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

Living in an institution 18% Living in the community 82%

LIVING ARRANGEMENTS FOR PEOPLE RECEIVING LONG-TERM CARE

10 20 30 40 50 60 70 Odds of a House Fire (1 in 1200) Odds of a Car Accident (1 in 240) Odds of ending up in a Critical Care Unit (21 in 900) Chance of needing long- term care (3 in 4) 0.08% 0.4% 2.3% 70%

What Are The Odds?

12.30% 24.70% 23.20% 16.20% 0.00% 5.00% 10.00% 15.00% 20.00% 25.00% 30.00% 65-69 60-64 55-59 50-54

Sales By Issue Age

Sales By Issue Age 51.50% 44% 32.50% 24% 21% 16% 0.00% 10.00% 20.00% 30.00% 40.00% 50.00% 60.00% 75 or older 70-74 65-69 60-64 50-59 49 or younger

2019 Applicant Declines By Age Bands

2019 Applicant Declines By Age Bands

When Is The Right Time T

• Buy?

76.4% of new long-term care insurance buyers were between the ages of 50 and 69

(2016 New Sales By Issue Age)

7% 39% 47%

ALL OCCUPATIONS PERSONAL CARE AIDES HOME HEALTH AIDES

A SKYROCKETING NEED FOR HOME CARE WORKERS

Percentage change in employment, projected 2016-2026

What is the Cost?

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

Traditional- Joint One America - Joint Asset Based - Male Asset Based - Female Lifetime Lifetime 10 Pay Single Premium Single Premium 10-Pay Single 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 50

Traditional- Joint One America - Joint Asset Based - Male Asset Based - Female Lifetime Lifetime 10 Pay Single Premium Single Premium 10-Pay Single 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 Total Paid: $138,089.00 $256,915.0 $199,365.0 0 $156,547.50 $75,788.00 $92,370.00 $92,940.00 $136,710.00 Death Benefit $0.00 $150,000.0 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 Total Joint Death Benefit: $0.00 $150,000.0 $150,000.0 0 $150,000.00 $183,788.00 $229,077.0

Premium Comparison: Age 60

PRESCREEN! PRESCREEN! PRESCREEN!

Eryka Morehead Shannon McNeil Mykala Stava Jonathan Dannemiller Justin Morehead Austin Hultquist Phil Seibel

MEET THE TEAM!

Contact Phil: phil@collaborativeplanninggroup.com 512.557.6954