1. Thank you for joining us
Thank you for joining us. The topic that we are discussing today is long term care and protecting your assets from the rising cost of care. We are going to present some facts regarding Long Term Care and give you some options of what you can do to protect your assets. Let’s get started.

2. 70% FACT: 70% of people over age 65 will need long-term care1
Fact that over 70% of people are over the age of 65 and will need some kind of long- term care in their lifetime. When we talk about long- term care what is the first thought that comes to your mind? Some people believe that long term care is synonymous with nursing home care. When in fact, Home Care is also considered LTC, which is included in that 70%. Whether you are part of the 70% that will require LTC or not, it is prudent to be aware of the available options to protect your nest egg. 1

3. Do you know someone who is or has been in need of some form of long-term care?
Are you prepared to fund it? Do you know someone who is or has been in need of some form of long- term care? There is a chance that if you do know someone or have had an experience with someone that has needed long- term care, you have also experienced the financial need that accompanies this form of care.

4. And if you do need care, how will you pay for it?
Spouse
Adult children
Family dynamics
Finances
And if you do need care, how will you pay for it?
You may never need the care, but if you do how will that affect your family? Specifically how will that affect your spouse? If you’re trying to do this in your home for example, and it is a husband and wife situation. The husband is having some kind of long- term care event. What if my husband falls? What if I have to bathe him? Can I pick him up and put him in the bath tub? Can I help put him in the car? ( Insert personal story) What about family dynamics? Families arguing about who is going to take care of mom and dad? Who are mom and dad going to live with? What about the finances who is going to pay for all the expenses? Do mom and dad have enough money to pay for this or do I have to? Do they have long term- care insurance? Some of these concerns may come into play when looking at long- term care and the big picture. If you do need the care where is the money going to come from? If this happened to you, say tomorrow something could happen and you need some form of long- term care. What account would you write that check from? Your checking account, savings account do you have a CD that is earmarked for this? Do you have enough money to pay for all of it?

5. Government Self Fund LTC Insurance
What are your options? There are three main options we can look at,; government funded programs, or you can self fund from your own assets, or you can buy some form of Long Term Care insurance policy.

6. Medicaid Spend down assets Keep your house and your car
Can only have $2000 in assets
Lets discuss the first option Medicaid, what do you have to do to qualify? Medicaid allows you to keep your house and your car and you can have $2,000 dollars in assets (varies by state). In the State of Michigan this dollar amount is true. Medicaid has a set of guidelines and rules that a LTC facility must follow. This would include your bed, type of room, and the type of care that they are able to provide.

7. Self Fund
The average cost of long-term care in the United States in 2014:
$223/day or $6,691/month for a semi-private room in a nursing home
$243/day or $7,300/month for a private room in a nursing home
$3,500/month for care in an assisted living facility (one-bedroom unit)
$20/hour for a home health aide x 24 hours/day = $480/day = $175,200
$87,600 per year for private room in 2014
If medical inflation 3.5%:
In 10 years with inflation = $123,568 per year
In 20 years with inflation = $174,305 per year
*Source: Genworth Financial, April 22, 2015
Due to Inflation, expectations are that the average cost of care in the United States will continue to increase. In addition, there are several other factors that could impact the cost of care, including the aging Baby Boomer population, advances in medical technology, government programs and family dynamics.
Here are some statistics you need to know about the average cost of long- term care in the United States in On average it cost about $223/day or $6,691/ month for a semi- private room in a nursing home. About $243/day or $7,300 month for a private room in a nursing home facility. For a one- bedroom unit in an assisted living facility the cost would be about $3,500/month. The average cost for home care is about $20/hour for a home health aide. 24 hour care which at about $20/hour X 24 hours/day equals $480/day or $175,200/year. Now we will discuss private rooms, which are about $87,600/year in That is now, if you need it in 10 years with medical inflations at 3.5% it will cost you about $123,568/year. If you need it in 20 years it could cost you about $174,305/year. These are real numbers, self funding is an option and if the average stay is 2 or 3 years you can take these numbers and multiply them to get the average cost. However what if you have to stay for much longer? Ronald Reagan needed some type of long term care for 17 years for his Alzheimer's.

