Title: Planning for Longevity A Seminar on LongTerm Care Insurance
1Planning for LongevityA Seminar on Long-Term
Care Insurance
2Growth of Population 65 and Over
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82
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34.6
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2
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1999
2050
New York Times, May 2000
3What is Long-Term Care?
- Long-Term Care involves a wide variety of
services for people with prolonged physical
illness, disability or cognitive disorder
Services are aimed at helping people with chronic
conditions compensate for limitations in their
ability to function independently.
4Types of Long-Term Care Services
- Nursing facility care.
- Alternate care facilities
- Assisted living.
- Alzheimers and community-based residential.
- Home health care.
- Community care options
- Adult day care.
- Respite care.
- Options are expanding all the time.
5Long-Term Care is Expensive
- Nursing facility
- Currently ranges from 40,000 to 100,000
annually. - Home health care
- Average cost per visit in 1997 was 77.
- Nurse 98
- Home health aide 54
- Assisted living
- Average annual cost 25,300.
Wall Street Journal, 3/31/99. Key Data on
Home Care, LTC News and Comment, February 1998 -
Source National Association for Home Care.
Can Aging Baby Boomers Avoid the Nursing Home?
American Council o Life Insurers, March 2000
6Skilled Nursing Facility Care Costs
NH 199
VT 100
177
175
100
100
MA 230
133
142
178
RI 224
166
136
100
127
CT 232
100
149
101
142
151
NJ 192
130
133
141
125
115
115
117
110
105
156
127
DE 129
126
126
118
92
118
MD 151
137
144
100
103
102
DC 184
413
130
90
127
120
Kiplingers Retirement Report, January 1999
7Odds of Individuals Needing Skilled Nursing
Facility Care After Age 65
48 or almost 1 in 2
Baby Boomers Need to Plan for the Future,
PR Newswire, December 8 1998 - Source American
Health Care Association.
8Odds of Individuals Needing Skilled Nursing
Facility Care After Age 80
Over 90 or 9 in 10
American Association of Retired PersonsNational
Nursing Home Study
9Long-term care is more than just nursing home
care. Of 12 million people needing long term
care services, only 1.5 million were residents in
nursing homes.
The National Underwriters Long-Term Care Handbook
10Major Financial Risks
Risk Odds Average Claim
- Homeowners 1 in 88 2,000Insurance Claim
- Auto Collision 1 in 47 8,000Insurance Claim
- Needing Long- 1 in 2 126,000Term Care (cost
of 2.5 years skilled nursing facility care)
Journal of the American Society of CLU ChFC,
September 1996. The Looming Crisis, American
Health Care Associations web site, September
1998.
11Who Pays for Long Term Care?
12MediCARE Doesnt Cover the Majority of Long-Term
Care
- Short-term skilled nursing facility stays only.
- No custodial care.
- 40 of home care reimbursement requests are
ineligible.
U.S. News World Report, 8/11/97
13MediCAID, What Does it Cover?
- A federal-state health insurance program for the
poor. It pays for two-thirds of all nursing home
residents.
14Medicaid What Can You Keep While Growing Poor?
- House.
- Furniture (2,000).
- Car (4,500).
- Burial plot and funds (1,500).
- Small amount of cash andpersonal assets
(2,000).
Figures vary by state
15Personal Finances ... You Pay!
- Does long-term care insurance make sense?
Probably not for those wealthy enough to set
aside 200,000 to cover four years of care, while
still leaving enough to support a spouse or some
other dependent.
16Private Insurance A Solution
- A Long-Term Care policy is an affordable and
attractive form of insurance.
17Reasons People Consider Long-Term Care Insurance
1. Personal financial independence.
2. Protect savings/assets.
3. Afford health care services.
4. Protect spouses lifestyle.
5. Choose services I prefer.
6. Government may not cover future needed care.
7. Stay off welfare.
8. Pass on inheritance.
18When is the Right Time to Consider Long-Term Care
Insurance?
- Are you between the ages of 50-70?
- Are you recently retired or have you begun
planning for retirement? - Are you reasonably active and healthy?
Each situation is unique and should beevaluated
separately.
19Is Your Financial Situation Appropriate for
Considering Long-Term Care Insurance?
- Do you have 100,000 assetsnot including the
value of your home? - Will your retirement income and Social Security
provide at least 30,000 annually? - Have you planned for your health insurance
portfolio in retirement?
Each situation is unique and should beevaluated
separately.
20What Should I Look For In aLong-Term Care
Insurance Policy?
Plans that offer
- Flexibility and choice.
- Complete solutions.
- Optional benefits.
21What Amount Should the Daily Benefit Be?
- At least as high as the averaged daily cost of
skilled nursing facility carein your locality. - Check with Department on Aging for your
localitys average daily cost.
22What About Inflation?
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- Simple vs. compounded interest.
- Inflation protection becomes more important the
younger you are at purchase.
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23What Benefit Period Should You Choose?
- Options 750 days, 1,500 days, or lifetime.
- Of those needing nursing home care
- 22 could stay 1-3 years.
- 13 could stay 3-5 years.
- 21 could stay more than 5 years.
San Francisco Chronicle, 2/24/97
24When Should Benefits Begin?
- Elimination periods typically 0, 30, 60, 90
days. - Longer elimination period reduces premium.
- May choose 0 days for home health care only.
25How Do I Qualify forInsurance Coverage?
- Based on health history and lifestyle.
- Face-to-face interview possible.
- Health conditions that are controlled, stable,
and dont affect lifestyle generally are
acceptable.
26How Do I Choose a Long-Term Care Insurance
Company?
- Research companies.
- Contact your State Department on Aging.
- Shoppers Guide to Long- Term Care Insurance.
- Consumer publications.
27Planning for Longevity
- Long Term Care InsuranceA Responsible Choice