FHC STUDY GROUP APRIL 2015

August 31st – September 1st 2015 June 8th-9th 2015

Starting the Future Care Discussion Ask Your Clients One Question & Sell them Future Care Protection:

Welcome Bob Maruska Sarah Molitor

Objective: Overcome obstacles to LTC sales by sharing experiences and solutions. Help initiate the LTC conversation by providing a step by step process. Determine agents’ specific interest/needs for further LTC conversations

Clark Creighton Pacific Life Long Term Care Specialist (877) 463 – 0065 Clark.Creighton@PacificLife.com

Agents, tell us what you think: What are your experiences with finding the correct LTC solution? What obstacles prevent you from moving forward? How do your clients fund LTC (now and in the future)?

Discuss Need: Wildcard Costs 70% over age 65 will require Long Term Care Historical average cost: $100,000 a year Historical average need: 2-3 years Ruinous to retirement income and estate plans For individuals needing long-term care, the cost can be significant. The cost will vary depending on what kind of care is needed, where care is received (at home or in a facility), and the state where the care is provided. Regardless of the actual cost, we will refer to long-term care costs in this presentation as “wildcard costs,” because long-term care may or may not be needed, but, if it is, Medicare generally does not provide coverage for it. As indicated at the beginning of our talk, Medicare is governmental health insurance for the aged and disabled. It will only pay for a medically necessary skilled nursing facility or home health care when certain conditions are met. Thus, while it will pay for a limited amount of skilled care, Medicare does not pay for custodial care or what we have been calling long-term care. This may come as a huge surprise to some clients. The financial risk of long-term care is significant and can be ruinous to both retirement income and estate plans. [Read slide].* *Source: U.S. Administration on Aging, Department of Health and Human Services, May 2010. *Source: U.S. Administration on Aging, Department of Health and Human Services, May 2010. For Life Insurance Producer Use Only. Not for Use with the Public.

The One Question to Ask: What assets will you spend to pay for long term care?

3 Step Process What is your plan? With what money? Let’s do it better

Next Steps Discuss the need for LCTI with clients Consider what type of LTCI is suitable based on client’s needs and resources Review existing insurance Possible source of funding for LTCI Here’s a list of next steps [read slide.] For Life Insurance Producer Use Only. Not for Use with the Public.

Basic Forms of Long-term Care Insurance (LTCI) Traditional Hybrid or Asset-Based Life Insurance with LTC rider Joint Plans In general, LTCI may be classified as traditional or hybrid. Traditional policies cover only one contingency: the need for long-term care. Hybrid policies combine the need for life insurance or annuity income with this contingency. Hybrid policies (or asset-based LTCI as they are sometimes called) grew out of the provisions of the Pension Protection Act of 2006 (PPA). The PPA provided new tax benefits for life insurance policies and annuity contracts that also offer long-term care protection. For Life Insurance Producer Use Only. Not for Use with the Public.

Planning Potential income sources to pay expected LTCI premiums: Social security Pensions Annuities Immediate Variable annuities with guaranteed income riders Underwriting the cost of insurance premiums, including perhaps LTCI, may come from such lifetime income sources as Social Security, pensions, and immediate or variable annuities with guaranteed lifetime income riders. For Life Insurance Producer Use Only. Not for Use with the Public.

Planning for future care now is best for you AND your client.