8. Traditional Long-Term Care
Possibility that you may not use it:
No benefit if you don’t use it for LTC
Past Premium increase:
Calendar year 2015 = 15.53%
Calendar year 2010 = 18.87%
Calendar year 2005 = 22.06%
Source: Iowa Division of Insurance 12/3/2015
One of your other options is traditional long-term care, this is traditional long-term care insurance. A concern some people have with traditional LTC, is it is a use it or loose it proposition. Which means if you do not use the long-term care itself then you won’t get back the premiums that you paid into the policy. This is a viable option for people, and may benefit many of the people in this room. Premiums can increase on these type of policies. If we look at this chart, we can see that in 2005 premiums increased about 22.06%, calendar year 2010 the premiums increased about 18.87% and for calendar year 2015 the premiums increased about 15.53%.

9. Did you buy? If not, why not?
So has anyone talked to you about purchasing a LTC policy? Show of hands? Anyone…. Did you buy it? Those of you who did tell me about? Do you still own it? How was the experience? Those of you who did not raise your hands why did you not buy?

10. Some people have misconceptions about money that is earmarked for LTC expenses. LTC does not have to be a use it or lose it proposition. If you have identified the source of funds that would be paying for LTC, and you chose an Asset-Based type of LTC policy, then you don’t lose control over the asset. ABLTC is an alternative to traditional long-term care, in a few ways. These policies are LTC coverage that are attached to an annuity or life insurance policy. Some of these policies provide not only LTC coverage but also a death benefit with a full or partial return of premium, meaning you could still get access to your money if you really needed it.

11. …but now leveraged 2-5 times for LTC expenses
Death benefit
Available as lump sum should you change your mind
Lets say that you have $100,000 sitting in a bank CD that you are saving in case you need LTC. Assuming average care costs for a semi private room, this money could last about 2-3 years.
If, instead, you reposition that $100,000 into an Asset Based LTC product; you have the potential to leverage that money into a 200k-500k Tax Free LTC benefit. Some of these policies offer Return of Premium(meaning you can get your money back if you change your mind or need access to all your money) and a tax free death benefit.

12. Changing the way we view LTC Insurance
A cost-effective way to protect yourself and your loved ones from the expense of long-term care
Provide a benefit if you didn’t use the LTC
The ability to change your mind in the future
Not to be a burden to loved ones
ABLTC is changing the way we view LTC insurance. It’s not traditional LTC insurance. You are now leveraging your money in order to pay for these LTC expenses. It is a cost effective way to protect yourself and your loved ones from the expense of long – term care. It also provides a benefit if you do not use the LTC. Someone will receive the money:
It’s either going to be The Long-Term Care or Home Care company in the instance that you use the coverage. It could be your beneficiaries if you pass away, or you could receive the money while you are living if you change your mind or need the money. There is a 100% chance that one of these scenarios is going to happen. Someone is going to get the money!
You are planning it now so that you don’t have this issue if the situation might arise? That could help not being burden to loved ones. (Insert personal story)

13. Typical portfolio assets:
Cash Value
Typical portfolio assets:
Aggressive - assets positioned for significant growth with the acceptance of the risk of loss
of principal
Moderate - assets positioned for some growth with the acceptance of some downside risk
Conservative - assets positioned for conservation of principal— often with guarantees
*One America Asset Care Products
Death Benefit
Moderate
Long-term Care
Aggressive
$125k
Conservative
$250k
Lifetime LTC
(Unlimited)
The concept of asset-based long-term care lies in its name. Instead of using income to provide long-term care insurance benefits, this approach reallocates existing assets to pay a single premium and provide LTC benefits.
Of course annual pay options are available, but some clients prefer the ability to repurpose an asset already ear marked for a health care need, leverage that premium into LTC benefits, and avoid “another bill” to pay.
This is how Asset Based LTC works if we look at a typical portfolio of assets. The portfolio is split into aggressive, moderate, and conservative investments. Carve out part of the total portfolio, for example purposes say $125k. This is a life insurance policy with a Long- term care component attached to it. Qualifying for a Life Insurance Policy is a key component to this strategy. If you are unable to qualify for life insurance, there are other strategies that also offer certain forms of LTC benefits that we can discuss individually. This specifically is a life insurance policy with a LTC component so if something should happen to you and you should pass away, $250K would be paid out to your beneficiary as a tax free death benefit. That $250k is also used in combination as a LTC benefit. If something should happen and you needed LTC you would have $250K in coverage to pay for qualifying LTC expenses. An unlimited lifetime LTC benefit is also available as optional coverage on some of these policies.
*One America Asset Care Products

