you choice and control over where and from whom your care is provided

What is your plan? ? • If you don’t have Long Term Care Insurance, what is your plan? ? • Let’s look at an example…. .

Example…. . Tom is 50 years old, married and in good health. He sets aside $1, 900/year for Long Term Care Self-insuring Tom invests $1, 900/year. His money grows 4% each year net of taxes. In 20 years he will have approximately $58, 800

Example, cont. Long Term Care policy Tom purchases an LTC policy with an annual premium of $1, 900. He selected the 4% compound inflation rider. In 20 years, he will have a Long Term Care benefit of over $420, 000!* Genworth married, preferred rates in NJ. Assumes a starting monthly benefit of $5, 800 with a 36 month BP. Actual annual

Long Term Care carriers • Genworth • Mutual of Omaha • Trans. America

LTC Insurance Options Benefit options – • Monthly maximum – benefit available to pay for covered expenses in a month. Typically range from $1, 500 -$12, 000 in $100 increments • Daily maximum - benefit available to pay for covered expenses in a day. Typically range from $50 -$400 in $5 increments

LTC Insurance Options, Cont Elimination period Similar to a deductible, this is the initial period of time when care is needed that the policy does not pay. Choices are 30, 60, 90, 180 days.

LTC Insurance Options, Cont Benefit Period/Multiplier This is the amount of time used to calculate your coverage maximum. Choices are typically 24, 36, 48, 60, 72 or 120 months. Example $5, 000 Monthly Maximum × 48 Month Benefit Multiplier = $240, 000 Coverage Maximum (Pool of Money) In this example, the policyholder has $240, 000 available to be used to reimburse covered long term care expenses.

LTC Insurance Options, Cont Inflation options This optional benefit helps your coverage keep up with the rising cost of care by growing your Daily or Monthly Maximum and pool of money. Compound or simple increases will be applied to your Daily or Monthly Maximum and remaining pool of money on each anniversary of your coverage effective date while the policy is in force INFLATION PROTECTION OPTIONS • Compound Inflation Option - 3%, 4%, 5% • Simple Inflation Option • Future Purchase Option or Step Up Option

Life Insurance with LTC rider • Life insurance is now available with a rider that covers Long Term Care related expenses as well. With this product, the cost of your care is deducted from the benefit amount on your life insurance, up to a specified maximum. • If you do not use your LTC coverage, you still have life insurance.

Single Premium LTC Products One America Asset Care and Lincoln Money Guard • Single premium or limited pay product – gets basic life benefit or larger pool for LTC coverage • One America– Multiple payment options, Lifetime Benefits • Lincoln – Phone call interview, less benefit • Great opportunity for 1035 exchange of inforce life policies

Questions?