1. 0-M39 R-10/2002 Allianz Life TM LTC client seminar: The impact of long term care on wealth management

2. 0-M39 Allianz Life TM The 3 phases of wealth management Asset accumulation: Real estateMutual funds StocksEquity indexed annuities BondsCDs Fixed annuitiesVariable annuities Asset distribution: Retirement income Social Security retirement benefits IRA distributions Estate planning Inheritance Asset protection: Life insuranceAuto insurance Disability insuranceHomeowners insurance Health insuranceLong term care insurance

3. 0-M39 Allianz Life TM What is long term care insurance and what does it do? Long term care insurance is not just nursing home insurance!  Nursing facility  Assisted living facility  Home and community based care  Adult day care  Hospice care Long term care is also:  Illness and injury  Disability  Cognitive impairment

4. 0-M39 Allianz Life TM Which of these is a concern to you?  Depending on others for care  Being a burden to children or spouse  Preserving independence and avoiding welfare  Leaving a legacy of debt  Maintaining access to quality care  Spending life’s savings on care expenses  Protecting assets and having an estate for your heirs

5. 0-M39 Allianz Life TM The facts  Over 50% of all Americans will need long term care in their lifetime. (Americans for LTC Security, August 1999)  For a couple turning 65, there is a 75% chance that one of them will need long term care. (The Wall Street Journal, June 2000)  Family caregivers provide 80% of long term care; institutions such as nursing homes provide only 20%. (ALS Association, 1999)

6. 0-M39 Allianz Life TM What is the cost of care?  Costs vary by location  Nursing homes: $44,895 per year, national average (LifePlans, Inc., 2000 National Claimant Study)  Assisted living facilities: $12,000 to $36,000 per year (NCAL/AHCA, Survey of Assisted Living Facilities, 1996)  Home health care aide: $12.00 to $24.00 per hour (Kiplinger’s Retirement Report, Hourly Cost of Home-Care Help, January 2001)  Depending on where you live, long term care can cost anywhere from $40,000 to $100,000 annually and the cost is projected to triple over the next 20 years (Financial Planning, September 2000)

7. 0-M39 Allianz Life TM Who will pay?  Medicare?  Medicaid?  Assets?  Your Family?  Transfer the risk?

8. 0-M39 Allianz Life TM The facts about Medicare  Medicare’s skilled nursing facility (SNF) benefit does not cover most nursing home care.  Medicare does not cover homemaker services.  Medicare does not pay for home health aides to give personal care unless you are homebound and are also getting skilled care such as nursing or therapy.

9. 0-M39 Allianz Life TM  Medicaid is a jointly-funded, Federal-State health insurance program for certain low- income and needy people.  You may have to spend down or use up most of your assets on your health care before Medicaid is able to help.  State laws differ about how much money and assets you can keep and be eligible for Medicaid.  Nursing Facilities only reserve a limited number of beds for Medicaid recipients. The facts about Medicaid

10. 0-M39 Allianz Life TM  How does the potential cost of a long term care event affect your wealth management strategy? Significant assets:  Protect your assets Limited assets:  Protect your lifestyle Assets

11. 0-M39 Allianz Life TM  Is your family physically able to help?  Is your family financially able to help?  Is your family emotionally able to help?  Do you want to put the entire burden on your children? Your family

12. 0-M39 Allianz Life TM Three Major Financial Risks OddsCost (deductible) Auto accident1-240 1 $250 - $1,000 Home fire1-1200 2 $500 - $1,000 LTC event1-2 3 $112,238 4 Transferring the risk 1. Life Association News, 1993. 2. Life Association News, 1993. 3. National Academy of Elder Law Attorneys, 1999. 4. Assumes average nursing home cost of $44,895 per year and average stay of 2.5 years.

13. 0-M39 Allianz Life TM Financial strength Allianz Life Insurance Company of North America  Financial strength  A.M. Best Rating: A++*  Standard & Poor’s Rating: AA*  Part of the Allianz Group, the largest insurance group in the world  105 year old U.S. insurer Allianz Life long term care portfolio  The most comprehensive LTC insurance product portfolio to meet a broad range of consumer needs *These ratings reflect the analysts’ assessment of each insurance company’s financial conditions and its ability to meet its obligations to contract holders as of the date of this brochure.