Creating the Plan for Long-Term Care Strategies to Help You Live The Way You Want to Live

Get the age demographic right… Target market for this discussion are those in their 50’s through mid 60’s… They are beginning to see their friends get sick or even die. Many are taking care of their parents And it begins to sink in they will be taking great financial responsibilities into retirement

3 The financial demographic… Follow the obligations (lifestyle) The larger the financial commitments, the greater the consequences are to those he loves IF … Hint: Who are your best buyers of life and disability insurance? These are the people you want to talk to: Your best clients

4 Understanding the profession of estate planning allows the professional to… Ask the right questions which leads to… The opportunity of creating a plan for succession and tax avoidance which leads to… Protecting that plan with life insurance.

5 Understanding the profession of financial & retirement planning allows the professional to… Ask the right questions which leads to… The opportunity of creating a financial/ retirement plan which leads to… The sale of appropriate investments which leads to… Protecting that plan with life insurance.

6 Ask the right questions which leads to… The opportunity of creating a plan for long-term care which leads to… Protecting that plan with long-term care insurance. Understanding the profession of long-term care allows the professional to…

7 New definition … Long-term care is not a place … … it’s an event “Functional disability”

8 Physical Activities of Daily Living (ADLs) Bathing, dressing, transferring, eating, toileting, continence “Stand-by” help with 2 OR Mental Cognitive Impairment Alzheimer’s, dementia, stroke, head injury Requiring supervision

9 Long-term care is a continuum of care, housing and services people and their families may need because of a chronic illness. It’s assistance with so called activities of daily living (explain) or supervision caused by severe cognitive impairment. The goal is, whenever possible, to have the individual remain within the universe that he/she has created.

Why is Long-Term Care a Problem? We are living longer!

Key question What consequences will providing care for an extended period of time have on your clients family’s emotional, physical and financial well-being?

Consequences to families… Stress of care giving hikes older adult mortality rates. Caregiver can become as chronically ill as the patient. Caregivers suffer from stress related illnesses. Long-term care tends to tear families apart because the responsibilities of providing care is not shared equally.

What’s your plan to protect your clients family?

The plan is to stay in the community for as long as possible without devastating the family’s emotional, physical and financial wellbeing

The goal… Is similar to life or disability insurance planning….. To place the family back where they were financially, prior to the event happening

Plan for Long Term Care Your Spouse Long Term Care Insurance Medicare/VA Medicaid Your children and/or extended family Your Income & Assets What is your plan?

The plan depends on the family… Single individuals Married with no children Married with children Second marriages

18 Alone in Illness: Seeking a steady arm to lean on 27% of households are comprised of single people. 27% of households are comprised of single people. Most are worried about becoming a burden to their siblings and friends. But few had a plan. Most are worried about becoming a burden to their siblings and friends. But few had a plan. Many are concerned they might not have the income or assets to pay for their care. Many are concerned they might not have the income or assets to pay for their care. Hospitals and home care agencies often dealt with patients friends on an extended basis. Hospitals and home care agencies often dealt with patients friends on an extended basis.

19 “People living alone are among the most difficult cases. Anyone who is sick or disabled needs someone to quarterback their care, but people who live alone cannot end up being their own quarterbacks at a particularly vulnerable time.” James Bentley, Senior VP James Bentley, Senior VP American Hospital Association American Hospital Association

20 Single: no spouse or children Staying at home is a limited option because there is no infrastructure to support it. It may be possible at the beginning of the illness if the individual works closely with his local home care agency. Staying at home is a limited option because there is no infrastructure to support it. It may be possible at the beginning of the illness if the individual works closely with his local home care agency. A CCRC makes more sense because the environment allows maximum flexibility. A CCRC makes more sense because the environment allows maximum flexibility. Assisted living is more limited because he may not be able to make the decision if he has a cognitive impairment. Dementia is also problematical; he may contest the decision made by someone else, or the facility may not take him. Assisted living is more limited because he may not be able to make the decision if he has a cognitive impairment. Dementia is also problematical; he may contest the decision made by someone else, or the facility may not take him.

Plan of care… Home Care Assisted living CCRC QB

23 Married: no children Home care is viable, but the client should consider how he will be supported without children to assist the healthy spouse. Home care is viable, but the client should consider how he will be supported without children to assist the healthy spouse. A CCRC makes more sense because the environment allows maximum flexibility; the couple can move in while they are both healthy. Some facilities may allow both to move in even if one is impaired. A CCRC makes more sense because the environment allows maximum flexibility; the couple can move in while they are both healthy. Some facilities may allow both to move in even if one is impaired. Assisted living also makes sense because the healthy spouse can make decisions. Both can move in allowing the healthy spouse to continuing providing care within an infrastructure of support. Assisted living also makes sense because the healthy spouse can make decisions. Both can move in allowing the healthy spouse to continuing providing care within an infrastructure of support.

