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What’s Your Plan?

A Fiduciary Look atExtended Care Planning

Presented By:

John Dalton

CPS Long Term Care & Insurance Solutions

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• Long Term Care – The Basics

• Discussing Extended Care Planning with

Clients

• Four Unique Solutions for the LTC Need

• Senior Care Needs

• Steps To a Successful LTCi Claim

Agenda

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Care provided for those

who are unable to care

for themselves

Typically provided for

an extended period of

time

What is long term care?

Supervision due to a severe

cognitive impairment, such

as Alzheimer’s disease

Assistance with activities

of daily living (ADLs)

Long term care provides help to those with severe cognitive impairment issues or those needing assistance with ADLs

4Winning in the Second Half of Life

YEARS

Average life

expectancy after

Alzheimer’s

disease diagnosis

after age 65.3

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• 1 Medicare & You, National Medicare Handbook, Centers for Medicare and Medicaid Services, Revised November 2012• 2 Claims data for Genworth Life Insurance Company and affiliates – December 1974 - December 31, 2012• 3 Source: 2012 Alzheimer’s Disease Facts and Figures, Alzheimer's Association, March 2012

Long term care is a reality

OF PEOPLE

70%

People over 65

will need long

term care

services.1

3.9YEARS

Average length

of long term

care claim

lasting longer

than one year.2

AT LEAST

LTC Multiple Solutions

$44,479 $41,400

$83,950$75,405

$0

$10,000

$20,000

$30,000

$40,000

$50,000

$60,000

$70,000

$80,000

In-Home Care Assisted Living Nursing Home Nursing Home

What is the Annual Cost of Care?

5Assisted living facilities referred to as Residential Care Facilities in California

Source: Genworth 2013 Cost of Care Survey, conducted by CareScout,® April 2013. Based on national median costs.

(44 hours

per/week, licensed

home health aid)

(semi-private room)(private room)

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• Retirement Planning

o Husband retires at age 65

o Husband probably dies first

o Wife dies by age 85

o Income need to be about 20 - 25 years

Retirement is Changing

The

Past

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•Retirement Planning

oThe average age to retire is age 631

oWomen have a 67% chance of living to 902

▪ And a 38% chance of making it to 952

oHusband likely to die first

oRetirement planning should consider at least 30 years of income

Retirement is Changing

1 Source: AOL.com Finance, U.S. Census Bureau Data, May 3, 20162 Long Term Care Associates, LTC is a Women’s Issue… or is It?, Stephan D. Forman, 4/20/16

Today

Long-Term Care- 9th hour planning

• Baby Boomers willing to at least talk about it

• Kids scattered all over the country

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Financial Impact on Caregivers

1 Beyond Dollars Study, Genworth -The Expanding Circle of Care - Jan. 20, 20162 Family Caregiver Alliance, February 2015

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How Thin Can the Kids Be Stretched?

Educate on the following:

• The emotional and physical consequences caused by providing what could be

24 hour care

• The likelihood at least one of the children will have to put aside their life and the

impact it would have on that child’s family and relationship with siblings who do

not help.

• The lack of a plan will likely lead to family disagreements on who provides care,

where care is provided, and how care is paid for.

• The inability to keep financial commitments because paying for care requires a

reallocation of income.

• The possibility of retirement portfolio disruption that could cause lasting damage

to a surviving spouse and/or children who may need inheritance.

Who is the typical

client?

Each group requires a different conversation

……pinpointing clients

1 …….Clients who waited too long

Are knocking down your door to discuss - because………..

•One or both are close to needing care

-Can still plan a care strategy

-Too late for efficient funding with LTC coverage

•Look at other options……..

❑Insure the healthy spouse with a cash indemnity policy

❑Consider a medically underwritten SPIA

❑Life insurance with a built in nursing home benefit

❑Consider a program such as LifeCareXchange

13Winning in the Second Half of Life

If you or your spouse or partner had an extended care event now or in the future:

What’s your plan?

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What’s your written strategy?

How would you pay for it?

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“The best gift you can give your spouse or kids is

• a plan to handle your extended care needs should they arise, with

your wishes laid out in advance…..

• and a planned stream of funds to help pay for your plan that are not

impacted by how the market is treating your portfolio………

• so your spouse and kids will know what to do, with funding in place….

• and can keep loving each other during a stressful time”

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With the client, get the plan in writing.

• Powers of Attorney… health care and finances

• Where will care be provided?

• Who will provide care?

• What are the directives if the client can’t speak

for themselves?

• What if family interjects differing opinions?

• How will services progress?

• Review every few years

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What If Scenarios

E-Money and other financial software allow for “What if”

scenarios which can demonstrate to a client the probability of

portfolio health based around assumptions.

• Input if everything goes as planned and no health issues pop up

• Input a health issue age 80 of $100,000 for 3 years with no insurance in place-How does this affect the portfolio? The income and comfort of the surviving spouse?

• Input same health issue but all or some funds provided with insurance dollars How does this affect the portfolio? The income and comfort of the surviving spouse?

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What If Scenarios

93%

79%

62%

Your assets have a 93% probability to last to your age 95

Your assets have a 79% probability to last to your age 95

Your assets have a 62% probability to last to your age 95

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• Couple may keep funds separate that were brought into the

marriage

• Joint assets are accumulating from scratch

• If care is needed sooner than later……….

