Leveraging Long Term Care Solutions in Retirement Planning

Rich Samuelson, Regional Sales Director

MassMutual

The information provided is not written or

intended as tax or legal advice and may

not be relied on for purposes of avoiding

any Federal tax penalties. Massachusetts

Mutual Life Insurance Company

(MassMutual), its employees and

representatives are not authorized to give

tax or legal advice. Individuals are

encouraged to seek advice from their

own tax or legal counsel.

2

Why Are You Here?

Clients need to prepare for wellness costs in retirement

The Age Wave Has Begun

Risks in Retirement

LTC Options

Agenda

3

5

The Age Wave Has Begun

0

20

40

60

80

100

2000 2010 2020 2030 2040 2050

Mill

ion

s

Projected U.S. Population Age 65 and Older

Age 65 and older

6

The Age Wave Has Begun

Who are the Baby Boomers?

• Age 50+

• Believe health is the #1 ingredient for

a happy retirement.

• Only 1 in 7 has attempted to estimate

how much they may need for

healthcare and long term care

expenses.

• More than half retire earlier than

expected, and health is the #1

reason.Health and Retirement: Planning for the Great Unknown, Merrill Lynch and Age Wave, 2015.

7

Key Risks with Retirement Planning

1. Longevity

How long will you live?

9

Key Risks with Retirement Planning

2. Inflation Risk:

10

Key Risks with Retirement Planning

3. Health Care

11

Key Risks with Retirement Planning

4. Health Care

12

Key Risks with Retirement Planning

4. Health Care

13

Key Risks with Retirement Planning

5. Debt

32% of Americans 56-61 carry $12,490 of non mortgage debt in retirement.

37% of Americans have less then $1,000 in checking Accounts

Carrying Debt in Retirement

15

17

Do you know someone who…

Planned to retire in 2009,

but was not able to?

18

Investment Risk

S & P 500® STOCK PRICE INDEX

The S&P 500® price index is a measure of common stock market performance in the U.S. This market index has been provided for informational

purposes only; it is unmanaged and does not reflect investment fees or expenses. Individuals cannot invest directly in an index.

The average 401(k) balance declined by 34.8% during the Great Recession of 2007 - 2009

Home in Retirement

19

9

Home in Retirement

What do retirees say about their homes?

Home in Retirement: More Freedom, New Choices, Merrill Lynch and Age Wave, 2015.

I am living in the best home of my life

I am free to choose where I most want to live

My mortgage is paid off

My home’s emotional value is more important than its financial value

If I need extra care, I want it to be in my own home

10

Home in Retirement

Where retirees prefer to receive long term care

Home in Retirement: More Freedom, New Choices, Merrill Lynch and Age Wave, 2015.

Own Home85%

Assisted Living Facility

10%

Family Member Home

4%

Nursing Home1%

11

Home in Retirement

Where individuals receive care is changing

Centers for Medicare and Medicaid Services, 2013.

0

500

1,000

1,500

2,000

2,500

3,000

3,500

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Nursing Home Residents Home Health Care Recipients

Tho

usa

nd

s

Up 30%

Down 5%

23

People receive long term care:

●In their homes

●Community-based care

●Adult day care centers

●Assisted living facilities

●Nursing homes

24

Long term care costs:

NAT IONAL MEDIAN COSTS*

* Source: Cost of Care Survey, Genworth, 2017.

Nursing home (private room)

$97,445/year

$8,121/month

$267/day

Home health aide

$21.50/hour

How will you pay for care?

• #

26

Consider:

●Health insurance?

●Disability income insurance?

●Government programs?

●Medicare*

●Medicaid*

For more information regarding benefits provided by Medicare or Medicaid, visit www.cms.hhs.gov. Medicaid guidelines vary by state. Contact your local Medicaid office for details.

*

27

More considerations:

● Savings?

● Liquidate accounts or

assets?

Background

LTC Options

28

Hybrid Single Prem. Standalone LTC Rider’s on life policy

15

LTC Tools

• Traditional LTCI

• Prospects generally age 45-70

• Level annual premiums

• Full underwriting

• Premiums eligible to be deducted, benefits generally received tax free

• 37 State Partnership Programs for Medicaid Protection

• Prospects generally age 50-65

• Life insurance/LTC coverage• Single premium

• Gender specific pricing, simplified app & uw

• A portion of premium eligible to be deducted, benefits generally received tax free

• Not Partnership eligible

• Death benefit acceleration rider

• Prospects generally life buyers age 35-55

• Premiums scheduled to be level

• Gender specific pricing, full life & ltc underwriting

• Premiums NOT tax deductible, tax-free benefits subject to 3rd party ownership restrictions

• Not partnership eligible

30.

$-

$0.5

$1.0

$1.5

$2.0

$2.5

2007 2008 2009 2010 2011 2012 2013

“LTC/Life” Combo Products

Industry Single Premium Sales (in billions)

Source: LIMRA Sales Results

17

Right product for the client

1. What’s the main coverage objective?

2. What can they afford?

3. What sources do they have to pay for future health care costs?

32

Questions?