C HANGING REALITIES THEN Hardening of the Arteries Senile Rest Home Live with Family Pension NOW Dementia Alzheimer's Nursing Home Home Health Care 401(k) IRA
T HEN Chevy ’57 Rely Upon Family Self Insure – “Spend Assets”
N OW Toyota Prius - Hybrid 1) Rely Upon Family 2) Self Insure – Rely Upon Assets Accumulated 3) Long-Term Care Insurance 4) Hybrid Long-Term Care Concepts
S ELF “ INSURANCE ” What is most efficient way to spend down assets? Example: $500,000 – Stocks $500,000 – IRA’s What does long-term care cost?
L ONG - TERM CARE POLICIES EMERGE Nursing Home “Insurance” Mid ’70’s Insure Unknowns: Learning Curve for Carriers Today: Fewer Carriers/Steep Premiums Jumps L: Longevity H: Our Health
L ONG - TERM CARE INSURANCE Indemnity – Insurance Company pays claim Example: 60 year old husband/wife Both Good Health 90 Day Elimination Period 5% Compound Inflation $150 daily benefit Annual Premium $3,800 and up Premiums may increase LTC Distribution – Tax Free Tax Considerations – Talk To Your Tax Consultant This is a hypothetical illustration and does not represent an actual investment. There is no guarantee similar results can be achieved. All guarantees are subject to the claims paying ability of the issuing insurance company.
H YBRID L IFE INSURANCE – LONG - TERM CARE 60 year old female, good health, non-smoker Premium: $50,000 (Repositioning Assets) No Elimination Period LTC “Balance” $250,149 Reimbursement – Insurance company pays you back after expense incurred. Monthly benefit 4 or 6 years. Monthly Benefit $3,474 (4 Years) Cash value accumulation No Surrender fees Death Benefit not taxable LTC Distribution – tax free Example: This is a hypothetical illustration and does not represent an actual investment. There is no guarantee similar results can be achieved. All guarantees, including optional benefits such as riders, are subject to the claims paying ability of the issuing insurance company.
H YBRID RETIREMENT ANNUITY – LONG - TERM CARE RIDER 60 year old female, good health, non-smoker Premium: $50,000 90 Day Elimination Period LTC “Balance” – Rising with Age 60 - $202,767 ($2,112/mo) 80 - $259,920 ($2,708/mo) Reimbursement – Insurance company pays you back after expense incurred. Monthly benefit up to 8 years. Cash value accumulation 9 Year Surrender Schedule Death Benefit – gains are taxable to beneficiaries. LTC Distribution – tax free Option to convert to future income stream instead of LTC benefit Example : The hypothetical case study results are for illustrative purposes only and should not be deemed a representation of past or future results. This example does not represent any specific product, nor does it reflect sales charges or other expenses that may be required for some products. No representation is made as to the accurateness of the analysis. All guarantees, including optional benefits such as riders, are subject to the claims paying ability of the issuing insurance company. All optional benefits such as riders and bonuses are available for an additional cost. It is important to weigh the costs against the benefits when adding such options to an annuity/life insurance contract. The cost for riders varies widely but is generally between.15% to.75% of the account.
L ONG TERM CARE AND HYBRID BENEFITS ARE THE SAME – COVERING : Home Health Care Adult Day Care Assisted Living Nursing Home
O THER CONSIDERATIONS TO “ HYBRID ” STRATEGY Cash Value Exchanges Pension Protection Act and Annuities Ohio Long Term Care “Partnership”
CONCLUSION No “Silver Bullets” Process – “Plan Centric” Always Have “Unknowns” Health Care Issues Remain Industry Adapts – New Options Questions?
The information presented is not intended to constitute tax or legal advice. Please consult with your attorney or accountant for advice specific to your situation. Securities and Investment Advisory Services offered through NFP Securities, Inc., member FINRA/SIPC, Kehoe Financial Advisors, LLC is not affiliated with NFP Securities, Inc.