Dave Champe

1
Dave Champe
Long-Term Care Insurance
Preserve Your Lifestyle and Protect Your Life
Savings

• CLU, ChFC, CIC, RHU
• Evergreen Insurance Associates, LLC
• A subsidiary of ST Insurance Group, LLC

2
What is Long-Term Care?

• Addresses a wide range of supportive services
  provided to those who lack capacity for self-care
  due to chronic illness, disability or cognitive
  disorder.
• Services generally last for an extended period of
  time. Levels of care range from skilled services
  to assistance with the basic routines of daily
  life.
• A small percentage of long-term care services
  provide skilled services in nursing facilities,
  but most long term care is custodial, provided
  either in facilities or at home.

3
Activities of Daily Living (ADLs)

• Bathing
• Dressing
• Eating
• Toileting
• Transferring
• Continence

4
Cognitive Impairment of

• Memory
• Orientation
• Reasoning

5
Where is Long Term Care Provided?

• At Home
• Assisted Care Facilities 1
• Nursing Homes
• Adult Day Care 2
• Alzheimers Facilities

1. In California, Residential Care Facility 2. In
Idaho and Oregon, Adult Foster Care
6
An Aging Population

• By the year 2030, the older population will
  more than double to about 70 million.

Source A Profile of Older Americans 2001
Administration on Aging, US Dept of Health and
Human Services
7
Anticipated Growth Percentage of 65 Population
vs. Total US Population
Total U.S. Population
65 and Over Population
Note Data for the years 2000 to 2050 are
middle-series projections of the population
reference population These data refer to the
resident population. Source U.S. Census Bureau
Decennial Census Data Population Projections,
Published in Connings Industry Insight, Issue
4, Long Term Care Insurance, Published June 2002
8
Changing Family Structures

• Fewer children
• Families living far apart
• Women in the workforce

9

• Most people traditionally have gotten long term
  care at home, usually from a family member.
  But today, theres often no one nearby to
  help out a result of high divorce rates,
  smaller families, and more mobility.

Source US News World Report, 5/21/01
10

• More than half of all women and a third of all
  men who survive to age 65 are expected to
  spend time in a nursing home before they die.

Source Wall Street Journal, 2/21/2001
11
Personal Resources

• Out-of-Pocket
• Expenses paid from personal savings and
  investments.
• Reverse Mortgage
• Certain homeowners may qualify for a reverse
  mortgage, allowing them to tap the equity in the
  home while retaining ownership.
• Private Health Insurance
• Some Private health insurance policies include
  coverage for limited period of at-home, or
  nursing home care, usually directly related to a
  covered illness or injury.
• Long-Term Care Insurance
• Private insurance designed to pay for long-term
  care services, at home or in an institution,
  either skilled or unskilled. Benefits will vary
  from policy to policy.

12
Who Pays for Nursing Home Care?
Source Centers for Medicare Medicaid Services,
Office of the Actuary, 2003 Projected
Expenditures Data Released, January 2002
http//cms.hhs.gov/statistics/nhe/projections-2001
/proj2001.pdf
13
Who Pays for Home Care?
Source Centers for Medicare Medicaid Services,
Office of the Actuary, 2003 Projected
Expenditures Data Released, January 2002
http//cms.hhs.gov/statistics/nhe/projections-2001
/proj2001.pdf
14
You and Your Family are Insured for Other Major
Risks to Your Financial Security

• Health Insurance
• Home Insurance
• Auto Insurance
• Life Insurance

15
Reasons for Purchasing Long-Term Care Insurance

• Help Protect Assets
• Help Preserve Independence
• Avoid Depending Upon Family
• Quality of Care Choices

16

• Is Long-Term Care Insurance Appropriate for You?

17
Selecting a Long-Term Care Insurance Policy

• Outline of Coverage
• Premiums, Waiting Periods (0,30,60,90,180 days),
  Maximum Duration of Benefits
• Benefit Triggers
• At least two of the six Activities of Daily
  Living (ADLs)
• Coverage of all Levels of Care
• Home Care, Adult Day Care, Assisted Living
  Facility, Nursing Home, Hospice Care
• Inflation Protection Option
• Simple, Compound

18
Important Features and Options ofthe Individual
Policy that You Select

• Premium
• Payments Single, Annual, Semi-Annual, Quarterly,
  Monthly
• Duration Single, 10 Pay Option, Lifetime
• Daily Benefit Amount
• 40.00 through 250.00 per day
• Lifetime Maximum
• Benefit Duration of 3 yrs, 5 yrs, Lifetime
• Care Coordinator
• An advisor provided by the insurance company to
  coordinate your expenses with your policy
  provisions
• Tax Qualified
• Personal, Corporate

19
Schedule A-Itemized Deductions
20
Long-Term Care Tax Issues
Current law limits the annual amount of LTC
premiums that can be deducted, based on the age
of the insured.

• These annual limitation amounts are adjusted for
  inflation each year.

21
As Many as 130 to 140 Companies Currently Sell
Long Term Care Insurance

• How Can You Choose the Right One?

Connings Industry Insight, Long Term Care
Insurance, p7, June 2002.
22
Selecting a Long-Term Care Insurance Company

• Select a company that has a longstanding national
  reputation for product quality and customer
  service.
• Ask for the insurance companys financial
  rating.1 Investigate the companys financial
  strength and claims paying ability by checking
  its ratings with the A.M. Best rating service and
  the Standard and Poors Rating. These ratings
  result from analyses of a companys financial
  records.1
• Make sure the company you select has been in the
  long term care insurance business for more than
  15 years. The number of years a company has been
  selling LTC insurance is an indicator of their
  experience with stabilizing premium rates.
• Select a company with a large number of policies
  sold. The greater the number of policies, the
  larger the risk pool from which a company pays
  its claims.
• Finally, make sure that the agent selling the
  policy has long term care insurance expertise.

1 Health Insurance Association of America (HIAA),
A Guide to Long Term Care Insurance, 2002.
23
Example Proposal
24
Asset-Care Illustration
25
Dave Champe
Long-Term Care Insurance
Preserve Your Lifestyle and Protect Your Life
Savings

• CLU, ChFC, CIC, RHU
• Evergreen Insurance Associates, LLC
• A subsidiary of ST Insurance Group, LLC