1. Changing Client Solutions for a Changing LTC World 1 Hour

2. LTC Planning – Your Client Can’t ignore It www.nltcb.com - 800.695.8224 Living longer = likely increased need for care Cost of long-term care is increasing  poses a significant risk to retirement portfolio LTC Insurance pays for full range of long-term care services clients may need Advisors should present spectrum of options – Self insure vs. Traditional LTCI vs. Linked Benefit

3. Will it happen to your client? It may not, however……. www.nltcb.com - 800.695.8224 70% of people who reach age 65 will need long- term care at some point in their lives (due to cognitive impairment or deficiency in 2 activities of daily living)* 40% of people receiving long-term care in the U.S. are between the ages 18 and 64** So ask a simple question…… * U.S. Dept. of HHS **AALTCI

4. In Short… www.nltcb.com - 800.695.8224 What has changed…? The Market & Products! What has NOT changed…? The NEED!

5. MARKET CHANGES www.nltcb.com - 800.695.8224 Traditional LTCI

6. Traditional LTCI Marketplace www.nltcb.com - 800.695.8224 Carriers have:  raised premiums  exited the market Consumer affordability concerns – now and during retirement years Consumers inability to qualify Consumers looking for guarantees “Use it or lose it” concerns Marginal LTCI market penetration WHY?

7. CAUTION! www.nltcb.com - 800.695.8224 The Traditional market changes do NOT mean the Traditional LTCI market is no longer viable

8. “Linked Benefit” Marketplace – The Evolution www.nltcb.com - 800.695.8224 What do we mean by “linked benefits”  Life products (or annuities) with LTC riders  Single premium vs. ongoing premium The first wave vs. the next wave  Life with “acceleration” riders LTC vs. Chronic Illness riders Reimbursement vs. Indemnity benefits

9. LINKED BENEFIT POLICIES www.nltcb.com - 800.695.8224 Okay…so how do they work…?

10. Asset-based Reimbursement www.nltcb.com - 800.695.8224 Requires a single initial premium deposit  may be 1035 exchange  Multi-pay MAY be available Leverages the premium deposit into a much larger pool of dollars for LTC expenses Death benefit reduced dollar-for-dollar for each LTC dollar that is reimbursed Money-back guarantee may be available

11. Linked Benefits continued www.nltcb.com - 800.695.8224 Ongoing premium plans  Accelerates the death benefit for “LTC” (or “Chronic Illness”) – max paid is face amount  Favors Life insurance first, with LTC rider  Usually a Universal Life product  Reimbursement, indemnity or cash  Some carriers charge an extra premium, others “discount” the death benefit  Slowing vs. not slowing cash value growth

12. LTC/Chronic Illness Acceleration Riders www.nltcb.com - 800.695.8224 Limits on benefit access  1%, 2% or 4% monthly vs. annual max  IRS “per diem” How is death benefit reduced?  Dollar for dollar vs. “discounted” death benefit  Since no charge up front, must account for time value of early payout  Greater than dollar for dollar reduction

13. Linked Product Target Audience Retirees (or near retirement) with invested assets and have chosen to self-insure the risk of needing long-term care Concerned about paying premiums – and never using benefits Worried about premium increases Value control of assets Can’t see themselves as needing care Already said no to LTCI www.nltcb.com - 800.695.8224

14. So…Which One is “Best?” www.nltcb.com - 800.695.8224 It depends!

15. Pros & Cons - LTCI www.nltcb.com - 800.695.8224 Most comprehensive benefits Availability of tax incentives Partnership asset protection availability Susceptible to rate changes Can I GET it?

16. Pros & Cons - Linked www.nltcb.com - 800.695.8224 Reduces worries re: “use it or lose it” Reduces worries re: premium increases Easier to qualify? Third party ownership potential Ability to change to “short pay” post-issue No/limited tax incentives on premiums  BUT remember income tax free death benefit Difference between “Long Term Care” and “Chronic Illness”

17. What Are Questions to Consider? www.nltcb.com - 800.695.8224 Have you already decided against LTCI? Can you qualify for LTCI? Do you feel an LTC event could happen? Do you prefer to “self-insure” the LTC risk? CAN you self-insure the risk? Are you worried about LTCI rate increases? How old are you now? Do you own a business?

18. Conclusion www.nltcb.com - 800.695.8224 There is NOT one “best” solution! Ask your prospects the right questions The ultimate question:  “What’s the Alternative?”

19. THANK YOU! www.nltcb.com - 800.695.8224 Questions?