What’s Your Plan?chapters.onefpa.org/fpaofthetriangle/.../2017/08/... · Winning in the Second...
Transcript of What’s Your Plan?chapters.onefpa.org/fpaofthetriangle/.../2017/08/... · Winning in the Second...
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What’s Your Plan?
A Fiduciary Look atExtended Care Planning
Presented By:
John Dalton
CPS Long Term Care & Insurance Solutions
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• Long Term Care – The Basics
• Discussing Extended Care Planning with
Clients
• Four Unique Solutions for the LTC Need
• Senior Care Needs
• Steps To a Successful LTCi Claim
Agenda
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Care provided for those
who are unable to care
for themselves
Typically provided for
an extended period of
time
What is long term care?
Supervision due to a severe
cognitive impairment, such
as Alzheimer’s disease
Assistance with activities
of daily living (ADLs)
Long term care provides help to those with severe cognitive impairment issues or those needing assistance with ADLs
4Winning in the Second Half of Life
YEARS
Average life
expectancy after
Alzheimer’s
disease diagnosis
after age 65.3
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• 1 Medicare & You, National Medicare Handbook, Centers for Medicare and Medicaid Services, Revised November 2012• 2 Claims data for Genworth Life Insurance Company and affiliates – December 1974 - December 31, 2012• 3 Source: 2012 Alzheimer’s Disease Facts and Figures, Alzheimer's Association, March 2012
Long term care is a reality
OF PEOPLE
70%
People over 65
will need long
term care
services.1
3.9YEARS
Average length
of long term
care claim
lasting longer
than one year.2
AT LEAST
LTC Multiple Solutions
$44,479 $41,400
$83,950$75,405
$0
$10,000
$20,000
$30,000
$40,000
$50,000
$60,000
$70,000
$80,000
In-Home Care Assisted Living Nursing Home Nursing Home
What is the Annual Cost of Care?
5Assisted living facilities referred to as Residential Care Facilities in California
Source: Genworth 2013 Cost of Care Survey, conducted by CareScout,® April 2013. Based on national median costs.
(44 hours
per/week, licensed
home health aid)
(semi-private room)(private room)
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• Retirement Planning
o Husband retires at age 65
o Husband probably dies first
o Wife dies by age 85
o Income need to be about 20 - 25 years
Retirement is Changing
The
Past
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•Retirement Planning
oThe average age to retire is age 631
oWomen have a 67% chance of living to 902
▪ And a 38% chance of making it to 952
oHusband likely to die first
oRetirement planning should consider at least 30 years of income
Retirement is Changing
1 Source: AOL.com Finance, U.S. Census Bureau Data, May 3, 20162 Long Term Care Associates, LTC is a Women’s Issue… or is It?, Stephan D. Forman, 4/20/16
Today
Long-Term Care- 9th hour planning
• Baby Boomers willing to at least talk about it
• Kids scattered all over the country
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Financial Impact on Caregivers
1 Beyond Dollars Study, Genworth -The Expanding Circle of Care - Jan. 20, 20162 Family Caregiver Alliance, February 2015
Educate on the following:
• The emotional and physical consequences caused by providing what could be
24 hour care
• The likelihood at least one of the children will have to put aside their life and the
impact it would have on that child’s family and relationship with siblings who do
not help.
• The lack of a plan will likely lead to family disagreements on who provides care,
where care is provided, and how care is paid for.
• The inability to keep financial commitments because paying for care requires a
reallocation of income.
• The possibility of retirement portfolio disruption that could cause lasting damage
to a surviving spouse and/or children who may need inheritance.
Who is the typical
client?
Each group requires a different conversation
……pinpointing clients
1 …….Clients who waited too long
Are knocking down your door to discuss - because………..
•One or both are close to needing care
-Can still plan a care strategy
-Too late for efficient funding with LTC coverage
•Look at other options……..
❑Insure the healthy spouse with a cash indemnity policy
❑Consider a medically underwritten SPIA
❑Life insurance with a built in nursing home benefit
❑Consider a program such as LifeCareXchange
13Winning in the Second Half of Life
If you or your spouse or partner had an extended care event now or in the future:
What’s your plan?
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What’s your written strategy?
How would you pay for it?
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“The best gift you can give your spouse or kids is
• a plan to handle your extended care needs should they arise, with
your wishes laid out in advance…..
• and a planned stream of funds to help pay for your plan that are not
impacted by how the market is treating your portfolio………
• so your spouse and kids will know what to do, with funding in place….
• and can keep loving each other during a stressful time”
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With the client, get the plan in writing.
• Powers of Attorney… health care and finances
• Where will care be provided?
• Who will provide care?
• What are the directives if the client can’t speak
for themselves?
• What if family interjects differing opinions?
• How will services progress?
• Review every few years
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What If Scenarios
E-Money and other financial software allow for “What if”
scenarios which can demonstrate to a client the probability of
portfolio health based around assumptions.
• Input if everything goes as planned and no health issues pop up
• Input a health issue age 80 of $100,000 for 3 years with no insurance in place-How does this affect the portfolio? The income and comfort of the surviving spouse?
• Input same health issue but all or some funds provided with insurance dollars How does this affect the portfolio? The income and comfort of the surviving spouse?
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What If Scenarios
93%
79%
62%
Your assets have a 93% probability to last to your age 95
Your assets have a 79% probability to last to your age 95
Your assets have a 62% probability to last to your age 95
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• Couple may keep funds separate that were brought into the
marriage
• Joint assets are accumulating from scratch
• If care is needed sooner than later……….
