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Your Asset-Based LTC Opportunity
Welcome and greeting Intro OneAmerica. Presented by: Keith Bercun, Regional Sales `Director CLTC For company and recruiting use only. Not for public distribution.
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Average Cost of Care $87,600 per year for private room in 2014
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 • $204/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 • Source: Genworth Financial, April 22, 2015 $87,600 per year for private room in 2014 - If medical inflation 3.5% In 10 yrs with inflation = $123,568 per year In 20 yrs with inflation = $174,305 per year Trends that could impact costs of Long-term Care: Baby Boomers – number of people needing care at same time Medical Technology – Life expectancy increasing - costs more Family Dynamics – Who is providing care now? Government – What programs will be available? Who will qualify? The average cost of care in the United States is considerable, and with inflation, expectations are it 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. For company and recruiting use only. Not for public distribution.
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Estimated cost in 20 yrs based on averages:
-- $ 174,305 per year @ 2.2 yrs for men = $ 383,471 -- $ 174,305 per year @ 3.7 yrs for women = $ 644,928 -- $ 174,305 per year @ 8 yrs for Alzheimer’s= $1,394,440 According to The National Long-Term Care Clearinghouse: About 70% of individuals over age 65 will require at least some type of long-term care service during their lifetime Over 40% will need care in a nursing home for some period of time Women need care for longer (on avg. 3.7 years) than do men (on avg. 2.2 years) Source: U.S. Department Source: U.S. Department of Health and Human Services, 4/12/12 The chances of needing long-term care is something your clients should not ignore. According to the federal government, around 70% of individuals over the age of 65 will require some type of LTC. 40% of those individuals will require care in a nursing home, and the risk is greater of for women than men.
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Two Questions Every Financial Professional Should ask their clients:
1. You may never need care, but if you did, how will that affect your family? Spouse? Adult children? Family Dynamics? Finances? 2. And…if you did need care, how will you pay for it? Two simple questions you can ask your clients are: “You may never need care, but if you did, how will that affect your family?” and “ If you did need care, how will you pay for it?’ Simple phrases like this can help properly frame the conversation. Government? LTC insurance? Self fund? For company and recruiting use only. Not for public distribution.
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Concept of Asset-based LTC with Life Insurance *(example)
Cash Value Aggressive Moderate Death Benefit Long-term Care $125k Conservative $250k The concept of asset-based long-term care lies in its name. Instead of using income to purchase long-term care insurance, our approach reallocates existing assets to pay a single premium and provide LTC benefits. Of course annual pay options are also available, but most 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. 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 Lifetime LTC (Unlimited)
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Portfolio Protection! Not only is this portfolio protection for the client, it’s portfolio protection for a producer! If an agent has a producer clientele, and over the next years their clients begin to withdraw hundreds of thousands of dollars out of accounts that are being managed…. …what happens to their business? For company and recruiting use only. Not for public distribution.
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Care Solutions Suite Asset Care® Whole life insurance with LTC benefits Asset Care I (Single Premium) Cash or cash equivalents Asset Care II (Single Premium) Existing nonqualified annuities via 1035 exchange Asset Care III (Single Premium) Qualified money via direct rollover Asset Care IV (Annual Premium)10pay up to 20pay or whole life pay Annuity Care ® Single premium annuity with LTC benefits Annuity Care Cash, qualified money, existing nonqualified annuities exchange Annuity Care II Cash or existing nonqualified annuities via 1035 exchange Indexed Annuity Care Cash, qualified money, existing non-qualified annuities – 1035 exchange Legacy Care ® Single premium deferred annuity Designed for the retiree market Immediate Care ® Immediate Lifetime annuity (SPIA) Designed to help fund LTC or provide retirement income The State Life Insurance Company offers one of the most robust and complete asset-based long-term care product suites. Let’s look at a brief overview of the Care Solutions suite and how each solution is funded.
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Asset Care I-IV Whole Life Insurance- Guarantee 4% IR Joint Equal Age
Any Insurable Interest Individual or Joint Chassis Single Premium Will cover 2 Lives (Patented)
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Asset-Care I example: Joint contract 64 & 64
Life Insurance policy Continuation of Benefits Rider is optional $850 / year Premiums guaranteed! $250,000 50 months = $500,000 $125,000 $250,000 50 months or LIFETIME $5,000 Per person $1,200 / year Premiums guaranteed! Highlights: Ages 40-80 Single or patented joint life option Guaranteed return of premium on 50 month option Guaranteed cash value growth Optional lifetime coverage available with premium guaranteed to never increase Funding: Cash, CDs, savings, brokerage accounts, 1035 Life Cash Value Asset-Care is our whole life insurance product with LTC benefits. It provides access to the death benefit for qualifying LTC expenses, and an optional extension of benefits should your clients fear an extended care need. For company and recruiting use only. Not for public distribution. For company and recruiting use only. Not for public distribution.
