Planning for Care with an Aging Society Managing the Impact of - PowerPoint PPT Presentation

Planning for Care with an Aging Society

Managing the Impact of Long-Term Care needs and Expense on Retirement Security Monograph The 65 Plus Age-Wave and the Caregiving Conundrum: The Often Forgotten Piece of the Long-T erm Care Puzzle By: Sandra Timmermann, ED.D.

There are four inter-related factors that should bring caregiving issues to the forefront in policy discussions: • The increasing reliance on family members as the primary caregivers and the impact of caregiving on their health, employment status, and financial security, as well as on their productivity in the workplace, which impacts the employer • The rise of the aging-in-place movement, which points to the need for community-based infrastructures and financial solutions to support the care recipient and the family • The impending shortage of paid caregivers holding low-wage jobs such as home health aides, nursing assistants, and personal care aides • The rising cost of long-term care services and the lack of personal planning for a long- term care event, impacting the finances of both the care recipient and the family

70% What Are The Odds? 70 60 50 LIVING ARRANGEMENTS 40 FOR PEOPLE RECEIVING LONG-TERM CARE 30 20 Living in an institution 10 18% 2.3% 0.08% 0.4% 0 Odds of a Odds of a Car Odds of ending Chance of House Fire Accident up in a Critical needing long- Living in (1 in 1200) (1 in 240) Care Unit term care the (21 in 900) (3 in 4) community 82%

When Is The Right Time T o Buy? Sales By Issue Age 2019 Applicant Declines By Age Bands 50-54 16.20% 49 or younger 16% 50-59 21% 55-59 23.20% 60-64 24% 60-64 24.70% 65-69 32.50% 70-74 44% 65-69 12.30% 75 or older 51.50% 0.00% 5.00% 10.00% 15.00% 20.00% 25.00% 30.00% 0.00% 10.00% 20.00% 30.00% 40.00% 50.00% 60.00% Sales By Issue Age 2019 Applicant Declines By Age Bands 76.4% of new long-term care insurance buyers were between the ages of 50 and 69 (2016 New Sales By Issue Age)

What is the Cost? A SKYROCKETING NEED FOR HOME CARE WORKERS 47% 39% 7% ALL OCCUPATIONS PERSONAL CARE AIDES HOME HEALTH AIDES Percentage change in employment, projected 2016-2026 Source: Bureau of Labor Statistics

Traditional Long-T erm Care Insurance • Reimbursement Benefits • State Partnership Protection • Return of premium upon death rider is available but seldom used due to pricing (approximately 40% increase in premium) • Daily or monthly benefits, fixed or unlimited duration • No cash surrender value • Premiums are level, but not guaranteed (can increase) • Premiums can be tax deductible (HSA, C-Corp, unreimbursed medical expense) • Can accept 1035 exchanges from a life insurance policy • Payment Options (Vary by carrier) • Single premium • 10-Pay • Lifetime (most common)

Traditional Long-Term Care: Lifetime Pay

One America Asset-Care Insurance • Reimbursement benefits • No State Partnership Protection • Joint policy with survivorship death benefit, or individual policy • Monthly benefits, fixed or unlimited durations • Some cash surrender value • Premiums are level and guaranteed • COB premiums can be tax deductible (HSA, C-Corp, unreimbursed medical expense) • Can accept 1035 exchanges from life insurance policies • Payment options (can be a combination) • Single premium • 10-Pay • Lifetime

One America Asset-Care: Pay to Age 95

One America Asset-Care: 10 Pay

One America Asset-Care: Single Premium

Asset Based Long-T erm Care Insurance • Indemnity or reimbursement benefits • No State Partnership Protection • Death benefit typically returns at least all of premiums paid • Monthly benefits, fixed duration • Cash surrender value, some policies offer full liquidity • Premiums are level and guaranteed • Internal LTC charges can be tax deductible (HSA, C-Corp, unreimbursed medical expense) • Can accept 1035 exchanges from insurance policies • Payment options (Vary by carrier) • Single premium • 5, 7, 10, 15, 20 Pay Options • Lifetime

Asset Based: Female 10 Pay

Asset Based: Female Single Premium

Asset Based: Male 10 Pay

Asset Based: Male Single Premium

Premium Comparison: Age 50 Traditional- Joint One America - Joint Asset Based - Male Asset Based - Female Single Single Single Lifetime Lifetime 10 Pay Premium Premium 10-Pay Premium 10-Pay Age at policy Issue 50 50 50 50 50 50 50 50 # PMTS till age 85 35 35 10 1 1 10 1 10 Annual premium $4,128.25 $6,204.00 14,107.50 112,437.00 63,159.00 7,579.00 75,863.00 10,427.00 Total Paid: $144,488.75 $217,140.00 $141,075.00 $112,437.00 $63,159.00 $75,790.00 $75,863.00 $104,270.00 Death Benefit $0.00 $150,000.00 150,000.00 150,000.00 63,159.00 75,792.00 108,000.00 108,000.00 Total Annual Joint Premium: $4,128.25 $6,204.00 14,107.50 112,437.00 139,022.00 18,006.00 Total Joint Death Benefit: $0.00 $150,000.00 $150,000.00 $150,000.00 $171,159.00 $183,792.00

Premium Comparison: Age 60 Traditional- Joint One America - Joint Asset Based - Male Asset Based - Female Single Single Single Lifetime Lifetime 10 Pay Premium Premium 10-Pay Premium 10-Pay Age at policy Issue 60 60 60 60 60 60 60 60 # PMTS till age 85 25 25 10 1 1 10 1 10 Annual premium $5,523.56 $10,276.60 19,936.50 156,547.50 75,788.00 9,237.00 92,940.00 13,671.00 $256,915.0 $199,365.0 Total Paid: $138,089.00 0 0 $156,547.50 $75,788.00 $92,370.00 $92,940.00 $136,710.00 $150,000.0 Death Benefit $0.00 0 150,000.00 150,000.00 75,788.00 92,370.00 108,000.00 136,707.00 Total Annual Joint Premium: $5,523.56 $10,276.60 19,936.50 156,547.50 168,728.00 22,908.00 $150,000.0 $150,000.0 $229,077.0 Total Joint Death Benefit: $0.00 0 0 $150,000.00 $183,788.00 0

PRESCREEN! PRESCREEN! PRESCREEN!

MEET THE TEAM! Mykala Stava Eryka Morehead Shannon McNeil Jonathan Dannemiller Justin Morehead Phil Seibel Austin Hultquist

Contact Phil: phil@collaborativeplanninggroup.com 512.557.6954