1. Using Reverse Mortgages in a Long-Term Care Plan Bill Comfort, CLTC Comfort Assurance Group Michael Banner LoanWell America American CE Institue 3/31/2011For Professional, Broker/Dealer Use Only

2. Who Is Eligible?  Clients over age 62  Principal residences  Single Family Homes up to 4 units  Clients with Existing Mortgages 3/31/2011For Professional, Broker/Dealer Use Only

3. Flexible Payout Options  Lump sum, all at once  Line of Credit  Payment for Life (Tenure)  Term payments  Combination of the above 3/31/2011For Professional, Broker/Dealer Use Only

4. What Are The Borrower’s Responsibilities?  Keep taxes current  Homeowner’s Insurance  Maintain the property 3/31/2011For Professional, Broker/Dealer Use Only

5. Myths vs. Reality 1 - Who Retains Title to the Home? The clients (s) always retain the title to the home 2 - Remaining Equity Goes? To the heirs, estate or where ever directed 3 - Loan Repayment? The reverse mortgage is a non recourse residential loan 3/31/2011For Professional, Broker/Dealer Use Only

6. Closing Costs 2010 Saw the Retooling of the Reverse Mortgage: April 2010 – closing costs were decreased greatly thus removing the #1 obstacle advisors had with the product Oct 2010 – The Introduction of a totally New Reverse Mortgage – The HECM Saver- Designed for the upper income borrower 3/31/2011For Professional, Broker/Dealer Use Only

7. Cross Selling * Contrary to what most believe Cross Selling IS NOT against the law! (Never has been) Section 2122 of HERA clearly states that safeguards and firewalls must be in place to protect the seniors But they do not define those safeguards. We are those safe guards! 3/31/2011For Professional, Broker/Dealer Use Only

8. Example - $625,500 Market Value Mr. and Mrs. Borrower, Ages 68 and 70 Principal Limit: $625,500 Loan Amount: $ 293,985 Upfront Cash Draw: $25,000 CASH $125,000 to payoff mortgage Monthly Income: 10 year Term: $992.81 / month for ten years Plus we eliminated monthly mtg. payment of $1,155.00. Net Result- Monthly disposable income increased - $2,147.81! 3/31/2011For Professional, Broker/Dealer Use Only

9. The New Purchase Reverse Mortgage Joe & Mary are Purchasing a Home (75 years old) The Old Way Sell previous home for $400,000 Uses Proceeds to purchase New Home $400,000 The Reverse Mortgage Way Down Payment $154,089 Secures reverse mortgage $245,911 Extra money for retirement savings! RESULT - $ 245,911 in extra liquidity! 3/31/2011For Professional, Broker/Dealer Use Only

10. Downsizing Example Joe Sells Home. -Sells home for $400,000. -Downsizing to new home. -Wants NO mortgage payments Joe Buys New Home -Purchase price is $250,000 -Qualifies for a Reverse Mortgage. -Joe’s down payment is $97,276* *Bases on rates from 4-20-10 Joe is 74 years old RESULT $302,724 goes into Joe’s Savings Account Joe enhances life style! Lives in new home without a mortgage payment! 3/31/2011For Professional, Broker/Dealer Use Only

11. Proper Position Concerning Financial Products  Funds are not to be used for the intention of funding investments!  Funds should only be utilized to improve clients present financial situation which may or may not include:  Provide Supplemental Retirement Income  Enhanced Retirement Lifestyle  Purchase Long Term Care Insurance  Purchase Life Insurance  Protect Estate 3/31/2011For Professional, Broker/Dealer Use Only

12. Reverse Mortgage to LTCi Not just another “pocket” from which to pay LTCi premiums Strategy must fit overall financial, retirement and LTC plans Must look at total cost of the mortgage in the plan Consider a smaller/shorter base of LTCi with a reverse mortgage as a future back up 3/31/2011For Professional, Broker/Dealer Use Only

13. Example 65 years old. Good health Home worth minimum $200,000 $100,000 reverse mortgage for reallocation to LTC plans Lump sum –Combo Life/LTCi –(Single pay traditional LTCi) Stream of income –Traditional LTCi –10-pay Traditional 3/31/2011For Professional, Broker/Dealer Use Only

14. Lump Sum into Combo Life/LTCi $100,000 premium $200,000 death benefit $400,000 LTCi benefit = $5,555/month, 6-years Advantage: –1-and-done –Death benefit can restore value to estate if no LTC –Cash value available –May have even greater leverage based on health/sex Disadvantage: –No LTC inflation protection –No Partnership asset protection –EXPENSIVE 20-year total cost (@6.75%*) = $345,931 *Including PMI 3/31/2011For Professional, Broker/Dealer Use Only

15. Ongoing Income into Traditional LTCi $5,000/year premium $5,400/month x 6-years = $394,000 LTCi benefit 3% compound inflation Advantage: –Better long-term LTCi coverage ($670,759 in 20 years) –Partnership asset protection Disadvantage: –No cash value or death benefit –Risk of future premium increase 20-year total cost (@4%*) = $154,846* *Adjustable rate loan incl. PMI, % & total loan cost can increase 3/31/2011For Professional, Broker/Dealer Use Only

16. Ongoing Income into Traditional LTCi Limited Pay – 10 years $10,000/year premium $5,400/month x 6-years = $394,000 LTCi benefit 3% compound inflation Advantage: –Better long-term LTCi coverage ($670,759 in 20 years) –Partnership asset protection Disadvantage: –No cash value or death benefit –Limited risk of future premium increase 20-year total cost (@4%*) = $184,829* *Adjustable rate loan incl. PMI, % & total loan cost can increase 3/31/2011For Professional, Broker/Dealer Use Only

17. LTCi Base / Future Reverse Mortgage Under age 62 as part of an overall LTC plan $200/day, 3-years, 3% compound (6-years shared for couples). –Short, fat & meaningful NO current reverse mortgage “Save” reverse mortgage to pay for home care, reserve LTCi for facility care OR Use reverse mortgage to extend home care –May have to self-insure or Medicaid/Partnership for facility care 3/31/2011For Professional, Broker/Dealer Use Only

18. Another Approach 65-year-old clients $200,000 traditional mortgage, house worth $500,000 Use reverse mortgage to pay off traditional Increases immediate cash flow equal to previous monthly mortgage payment –E.g., $1500/month Improve current lifestyle Allocate part of the increased income to LTCi protection 3/31/2011For Professional, Broker/Dealer Use Only

19. QUESTIONS? 3/31/2011For Professional, Broker/Dealer Use Only