1 Life Insurance and Long Term Care Presented by Mike Ferrell, CEO Strategic Benefits Group, Inc. Bloomington, MN

2 Background Strategic Benefits Group is a life and long term care brokerage company representing several different insurance carriers 13 years of experience on LTC Primary area of work is Estate Planning

3 The Basics of Life Insurance Primarily two different types Term Insurance Renting temporary coverage Permanent Insurance Has Equity Cash Value has many uses

4 Other Options Most insurance policies have options that an individual can add on to a policy such as: Childrens riders Disability waiver riders Family and spouse riders Terminal Illness riders Accelerated Death Benefit Riders

5 Long Term Care Funding Options Permanent Life Insurance can be used to fund long term care costs Withdrawals can be used from cash value Loans against the policy Transferring the cash value into an annuity that pays out an income stream to pay the LTC costs

6 The Newest Type Of Life Policy Linked Benefit Policies A Life Insurance policy that has a specific benefit for Long Term Care Some use an accelerated death benefit, some have an actual long term care benefit

7 Linked Benefit Policies Pros Give clients flexibility Clients get death benefit, LTC benefit and can access cash value if needed Guarantees the premiums Get a benefit if they never use it for LTC Cons Funding is typically done on a single premium basis Death benefit can be reduced by LTC claims Underwriting

8 Industry Trends As insurers continue to struggle with pricing for long term care insurance, linked benefit policies will be a cost effective way for them to go As clients continue to see LTC premiums increase, life insurance and linked benefit products will become an attractive alternative