14. Annual pay RMDs Annuities CDs Money markets and savings accounts
Here are few ways to fund these types of policies.

15. New Opportunities for Funding Long-Term Care Insurance (LTCI)
The Pension Protection Act of 2006 provides new opportunities that allow annuity owners to use their non-qualified annuity to pay long-term care insurance premiums tax-free.
Long-Term Care Insurance Premiums from Non-Qualified Annuity as a Tax-Free Exchange
Deferred Annuity*
Partial 1035 exchanges from a new or existing non-qualified annuity to pay for tax-qualified long-term care insurance premiums are tax-free to the annuity owner. Additionally, gain and basis within the annuity will be reduced pro rata.
Immediate Annuity
Income from a non-qualified SPIA that is assigned to pay tax-qualified long-term care insurance premiums is tax-free, regardless of how much of the income is gain or basis. These payments are considered a partial assignment of the SPIA contract in a 1035 exchange and will be reported as having a taxable amount of $0.00.
One of the opportunities that the Pension Protection Act provides is that it allows non-qualified annuities to be transferred via a 1035 exchange into another annuity that has a long-term care component. Any gains from transferred non-qualified annuities that are used to pay for qualifying LTC expenses are considered tax free. This is a unique provision that this Act provides. Therefore, if you have any non-qualified annuities that currently have gains and have earmarked them for LTC expenses, you may want to consider taking advantage of this provision.

16. Thank you so much for your time today
Thank you so much for your time today. We hope that you gained some perspective on LTC and the options that are available to you. There may be some of you in this room who are thinking that although the information was valuable, I am healthy as an Ox, and I saw your statistic up there about the 70%, but I feel like I am in the 30% that won’t need LTC. You may be right! Next Slide.

17. You do not need long-term services at this time.
I would say to you congratulations you do not need long- term care services at this time, the balloons go off! This is fantastic I have learned a lot today but I do not think I need until….. Next slide..

18. …and will need home health aide and homemaker services for 3 years at an expense of $43,800/year.
6hrs/day at $20/hour
*Source: Genworth Financial, April 22, 2015
This happens: You fall and break a hip and you will need home health aide and homemaker services for 3 years at an expense of $43,800/year. Was that planned? No it wasn’t planned you just fell.

19. ...and you need help with everyday tasks, such as bathing, dressing and doing laundry, for 6 years at an expense of $29,200/year.
4hrs/day at $20.00/ hour
*Source: Genworth Financial, April 22, 2015
Age is starting to catch up with you and you need help with everyday tasks, such as bathing, dressing, and doing laundry, for 6 years at an expense of $29,200/year. That is $175,200 over a 6 year period that you did not plan for, but that is just what happens.

20. …and will need 5 years of long-term care services, including skilled nursing care, medical equipment and personal care aides at an annual expense of $87,600/year.
*Source: Genworth Financial, April 22, 2015
You have been diagnosed with cancer and will need 5 years of long- term care service, including skilled nursing care, medical equipment and personal care aides at an annual expense of $87,600/year. Over a 5 year period that is $438,000 you didn’t plan for. This can happen to any of us.

21. …and will need to move out of your home into an assisted living facility that provides care. This will cost $42,000/year and you will be there for 6 years.
*Source: Genworth Financial, April 22, 2015
You can no longer live on your own and will need to move out of your home into an assisted living facility that provides care. This will cost $42,000/year and you will be there for 6 years. That is $252,000 over a 6 year period.

22. …and need help with mobility and help maintaining your home
…and need help with mobility and help maintaining your home. You will need 7 years of long-term care services at an expense of $29,200/year.
4hrs./day at $20.00/hr.
*Source: Genworth Financial, April 22, 2015
You have suffered a stroke and need help with mobility and help maintaining your home. You will need 7 years of long- term care services at an expense of $29,000/year.