1. Long Term Care Protection Strategies

2. Long Term Care (LTC) Facts
$9.2 Billion dollars in claims paid to roughly 300,000 individuals (source: 2017 Nations LTC)
Majority of LTC claims involve home care services
#1 reason people buy an LTC insurance plan is the fear of outliving their income
Less than 10% of Americans age 50+ own a LTCI policy
LTCI industry is battered by larger than expected claims, poor risk assessments in 1990’s and 2000’s, low lapse rates, and a shrinking number of distributors

3. What is LTC?
Definition: The type of personal care or supervision needed by persons of all ages for an extended period of time
One is unable to perform 2 of 6 specific activities of daily living for an expected period of at least 90 days or requires supervision due to a severe cognitive impairment such as Alzheimer’s or Dementia
Activities of Daily Living are:
Bathing
Continence
Dressing
Eating
Toileting, and
Transferring
Plans are designed to provide a wide range of care giving services

4. Where is LTC received?
Home and Community-based adult daycare centers
Assisted Living Facility
Nursing Home, Hospice Facility, and Alzheimer’s Memory Centers

5. The Cost of LTC?
The Average Cost of Long-Term Care in the United States in 2017:
• $267/day or $8,121/month for a private room in a nursing home
• $3,750/month for care in an assisted living facility (one-bedroom unit)
• $22/hour for a home health aide
Source: Genworth Financial, June 2017
* Private Room in a Nursing home will cost $144,257 in 2027 and $213,537 in 2037 (based on 4% medical inflation projections)
Estimated cost in 20 years based on averages:
• 2.2 years for men = $462,661
• 3.7 years for women = $765,171
• 8 years for Alzheimer’s = $1,708,288

6. Trends That Could Impact LTC Costs
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?

7. Chances of Requiring Care
In one’s lifetime, what is the chance they will require some type of care?
According to the National Long-term 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)
3.9 years is the average length of long term care claim lasting longer than 1 year
4-8 years average life expectancy after Alzheimer’s diagnosis

8. Options for LTC Public Programs (Medicare and Medicaid) Self Funding
Public programs have limitations (e.g., long term care service coverage can be very limited)
Medicare generally covers a nursing home after a hospital stay of at least 3 days
Medicaid does contribute toward long term care, but requires recipients to use their income to pay for care (asset depletion) to qualify
Self Funding
(set aside money from a retirement strategy)
Care can be expensive , which assets will you draw from?
Consider the long term care could last 3+ years (e.g., nursing home)
Transfer some or all of the risk to an insurance option, such as an asset protection product
Private/Family Support
Care can be provided by family members or friends
Who should provide care is a question to consider carefully (e.g., Where do these people live? Do they have the time and ability to provide care?
Consider the physical, financial, and emotion effects of providing care

9. Options for LTC (continued)
Traditional LTC
Specifically designed to pay for long term care
Can be a practical and cost-effective way to help reimburse the expense of qualified LTC services.
Linked Benefits Plans
Combines benefits if life insurance and long term care insurance
Immediately creates a death benefit for your beneficiaries and a pool of benefits to reimburse expenses
Accelerated Benefit Rider for LTC Services
Can provide tax-free reimbursement for covered long term care services
Helps you manage risk and build financial flexibility
Worksite LTC Planning in the Employer Market
Asset-based Long Term Care Annuity
Qualifying for coverage and the premiums paid are directly linked to health and age at the time one applies for coverage. It is best to look into LTCI as early as 40s

10. LTC Top Concerns
For many clients the potential need for long term care and how they will receive and afford care is a top concern, however, only a few have adequately planned for it!
* Have a written strategy for care
* Recognize how the cost of care impact a client’s portfolio and their family

11. Questions Financial Professionals 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?
Government?
LTC insurance?
Self fund?

12. Thank You! Susan Kaarby, LTCP Global Insurance Solutions Group
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