1. Asset Protection Strategies
LTCI, Hybrid Life, Impaired Risk SPIA, and Life Xchange

2. Long term care is very costly
The need for LTC poses a significant financial risk
Many people mistakenly believe they are covered
Medicare does not cover long term care
Americans are living longer than ever before
The 2017 median cost:
Home-health aide for an eight-hour day is more than $48,000 a year
Assisted Living Facility is $46,000 per year
Nursing Home care in a facility with a private room has a median cost of over $96,000 a year1
1Genworth 2017 Cost of Care Survey

3. Very Few Americans are prepared
In 2010, 12,000,000 Americans needed LTC
By 2050, more than 27,000,000 will need LTC
Over the next two decades, an unsustainable demand for extended care will emerge
Challenges:
Aging population
Increasingly limited personal resources
Growing strains on federal, state and family budgets
Source: Bipartisan Policy Center (2014)
America’s LTC Crisis: Challenges in Financing and Delivery

4. Average Cost of Care: $87,600 per year for private room in 2014
If medical inflation 3.5%
By 2025 with inflation + $123,568
By 2035 with inflation = $174,305
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?
Source: Genworth Financial, April 22, 2015

5. 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 (avg. 3.7 years) than do men (avg. 2.2 years)
Source: U.S. Department Source: U.S. Department of Health and Human Services, 4/12/12

6. Projected cost for extended care in 2032:
According to The National Long-Term Care Clearinghouse:
Projected cost for extended care in 2032:
Men: $ 174,305 per year
Average 2.2 year extended care = $ 383,471
Women: $ 174,305 per year
Average 3.7 year extended care = $ 644,928
Alzheimer’s: $ 174,305 per year
Average 8 years for Alzheimer’s= $1,394,440
Source: U.S. Department Source: U.S. Department of Health and Human Services, 4/12/12

7. Four Questions to Ask Your Loved Ones
What are your concerns?
What are your housing preferences if your situation changes?
What arrangements have you already made?
Are you concerned about running out of money while it is still needed?
Four Questions to Ask Your Loved Ones

8. Medicare won’t pay all the bills
What is the estimated average out of pocket medical costs for a 65-year-old couple retiring in 2015?
$245,000*
… and even more if chronic illness care is needed
Health care expenses can be high. Estimates are that out-of-pocket medical expenses for an average 65-year-old couple retiring in 2015 will be $245,000, and even more if chronic illness care is needed.
*Health Care Costs for Couples in Retirement Rise to an Estimated $245,000. Fidelity Investments. October 8, Based on a hypothetical 65-year-old couple with average life expectancies of 85 for a male and 87 for a female, with costs in 2015 dollars.

9. 87 89 65 … Life expectancy For healthy men and women who are now age
Men: life expectancy is
65 … 89
Women: life expectancy is
Life expectancy is higher than many people realize. For healthy men and women who are now age 65, life expectancy is 87 and 89, respectively.
2015 Valuation Basic Table, Nonsmoker Select and Ultimate mortality rates, Age Last Birthday Basis. American Academy of Actuaries and Society of Actuaries.

10. So what are the solutions to this problem?

11. Some Solutions Include:
Self Insurance
Welfare (Medicaid)
Long Term Care Insurance
Hybrid or Linked Benefits with Accelerated Death Benefits (ADBs)
Life Settlements
Home Equity Conversion Mortgages

12. Traditional Long Term Care Insurance
Next generation of LTCI
3% compound inflation
5% inflation was the choice 20 years ago
5-10 year benefit periods
Unlimited benefit options were popular 20 years ago
Quick issue worksite products
New 10-pay option
Short Term Care
For less than 365 days
Traditional Long Term Care Insurance

13. Traditional Long Term Care
10-pay premium option
Single Pay
Return of Premium
Great for Corporate sales!

14. Price (Affordability) Opens the Market
Consumer Price Tolerance for LTCI
$600/year
$900/year
$1,200/year
$1,800/year
$2,400/year
>$2,400/year 7%
15%
17%
35%
14%
12%
Market
Opportunity
74%
Consumer research has shown that if long term care insurance cost $1,200 annually per person, the number of sales could potentially be 10 times today’s sales with 5 times the revenue. This is leaving most Americans without coverage for a LTC event.
For generations people have thought of long term care insurance as something that pays for nursing home costs – which of course it can. But there’s a better way to think about long term care insurance: as “living insurance” that helps you maintain your independence and quality of life, and preserves your relationships with the people you care most about.
We are broadening our solutions to make Long Term Care insurance more accessible to consumers. Considering only 8%* of consumers have long term care insurance today, the opportunity is significant.
* Source: "Long-term care: What are the issues?" Health Policy Snapshot, Issue Brief, Robert Wood Johnson Foundation, February 2014.
There is a significant opportunity in the long term care insurance market if we shift our sales efforts toward a $1,200 price point.
Source: Genworth Research, Flex Appeal Sales Optimization Study, March 2014
Q18_V. What is the maximum amount you would consider paying for your Long Term Care Insurance coverage?