“you may be putting your wife into the position of explaining

to your kids why she is spending their inheritance on your

LTC expenses………

• Having dedicated funding in place can help eliminate this potential

pitfall

LTC Multiple Solutions

Long term care funding options

Private/ family

support

Public programs

Self funding

Long term care

insurance solutions

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Four Long Term Care Solutions

Traditional LTCi

Asset Based LTCi

Life with LTC Rider

Annuity Based LTCi

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One Need: Multiple Solutions

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Traditional Long Term Care

Drawbacks

• Strict Underwriting

• Lack of Flexibility

• Potential Rate Increase

Highlights

• Largest Benefit Pool

• Smallest premium commitment

• Potentially Tax Advantaged

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Affordable Plan Design

$1,558 per year

3 year plan $3,000

3% Compound 90 day EP

55 Couple

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Is LTC Insurance Expensive?

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Asset Based Long Term Care

Drawbacks

• Reduced Death Benefit

• Reduced LTC Benefit

• Inflation

Highlights

• Ultimate Flexibility

• Primary Focus LTC

• Guaranteed Level Premiums

• Potential for Simplified Underwriting

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Live

DieQuit

Asset Based LTC

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Male, Aged 60

$75,800 Single Deposit

$36,000 x 6yrs Live

$124,000 Die

$75,800 Quit

$116,000 x 6yr @ 84

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Annuity Based Long Term Care

Drawbacks

• No Immediate Asset Leverage

• Reduced Asset Growth Potential

Highlights

• Convert Tax Deferred to Tax Free

• Very Little Underwriting

• Provide Purpose to Existing

AGENDA

DISCUSSION

• Healthcare Industry Snapshot

• What’s in your “Medicare” Wallet?

• Senior Care Needs

• Holistic Approach to Care

• Partnering for Great Outcomes

PLACEMENT SERVICES

Assisted living

Adult family homes B&C

Memory Care

TECHNOLOGY

Transparent Family Portal

BeClose with Amada

FINANCIAL ASSISTANCE

LTCi claims management

MD, DON, LSCW, CM, RN

AGENCIES MUST HAVE A HOLISTIC APPROACH TO CARE

SERVICE AREAS

• Nationwide coverage

• Independently owned and managed

• Guidelines for care, standard

operating protocols

SENIOR CARE AGENCY FOCUS

• Placing in-home caregivers

• Providing care coordination

• Online monitoring of caregiver ADL’S

• Non-medical private pay provider

HEALTHCARE INDUSTRY SNAPSHOT

HOME CARE 2016 INDUSTRY$88.5 BILLION 6.7% GROWTH

- Private insurance constitutes 8.6% of industry revenuefor home care services and acute needs

Source: IBIS Industry Report - 2016

WAVE OFLTCi POLICIES COMING

Sources: American Association for Long-Term Care Insurance2015 SourceBook

TOTAL POLICIES OUTSTANDING:

7,319,16296.2%

CURRENTLY ON CLAIM:

280,0003.8%

96.2%

3.8%

“Private long-term care insurance will essentially become the non-medical equivalent of a Medicare supplement plan.”

- Jesse SlomeAALTCI Executive Director

SENIOR CARE NEEDS

Skilled Nursing Facility (R)

Independent Living

Assisted Living

Memory Care B&C

Home Health , PT,OT,SN,ST,WC

Home Bound

Needs for Seniors

GAPS ALREADY EMERGING IN AMERICA’S CARE CONTINUUM

FEWER FAMILY CAREGIVERS TO PROVIDE ASSISTANCE

A SHRINKING BASE OF SUPPORT

GROWING DISTANCE BETWEEN FAMILY MEMBERS

ALL OF THESE FACTORS CONTRIBUTE TO THE WIDENING GAP IN AMERICA’S HEALTH CARE CONTINUUM

Sources: The Value of Home Care - Home Care Association of America - 2016

STEPS TO A SUCCESSFULS LTCi CLAIM (25-50 Hours)

Filing initial claim:

• By phone or sending in paper documentation.

• Bi-monthly or monthly invoice and ADL documentation.

• Recertification of claims every 3-6-9-12 months by TPA or Carrier.

Re-educating the policyholder on LTCi benefits, terms, and definitions:

Elimination period, max daily/lifetime benefit, ADL’s, premium waiver, restoration of benefit, inflation

rider, Carrier claims process.

Acquiring all initial claims documents:

Claims forms, Dr. letters, elimination period documentation (SNF, AL, CG) RN assessment coordination (TPA or

private).

WIFM

01RE-EDUCATE

Discuss and review the LTCI

benefits of the policyholder

COLLECT & ORGANIZE FORMS

Acquire all initial claims

document

02

03 FILL OUT FORMS

Complete initial claim

04INVOICE

Bi-monthly or monthly invoice

& ADL documentation

05MAINTAIN

Recertification of claims every

3-6-9-12 months by TPA or

carrier

PARTNERING FOR GREAT OUTCOMES

KEY TAKE AWAYS

• LTCi Claim approvals are under intense scrutiny 25-50 hours

• Know what’s in the “Medicare” wallet and advise accordingly

• Senior care needs are rapidly adjusting – Home bound

• Find “Power Partners” that add synergistic value

• Contact us at (877) 44 AMADA to access Nationwide resources

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Thank You

www.cpsltcfpa.com