“you may be putting your wife into the position of explaining
to your kids why she is spending their inheritance on your
LTC expenses………
• Having dedicated funding in place can help eliminate this potential
pitfall
LTC Multiple Solutions
Long term care funding options
Private/ family
support
Public programs
Self funding
Long term care
insurance solutions
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Four Long Term Care Solutions
Traditional LTCi
Asset Based LTCi
Life with LTC Rider
Annuity Based LTCi
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One Need: Multiple Solutions
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Traditional Long Term Care
Drawbacks
• Strict Underwriting
• Lack of Flexibility
• Potential Rate Increase
Highlights
• Largest Benefit Pool
• Smallest premium commitment
• Potentially Tax Advantaged
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Affordable Plan Design
$1,558 per year
3 year plan $3,000
3% Compound 90 day EP
55 Couple
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Is LTC Insurance Expensive?
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Asset Based Long Term Care
Drawbacks
• Reduced Death Benefit
• Reduced LTC Benefit
• Inflation
Highlights
• Ultimate Flexibility
• Primary Focus LTC
• Guaranteed Level Premiums
• Potential for Simplified Underwriting
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Live
DieQuit
Asset Based LTC
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Male, Aged 60
$75,800 Single Deposit
$36,000 x 6yrs Live
$124,000 Die
$75,800 Quit
$116,000 x 6yr @ 84
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Annuity Based Long Term Care
Drawbacks
• No Immediate Asset Leverage
• Reduced Asset Growth Potential
Highlights
• Convert Tax Deferred to Tax Free
• Very Little Underwriting
• Provide Purpose to Existing
AGENDA
DISCUSSION
• Healthcare Industry Snapshot
• What’s in your “Medicare” Wallet?
• Senior Care Needs
• Holistic Approach to Care
• Partnering for Great Outcomes
PLACEMENT SERVICES
Assisted living
Adult family homes B&C
Memory Care
TECHNOLOGY
Transparent Family Portal
BeClose with Amada
FINANCIAL ASSISTANCE
LTCi claims management
MD, DON, LSCW, CM, RN
AGENCIES MUST HAVE A HOLISTIC APPROACH TO CARE
SERVICE AREAS
• Nationwide coverage
• Independently owned and managed
• Guidelines for care, standard
operating protocols
SENIOR CARE AGENCY FOCUS
• Placing in-home caregivers
• Providing care coordination
• Online monitoring of caregiver ADL’S
• Non-medical private pay provider
HEALTHCARE INDUSTRY SNAPSHOT
HOME CARE 2016 INDUSTRY$88.5 BILLION 6.7% GROWTH
- Private insurance constitutes 8.6% of industry revenuefor home care services and acute needs
Source: IBIS Industry Report - 2016
WAVE OFLTCi POLICIES COMING
Sources: American Association for Long-Term Care Insurance2015 SourceBook
TOTAL POLICIES OUTSTANDING:
7,319,16296.2%
CURRENTLY ON CLAIM:
280,0003.8%
96.2%
3.8%
“Private long-term care insurance will essentially become the non-medical equivalent of a Medicare supplement plan.”
- Jesse SlomeAALTCI Executive Director
SENIOR CARE NEEDS
Skilled Nursing Facility (R)
Independent Living
Assisted Living
Memory Care B&C
Home Health , PT,OT,SN,ST,WC
Home Bound
Needs for Seniors
GAPS ALREADY EMERGING IN AMERICA’S CARE CONTINUUM
FEWER FAMILY CAREGIVERS TO PROVIDE ASSISTANCE
A SHRINKING BASE OF SUPPORT
GROWING DISTANCE BETWEEN FAMILY MEMBERS
ALL OF THESE FACTORS CONTRIBUTE TO THE WIDENING GAP IN AMERICA’S HEALTH CARE CONTINUUM
Sources: The Value of Home Care - Home Care Association of America - 2016
STEPS TO A SUCCESSFULS LTCi CLAIM (25-50 Hours)
Filing initial claim:
• By phone or sending in paper documentation.
• Bi-monthly or monthly invoice and ADL documentation.
• Recertification of claims every 3-6-9-12 months by TPA or Carrier.
Re-educating the policyholder on LTCi benefits, terms, and definitions:
Elimination period, max daily/lifetime benefit, ADL’s, premium waiver, restoration of benefit, inflation
rider, Carrier claims process.
Acquiring all initial claims documents:
Claims forms, Dr. letters, elimination period documentation (SNF, AL, CG) RN assessment coordination (TPA or
private).
WIFM
01RE-EDUCATE
Discuss and review the LTCI
benefits of the policyholder
COLLECT & ORGANIZE FORMS
Acquire all initial claims
document
02
03 FILL OUT FORMS
Complete initial claim
04INVOICE
Bi-monthly or monthly invoice
& ADL documentation
05MAINTAIN
Recertification of claims every
3-6-9-12 months by TPA or
carrier
PARTNERING FOR GREAT OUTCOMES
KEY TAKE AWAYS
• LTCi Claim approvals are under intense scrutiny 25-50 hours
• Know what’s in the “Medicare” wallet and advise accordingly
• Senior care needs are rapidly adjusting – Home bound
• Find “Power Partners” that add synergistic value
• Contact us at (877) 44 AMADA to access Nationwide resources