15. Using Annuities for Asset Protection
Pension Protection Act

16. Pension Protection Act
Existing annuity
(funded with after-tax dollars)
$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
Withdrawal
HIPAA qualified PPA
eligible annuity
Beginning January 1, 2010, income tax-free as a reduction of cost basis

17. LTC Planning for those that forgot about Planning for LTC.
For Producer Use Only.
Not To be Reproduced or Shown to the Public.
163725Y 01/01/16
©2016 Genworth Financial, Inc. All rights reserved.

18. IncomeAssuranceSM Immediate Need Annuity
INTRODUCING
IncomeAssuranceSM Immediate Need Annuity
Guaranteed source of monthly income to use for any purpose including:
Living expenses, Medical expenses, cost of extended care
Income for life
Monthly income guaranteed for as long as the annuitant lives
You now have access to a financial professional who can discuss if an IncomeAssurance Immediate Need Annuity is suitable to provide a stream of income that can help pay for care, or anything you wish, regardless of how long care is needed. There are no claims to file and no on-going health evaluations.
An annuity lets you convert the money you have saved into a guaranteed, monthly income that is paid for the rest of your life — no matter how long you live. Life income provides guaranteed monthly payments during the lifetime of the care recipient, no matter how long he or she lives. The IncomeAssurance Immediate Need Annuity provides monthly income payments that will stop upon the death of the care recipient, therefore the total amount of payments may be significantly less than the premium paid for the annuity. There is no minimum amount of guaranteed income payments.
Understanding your income options begins with understanding your needs. Adapting to meet life’s unexpected turns by creating an immediate, guaranteed lifetime income that you can use however you want is important. While it may feel that now is too late to plan, it really doesn’t have to be.
Because everyone’s situation is different, it is important to find a guaranteed solution that is flexible enough to be personalized to your needs. Whatever your situation – whether living in your home or in an assisted living community, or receiving care in another type of facility — an IncomeAssurance Immediate Need Annuity can help provide the income certainty you need.
Adverse health may benefit client
Medical underwriting usually allows greater benefits than traditional, non-underwritten SPIAs
Life income provides guaranteed monthly payments during the lifetime of the annuitant, no matter how long he or she lives. Monthly income payments will stop upon the death of the annuitant and, therefore, the total amount of payments may be significantly less than the premium paid for the annuity. There is no minimum amount of guaranteed income payments.

19. Designed for people: Not designed for people:
Who are concerned about outliving their assets
Who would benefit from guaranteed income they can’t outlive
Who are less healthy and could benefit from a larger monthly income payment than they would likely receive from a traditional non-medically underwritten immediate annuity
Not designed for people:
Who are in good health and have other lifetime income options that may provide a better income alternative
Who do not need a guaranteed lifetime stream of income
Who are unwilling to risk losing their remaining premium if they die before payouts exceed the initial premium
Income Assurance Immediate Need Annuity may be right for those:
Who are concerned about outliving their assets
Who need income they cannot outlive
Those who could benefit from a higher monthly income than is available with a traditional immediate annuity
Who may not qualify for long term care insurance because of their age and/or health
It is not designed for people who
Are in good health
Have other lifetime income options that may provide a better income alternative
Do not need to have a guaranteed lifetime income
Are not willing to risk losing their remaining premium should they die before payouts exceed the initial premium

20. Income Assurance Immediate Need Annuity
genworth.com/incomeassurance
Want to complete this training and begin offering this solution?
Complete the brief Knowledge Assessment.
With an Income Assurance Immediate Need Annuity, care recipients and their families now have access to an underwritten product that can provide a lifetime stream of monthly income payments.
Visit genworth.com/incomeassurance to learn more about this solution.
Before you do, continue on to the brief knowledge assessment to complete this training and begin offering this solution.

21. Life Settlements
1% commission to the broker on face amount of the policy
No new license required
Refer to Life Xchange presentation

22. Hybrid Life Accelerated death benefit for qualified LTC expenses
Single pay, limited pay or annual pay