Understanding Long Term Care Insurance LTCi

1
Understanding Long Term Care Insurance (LTCi)

• Presented byNorthstar Network Insurance Agency,
  Inc.

2
The 5 Ws

• Why should I add LTCi?
• Who is an appropriate prospect?
• When should I be talking about LTCi?
• What do I need to know about LTCi?
• Where do I go for more information?

3

• Why?

4
(No Transcript)
5
Why?
The odds that your house will burn down are1 in
1200
The odds that you will total your car are1 in
240
The odds that you will need some type of
long-term care (if you reach age 65) are1 in 3
(1 in 2 if you are over age 80)
6
Why?

• This generationis different

7
Why?

• Most Long Term Care services are not covered by
  major medical or disability insurance policies.
• 79 million baby boomers will be retiring in the
  next 20 years

Source Administration on Aging A Profile of
Older Americans, 2002
8
Why?

• The 80 population is the fastest growing
  segment of our population
• 1 of 2 people over age 85 will suffer from a
  cognitive impairment

Source Administration on Aging A Profile of
Older Americans, 2002 Stephen R.
McConnell, Alzheimer's Association, New York
Times, (3/31/2002)
9
Why?

• There are four ways to payfor long-term care
• Medicare
• Medicaid
• Self Insure
• Long Term Care Insurance

10
Why?

• National average cost is 55,000 per year
• Average private room in Bay Area 106,945
• -- Average Home Health Aide, hourly 21
• Average private room SD Area79,205
• -- Average Home Health Aide, hourly 19
• Medicare pays for less than 12 of all LTC
  costs
• Care options keep your client in control
• LTCi can keep your client OUT of the nursing
  home

11
Medicare

• You must be in a hospital for 3 consecutive days
  (does not include day of discharge).
• You must enter a Medicare approved facility
  within 30 days for the same condition that you
  were treated for in the hospital.
• Doctor must certify that you need daily skilled
  care.

12
Medicare

• Care must be rehabilitative in nature (must be
  expected to recover).
• If you meet Medicare's requirements, Medicare
  will pay all reasonable and customary charges for
  the first 20 days.
• For the next 80 days, you pay a co-payment of
  114 per day.

2005 copayment amount- this amount increases
every year
13
Medi-Cal

• Government program for the needy
• Client must Spend Down to qualify
• 36 month Look-Back period - 60 months withsome
  trusts
• Client and family loses control over care
• Income is not protected
• Does not pay for care in an Assisted Living
  Facility

14
Who?
15
Who?

• Client must be independent
• Fully functional and mobile
• Not cognitively impaired - ever
• Not collecting disability
• Not scheduled for surgery or still recuperating
• Must not have unknown ailments

16
Who?

• Well-controlled high-blood pressure
• Arthritis
• A history of bypass/cardiac surgery
• Well controlled cholesterol
• Non-insulin dependent diabetes
• History of successful cancer treatment
• History of minor depression

17
Who?

• Net worth of more than 100K, excluding the home
• Income of more than 30K per year
• Premium should be less than 7 of income
• Guidelines published by the National
  Association of Insurance Commissioners (NAIC)

18
Who?

• Clients with personal experience
• Business Owners
• Single Women
• May/December couples
• Clients being offered coverage through an employer

19
Starting the Conversation..

• Do you know anyone who has neededlong-term care?
  If so, how did they pay for it? How did it affect
  their family?
• Did you ever wonder how you would pay for
  long-term care if you needed it?
• What have you done to plan for your long- term
  care costs?

20

• Can you think of anything besides the need for
  long-term care that would threaten your nest
  egg?
• If so, how have you protected yourself against
  those risks?

21

• When?

22
(No Transcript)
23
When?

• Immediately!
• Clients must health qualify
• Premiums are less at younger ages
• Younger clients can take advantage of Limited
  Pay Options

24
What do I need to know?

• Indemnity vs. Reimbursement vs. Cash Benefit
• Elimination Period
• Benefit Period
• Daily or Monthly Benefit Amount
• COLA Riders
• Shared Care

25
Policy Payment Methods

• Indemnity Daily benefit is paid regardless of
  actual expense incurred. Requires monthly claim
  form.
• Reimbursement Daily/Monthly benefit paid is
  determined by actual cost incurred. Requires
  monthly claim form.
• Cash Benefit Monthly amount is paid once client
  qualifies regardless of actual amount of care
  provided or who provides the care. Monthly claim
  form not required.

26
The period of time in which the insured is
eligible for benefits, but is paying out of pocket
Elimination Period

• Can be considered a deductible
• Viewed differently from carrier to carrier
• Shorter EP higher premium
• Amount increases every year with inflation

27
The length of time (or amount of dollars) a
policy will pay in benefits
Benefit Period

• Single Benefit Pools
• Dual Benefit Pools
• Can be expressed in dollars (reimbursement) or
  days (indemnity)

28
The daily or monthly maximum the policywill pay
Benefit Amount

• Daily - indemnity or reimbursement
• Monthly usually reimbursement

29
A rider that will periodically increase the
daily/monthly benefit
Cost of Living Adjustment Rider

• Compound COLA
• Simple COLA
• Guaranteed Purchase/Buy-Up Option

30
Shared Care

• A pool of benefits that two (or more) people
  can share.
• Single pool one pool that either or both can
  draw from
• Individual pool each insured has their own pool
  and spouse can borrow from it
• Third pool each insured has their own pool, plus
  there is an additional pool that is available to
  both.

31
Additional Terms

• Benefit Triggers
• Loss of ADL
• Cognitive Impairment
• Medical Necessity
• Survivorship
• Care Coordination
• Bed Reservation
• Respite Care

32
Activity of Daily Living

• Loss of 2 usually required for benefits
• Bathing
• Continence
• Dressing
• Eating
• Toileting
• Transferring

33
Cognitive Impairment

• Diagnosis required
• Alzheimers Disease
• Senile Dementia

34
Additional Terms

• Survivorship after 10 years, when one spouse
  dies, the other has a paid up policy for life
• Care Coordination When a third party is hired
  by the insurance company to oversee care

35
Additional Terms

• Bed Reservation when insured leaves nursing
  home, the policy pays to reserve bed
• Respite Care substitute care when the
  caregiver needs a break

36
Limited Pay Options

• 10-Pay
• 20-Pay
• Paid-Up at Age 65
• Reduced at Age 65

37
What We Do

• Education
• Case Framing and Support
• Pre-Underwriting
• Conference Calls with Clients
• Licensing/Appointments
• Case Management
• Supplies

38
Our Line-Up

• GE (A)
• John Hancock (A)
• Lincoln Benefit Life (A)
• State Life (A)
• MetLife (A)
• Physicians Mutual (A)

39
Getting Started

• Find a prospect
• Gather info
• Birthday
• General health info
• Budget restrictions
• Request a quote

40

• CALL US!!
• 1-888-665-5824
• Or go to
• www.northstarnetworkinc.com
• Username agent
• Password star5459

41
(No Transcript)