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Concept and Acceleration of Death Benefit Options
Life Insurance policy Continuation of Benefits Rider is optional 50 months 50 months Lifetime 2% of death benefit 33 months 33 months Lifetime 3% of death benefit 25 months 25 months Asset-Care is our whole life insurance product with LTC benefits. It provides access to the death benefit for qualifying LTC expenses, and an optional extension of benefits should your clients fear an extended care need. Lifetime 4% of death benefit For company and recruiting use only. Not for public distribution. For company and recruiting use only. Not for public distribution.
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For company and recruiting use only. Not for public distribution.
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DID YOU KNOW The COB rider can be paid with an HSA
The COB rider can be paid by a Corp and act as a 100% Tax deduction The COB rider has built in Waiver of Premium There is a 1 year Guarantee ROP on Single Pay of COB rider
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Asset-Care III example: Qualified money
$117,000 $125,000 Asset Care IRA $250,000 $250,000 50 months = $500,000 $8,000 50 months or LIFETIME Annual Taxable withdrawal 50 mos $5,000 Per person $133,000 Additional life insurance with LTC benefits Highlights: Ages: 59½ -80 Patented joint life option or single life Guaranteed return of premium on 50 month option Guaranteed cash value growth Optional lifetime coverage available with premium guaranteed to never increase Funding: 401k, IRA, 403b, qualified monies Asset-Care is our whole life insurance product with LTC benefits. It provides access to the death benefit for qualifying LTC expenses, and an optional extension of benefits should your clients fear an extended care need. For company and recruiting use only. Not for public distribution. For company and recruiting use only. Not for public distribution.
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DID YOU KNOW With ACIII we can write a policy < 59 1/2
The COB can be paid from the 401K/IRA using a SPIA as the funding source LTC Withdrawals can be made from the life policy first and then the Annuity upon request.
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Asset-Care IV example: Annual Pay Joint Contract 55 & 55
Life Insurance policy Continuation of Benefits Rider is optional $525 / year Premiums guaranteed! $100,000 $2,040 Annual premium 25 months = $200,000 $100,000 25 months or LIFETIME $4,000 Per person $1,150 / year Premiums guaranteed! Highlights: Ages (rider available at 35 with exception) Single or patented joint life option Guaranteed cash value growth 10 Pay up to 20 Pay or Whole Life pay. Paid annual, semi-annual, quarterly, or monthly Optional lifetime coverage available with premium guaranteed to never increase Funding: Cash, Pension Income, Annuitization Income, Earned Income, RMD Asset-Care is our whole life insurance product with LTC benefits. It provides access to the death benefit for qualifying LTC expenses, and an optional extension of benefits should your clients fear an extended care need. For company and recruiting use only. Not for public distribution. For company and recruiting use only. Not for public distribution.
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DID YOU KNOW You can fund the Base policy and COB using 1035 $$$ from an existing life policy When on claim your premiums are reduced proportionately
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Care Solutions Portfolio
Asset Care® Whole life insurance with LTC benefits Asset Care I (Single Premium) Cash or cash equivalents Asset Care II (Single Premium) Existing nonqualified annuities via 1035 exchange Asset Care III (Single Premium) Qualified money via direct rollover Asset Care IV (Annual Premium)10pay up to 20pay or whole life pay Annuity Care ® Single premium annuity with LTC benefits Annuity Care Cash, qualified money, existing nonqualified annuities exchange Annuity Care II Cash or existing nonqualified annuities via 1035 exchange Indexed Annuity Care Cash, qualified money, existing non-qualified annuities – 1035 exchange Legacy Care ® Single premium deferred annuity Designed for the retiree market Immediate Care ® Immediate Lifetime annuity (SPIA) Designed to help fund LTC or provide retirement income The State Life Insurance Company offers one of the most robust and complete asset-based long-term care insurance portfolios. Let’s look at a brief overview of the Care Solutions portfolio and how each solution is funded.
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Annuities According to 2013 Gallop survey of Non-Qualified Annuity owners: 79% intend to use their annuity as a financial resource to avoid being a financial burden on their children 73% intend to use their annuity as an emergency fund in the case of a catastrophic illness or for nursing home care Some research even indicates that annuity owners purchased their annuity with unexpected medical and health care costs in mind. For company and recruiting use only. Not for public distribution.
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Pension Protection Act
Existing annuity (funded with after-tax dollars) Pension Protection Act $50,000 basis + $100,000 gain = $150,000 cash value Taxes owed on gain which is withdrawn first Withdrawal 1035 Exchange Long-term care expenses $150,000 Annuity-based asset-based LTC products are also available and are eligible for the tax advantages of the Pension Protection Act. We offer two approaches: Annuity Care and Annuity Care II. Withdrawal HIPAA qualified PPA eligible annuity Beginning January 1,2010, income tax-free as a reduction of cost basis Numeric examples are hypothetical and were used for educational purposes only. For company and recruiting use only. Not for public distribution. Not FDIC Insured-May Lose Value-Not Bank Guaranteed –For company and recruiting use only - Not for Public Distribution
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Annuity Care I & II SPDA- Current rates 1.65%/Cash and 2.85%/LTC
Joint Equal Age Individual or Joint Chassis Must be Spouses Single Premium Will cover 2 Lives PPA eligible HIPPA qualified
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Annuity Care 81 Female $ 125,000 in Non-Qualified Annuity
Doesn’t need for income Minimum 3% rate guarantee Annuity Care $125,000 COB rider is optional Annuity 36 Months 36 Months Lifetime $102,500 $22,500 $36,000 per year, tax-free benefits – for Lifetime! Highlights: ages 50-85 Withdrawals for LTC expenses are federal income tax-free (non-qualified money only) Funding sources: cash equivalents, non-qualified annuities via 1035 exchange, qualified money Optional lifetime coverage available with premium guaranteed to never increase Base annuity only – NO teleinterview Continuation of Benefits rider requires teleinterview With Annuity Care, the base annuity and continuation of benefits are purchased separately. The continuation of benefits is optional. For company and recruiting use only. Not for public distribution.