Plan of care… Home Care Assisted living CCRC QB

26 Children Married: This is the best scenario for remaining in the community, because there is a spouse and probably at least one child and perhaps more to assist. The assistance from the caregivers is enhanced with LTCi because the policy pays for both formal and informal care (depending on the benefits) to support their efforts. The role of the children would therefore be reduced to emotional support rather than hands on. This is the best scenario for remaining in the community, because there is a spouse and probably at least one child and perhaps more to assist. The assistance from the caregivers is enhanced with LTCi because the policy pays for both formal and informal care (depending on the benefits) to support their efforts. The role of the children would therefore be reduced to emotional support rather than hands on. A CCRC makes sense because the environment allows maximum flexibility; the couple can move in while they are both healthy. Some facilities may allows both to move in even if one is impaired. A CCRC makes sense because the environment allows maximum flexibility; the couple can move in while they are both healthy. Some facilities may allows both to move in even if one is impaired. Assisted living also makes sense because the healthy spouse can make decisions. Both can move in allowing the healthy spouse to continuing providing care within an infrastructure of support. Assisted living also makes sense because the healthy spouse can make decisions. Both can move in allowing the healthy spouse to continuing providing care within an infrastructure of support.

Questions to ask if the client has children… Where do your children live? Where do they work ? Who is likely to provide the care? How do the children get along?

28 Second marriage: children It is likely the couple will wish to stay home when one of them gets sick. Consideration must be given to how the children of the sick spouse will interact with the caregiver spouse. This should be discussed well in advance and the children informed. It is likely the couple will wish to stay home when one of them gets sick. Consideration must be given to how the children of the sick spouse will interact with the caregiver spouse. This should be discussed well in advance and the children informed. It is possible to remain at home unless family dynamics are difficult. Otherwise a CCRC makes sense if the couple agree the house is too big and want to move into a community with this type of structure (independent living, assisted living and a skilled nursing home). It is possible to remain at home unless family dynamics are difficult. Otherwise a CCRC makes sense if the couple agree the house is too big and want to move into a community with this type of structure (independent living, assisted living and a skilled nursing home). Assisted living facility may make sense as well because there is a healthy spouse to make decisions. LTCi works perfectly because the children of the well spouse will wonder who is paying the cost. Assisted living facility may make sense as well because there is a healthy spouse to make decisions. LTCi works perfectly because the children of the well spouse will wonder who is paying the cost.

Plan of care… Home Care Assisted living CCRC QB

How to fund the plan of care? $20 per hour x 8 hours = $ 160 per day $20 per hour x 10 hours = $ 200 per day $20 per hour x 12 hours = $ 240 per day $20 per hour x 24 hours = $ 480 per day

Projected Cost of Home Health Care

What Pays for Long-Term Care? MONEY Qualified Non-Qualified

“I can self insure” The cost of liquidating qualified funds to pay for care. The loss of investment opportunity on funds liquidated to pay for care. Assets that are difficult to convert without severe tax or market liability. Preservation of principal.

People have continuing commitments…...lifestyle of surviving spouse...care for children or grandchildren...protection of legacy assets...to their place of worship What happens if they need care?

36 $1,000,000 = $ 40,000 $1,500,000 = $ 60,000 $2,000,000 = $ 80,000 $3,000,000 = $120,000

37 What percentage of that income do you think is committed to lifestyle?

110%

39 “Would you like to pay for your care with income and principal or interest?”

“Take the loss you can afford.”

$3,000,000 $180,000 $120,000 $5,000

“I can’t assure you that if you need care over a period of years, the income stream will be sufficient to support your lifestyle and pay for care at the same time.”

Unintended invasion of principal

What have you allocated from your clients retirement income and portfolio to pay for their extended care plan?

Long-Term Care Insurance Home care benefits Assisted Living Facilities Reimbursement, Indemnity or Cash Limited pay options (10 Pay) Care Co-ordination Shared Care Plus BENEFITS will pay for

How to fund the plan of care? $20 per hour x 8 hours = $ 160 per day $20 per hour x 10 hours = $ 200 per day $20 per hour x 12 hours = $ 240 per day

Long-term care insurance Provides income to be used to pay for care your family will find most time consuming and stressful. Provides income that allows your spouse to maintain her relationship with you and supervise your care. Provides income that allows your children to maintain their relationship with you and supervise your care

56 Life insurance  Disability income  Annuities  LTCi  Guarantees income  Guarantees income  Guarantees income  Guarantees income  Which preserves lifestyle

Long-Term Care Insurance allows your clients retirement plan to execute for the purpose which it was intended: RETIREMENT

Our clients goal is to live a life of significance… Do they want to leave a legacy of dependency after living a full and significant life? Do they want to cause financial and emotional stress to the families that they have spent their lives building and loving?

Planning for care… 3 Choices Make a bet (avoid & hope) Have a plan with an allocation of income and assets (unintended invasion of principal) Have a plan with a transfer of risk

What’s your plan to protect your clients retirement income/portfolio and family?