Original Masters

1
Long Term Care Insurance
According to the Wall Street Journal, the
biggest mistake an investor can make when
planning retirement is the failure to consider
long-term health care needs. October 22, 2001
2
Im Already Covered

• Long term care is NOT routinely covered by
  medical insurance or Medicare
• Group Health Plans
• Individual Medical Plans
• HMOs (Regular or Medicare)
• Medicare
• Medicare Supplements
• Long Term Disability Income Insurance

3
It Wont Happen to Me

• Anyone can need long term care at any time.
• 40 of the people who need long term care
  today are working age adults (age
  18-64)

4
The Facts
For every 1,000 people 5 will have a house
fire 70 will have an auto accident 500 will
need Long-Term Care
Source Http//www.ltc-america.com/whyconsiderltc/
whyconsiderltc.html, Asset Protection Network,
Long Term Care America, 2001
5
Longevity

• Since 1900, medical science
• has extended the average life
• expectancy by 31 years.
• If you live a long life, chances are you will
  need long-term care.

6
Women outlive their spouse or partner by an
average of 17 years
7
The Sandwich Generation
The Life and Times of an Extreme Mom, by
Elizabeth Cohen Originally published in Newsweek
magazine, March 4, 2002 I brought her home and
began the painful process of learning to mother
my own mother... These days I dress her, plan her
activities and take her on short walks just as
she did for me when I was young... I have
begun to call my role extreme mothering the
care and feeding of people on opposite sides of
the life arc.
8
Im not an average investor, I can certainly
afford 50,000 a year for long-term care.
9
Realistic Costs

• Round the clock home health care
• Home Health Aide 140,000/year
• Registered Nurse 345,000/year
• Private room in upscale St. Louis facility
• 80,000/year to 120,000/year

10
Up to 120,000 year for room and board only
Add 20 more for ancillary supplies and
services. At least 10 of residents in upscale
facilities hire personal private duty
nurses. 200,000 a year today!
11
With Inflation
Long-term costs are expected to triple in 20
years 2.5 years of care in 2025 1.5 million
dollars
12
What If..
.I dont use it? .I cant qualify for
coverage?
13
Its not just all about the money!

• With a Plan
• Asset Protection
• Care Management
• Maintain Independence Control
• Avoid Crisis Management

• Without a Plan
• Leave Legacy to Nursing Home
• Who do you call?
• Your family members will make choices for you
• Liquidate investments in Crisis

14
Long-term care insurance just makes sense.
Especially for business owners.
15
LTC Insurance Business Owners

• Move pretax corporate dollars out of your
  company.
• Deduct those dollars as a usual business expense.
  
• Make those dollars available to your heirs.
• Provide you or your key employees lifetime
  protection against the devastating cost of
  long-term care.

16
LTCI is health insurance
Qualified long-term care insurance contracts
are treated as accident and health insurance
contracts. You can include in medical
expenses qualified long-term care expenses,
and within certain limits, premiums paid for
qualified long-term care insurance.
17
What the IRS says
The IRS has determined that Long- Term Care as an
employee benefit does not have to follow
traditional ERISA guidelines. This means that
the employer can pick and choose who will
participate in this benefit program. This benefit
can create Golden Handcuffs for key employees
and a Golden Parachute for business
owners. This benefit allows the corporation to
move business dollars into the hands of key
executives
18
Whats your deduction? C-corporation

• Corporation can deduct premiums, IRC sec. 162
• Not included in employees income, IRC sec.106
• Can discriminate, HIPAA allows
• No ceiling on premiums, IRC sec. 162
• Tax-free benefit, IRC sec. 105(b)
• May include dependents
• Return of Premium

19
Rosalynn Carter
There are only four kinds of people in this
world Those who
have been caregivers Those who currently are
caregivers Those who will be caregivers Those who
will need caregivers. -February 13, 1997
Speech given as Honorary Chair of Last Acts
20
Putting It
All Together

• Risk management
• Employee benefits
• Retirement plans
• Business continuation
• Estate conservation