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DID YOU KNOW We will insure up to age 87 if no COB rider, no exception needed!
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Annuity Care II COB rider is INCLUDED Annuity 36 months 2.5 x
24 Months (single life) 30 months (joint life) 72 months 4 x 108 months 5.5 x Monthly LTC charges Highlights: ages 40-80 Withdrawals for LTC expenses are federal income tax-free Internal withdrawals to pay for Continuation Of Benefits rider are federal income tax-free Benefits paid from Continuation Of Benefits rider are federal income tax-free Funding sources: cash equivalents and non-qualified annuities via 1035 exchange Requires teleinterview only With Annuity Care II, The continuation of benefits is built-in. Annuity Care II cannot be purchased without the continuation of benefits. Rather than paying for the continuation of benefits out-of-pocket as with Annuity Care, Annuity Care II’s continuation of benefits is funded by a monthly charge deducted from the annuity values. For company and recruiting use only. Not for public distribution.
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Single Pay Annuity / Single Life – 8 yr. LTC
Base Policy – First 24mos. Of LTC COB Rider – Next 72 Months For company and recruiting use only. Not for public distribution.
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For company and recruiting use only. Not for public distribution.
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For company and recruiting use only. Not for public distribution.
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Indexed Annuity Care COB rider is optional 2x Fixed-indexed Annuity 3x
24 months, single 30 months, joint 2x Fixed-indexed Annuity 24 months, single 30 months, joint 48 months, single 60 months, joint 3x LIFETIME Highlights: Ages 40-85 Fixed-indexed annuity allows for upside growth potential by linking to the S&P 500®, with protection from down-side risk Withdrawals for LTC expenses are federal income tax-free (non-qualified money only) Benefits paid from Continuation Of Benefits rider are federal income tax-free Funding sources: cash equivalents, non-qualified annuities via 1035 exchange, qualified money Optional lifetime coverage available with premium guaranteed to never increase Base annuity only – NO teleinterview Continuation of Benefits rider requires teleinterview only With Annuity Care, the base annuity and continuation of benefits are purchased separately. The continuation of benefits is optional. For company and recruiting use only. Not for public distribution.
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How the LTC benefit balance works
Contract year Account value multiplier Adjusted net single premium factor 1 1.01 1.00 2 1.02 3 1.03 4 1.04 5 1.05 6 1.06 7 1.07 8 1.08 9 1.09 10 1.10 11 1.11 1.15 12 1.12 1.20 13 1.13 1.25 14 1.14 1.30 15 1.35 16 1.40 17 1.45 18 1.50 19 20+ The LTC benefit balance is the greater of: The account value x the account value multiplier The net single premium x the adjusted net single premium factor Example: Mrs. Smith purchased an Indexed Annuity Care contract with a $150,000 single premium; she has never taken a partial withdrawal. By contract year 15, when they first need and are eligible for LTC withdrawals, their account value has grown to $203,832. Their LTC benefit balance is the greater of: $203,832 x 1.15 = $234,407 $150,000 x 1.35 = $202,500 The LTC benefit balance is $234,407. Please review the contract and outline of coverage for complete details. For company and recruiting use only. Not for public distribution.
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Care Solutions Portfolio
Asset Care® Whole life insurance with LTC benefits Asset Care I (Single Premium) Cash or cash equivalents Asset Care II (Single Premium) Existing nonqualified annuities via 1035 exchange Asset Care III (Single Premium) Qualified money via direct rollover Asset Care IV (Annual Premium)10pay up to 20pay or whole life pay Annuity Care ® Single premium annuity with LTC benefits Annuity Care Cash, qualified money, existing nonqualified annuities exchange Annuity Care II Cash or existing nonqualified annuities via 1035 exchange Indexed Annuity Care Cash, qualified money, existing non-qualified annuities – 1035 exchange Legacy Care ® Single premium deferred annuity Designed for the retiree market Immediate Care ® Immediate Lifetime annuity (SPIA) Designed to help fund LTC or provide retirement income The State Life Insurance Company offers one of the most robust and complete asset-based long-term care insurance portfolios. Let’s look at a brief overview of the Care Solutions portfolio and how each solution is funded.
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Let’s get started Immediately text to: 89800 “Insurance”
Thank you for attending. Get started by contacting the Sales Desk, or your local wholesaling team. For company and recruiting use only. Not for public distribution.
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