Download Retirement Planning with Alternative LTC Products: Peter Skelton

Building a Long Term Care
Strategy
Financial Planning Association – Northeastern New York Chapter
What is long term care?
 Defined as the assistance or supervision you may need
 Long term care can be received at home, in the community or in a nursing
home or assisted living facility.
 Services needed because you are not able to perform some (2 or more) of
the basic Activities of Daily Living (ADLs)
How much could long term care cost?
Address the Need for Long Term Care
in Your Retirement Strategy
 Your life today is all about options
 Building a retirement strategy is about living the way you want to live,
including in the event of a long term care need
 At least 70% of people over 65 will need long term care services and support at
some point.
Two Key Questions to ask yourself
1. “What is my written plan?”
2. “How will I pay for this?”
What are your options?
 Self-funding
 Private Family Support
 Public Programs
 Insurance
Or a combination of these options.
Perceptions and Misconceptions
 “I already have health insurance.
I’m covered.”
 “I probably won’t need long term
care.”
 “My family will take care of me.”
 “I’ll never end up in a nursing
home.”
 “If I need special care, I’ll pay for
it from my retirement and my
savings.”
 I’m too young to think about
being old.”
When you think about your financial security
during retirement, which of the following is
most important to you?
 Handling unexpected medical expenses
 Having enough income to sustain my lifestyle in the future
 BUT…….
Another consideration is the impact that a long
term care event will have on your family.
How would an unexpected long term care event
affect people you love?
Care Coordination
 Complex challenges. Simple claim process.
 Assistance to help you find eldercare resources and providers in your area.
Care Coordination can help you identify services and providers that may
help you stay home and maintain your independence as long as possible.
Types of Traditional LTC Plans
 NYS Partnership and Non-Partnership
 Shared Care Solutions
Alternative LTC Products
Where do they fit in?
Cost Differences
 Competitive Positioning Doesn’t Change
 Women Charged More Than Men
 Most Pricing Anomalies Occur at Age Extremities
 Stick to Basic Life Insurance Product Selling Strategies
Coverage Options
 Long-Term Care and Chronic Illness Riders
 Known Cost, Known Benefits
 “Free” Accelerated Death Benefit Riders
 Unknown Cost, Unknown Benefits
 Hybrid Products (Linked Benefits)
 Different Purpose, Different Design
Underwriting Requirements
 Cognitive Impairment Test
 Mortality vs. Morbidity
 Simplified Issue
 Contractual Provision
Key Questions to Consider
 What types of services do the benefits cover?
 What had to happen for me to go on claim?
 How much benefit will I receive, and how often?
 What happens once I go on claim?
What types of Services do the Benefits
Cover?
 Custodial services, services that help with the 6 ADLs. (Home health,
hospice care, adult day care, etc.).
 Informal Care
 Qualifications depend on Benefit payment structure
 Reimbursement
 Indemnity
 Cash
How much benefit will I receive, and how
often?
 Dollar-for-dollar versus Discounted Rate
 Predetermined percentage of death benefit (2%, 3%, 4%)
 Capped at IRS per diem limit and Above
*Pulled from Nationwide’s Understanding the Variations in Long-Term Care and Chronic Illness Riders marketing brochure
*Pulled from Nationwide’s Understanding the Variations in Long-Term Care and Chronic Illness Riders marketing brochure
What do I have to do to go on claim?
 Permanency:
 Is the qualifying condition temporary or permanent?
 Elimination Period:
 Exhibiting symptoms or receiving care?
What happens once I go on claim?
 Effects on the policy
 Who will manage the policy?
Available Solutions with Living Benefit
Riders
 Term Insurance
 Conversion Options
 Permanent Insurance
 Annuities
4 Reasons to Consider Hybrid Life/LTC
Options
1. Your premiums are locked in.
2. Any LTC coverage not used remains in a death benefit pool.
3. LTC payments go to the proposed insured – not the caregiver
4. There is inflation protection you use no matter what.
The toughest conversations are often
the most important ones.