1. “The two most important driving forces for the federal budget are the aging of the U.S. population and rapidly rising health- care costs.” - Federal Reserve Chairman Ben Bernanke A Long Term Care Benefit Plan is the conversion of an in-force life insurance policy into a pre-funded, irrevocable Benefit Account that is professionally administered with payments made monthly on behalf of the individual receiving care. This option extends the time a person would remain private pay and delays their entry onto Medicaid.

2. “In the coming decades, many Americans will not have a way to pay for long-term care services. As the population is aging, the need for long-term care services is exploding. However, as the need for services increases, government funding will not be able to keep up, undermining a critical component of the nation’s health care delivery system.” –The Long Term Care Funding Crisis Milliman Consulting

3. Long Term Care Benefit Plan Convert the death benefit of a life insurance policy into a Long Term Care Benefit Plan to cover the costs of Senior Living and Long Term Care. No costs or fees Simple application and approval process (30-60 days) All types of in-force life insurance qualify No age restrictions No medical underwriting required– APS review and phone interview to verify care needs No more premium payments for enrollee Monthly payments made directly to care provider/facility Final expense funeral benefit or account balance paid to family at time of death Benefit can be adjusted to match changing needs Nursing Home, Assisted Living, Home Health and Hospice all qualify Available in all states Medicaid qualified spend-down while remaining private pay as long as tax advantaged Benefit Account lasts

4. Long Term Care Benefit Plan Converting a life insurance policy into a Long Term Care Benefit Plan is a 4 step process 1) The policy owner will sell their life insurance policy for a percentage of the face value.(a) 2) The proceeds from the policy sale are placed into an irrevocable, FDIC insured “Control Account” in the name of the policy owner.(b) 3) At the direction of the account holder, the Account will make automatic monthly payments to their choice of care provider.(c) 4) The entire amount placed in the Account is protected and can only spent on long term care services (every account reserves a funeral benefit).(d) (a)The sale of the policy is effectuated by a licensed life settlement “Provider” (b)Once the policy is sold the owner is no longer responsible for premium payments (c)The monthly amount and provider of care can be changed with advanced notice (d)Any remaining Account balance in excess of the funeral benefit in the case of a death is paid to one or more named “Account Beneficiaries”

5. Enrollment Criteria: Immediate need for Long Term Care Any form of life insurance accepted Death benefit $50,000-$1,000,000 No Age minimum No carrier prohibitions APS review and phone interview to verify care needs (LE reports not required but accepted) Time to close 30-60 days Compensation based on face value of policy (agents must comply with their specific state licensing requirements)

6. Enrollment Example #1 Case Study: 37651290D Policy owner: 86 Male Policy value: $90,000 (UL) Lapse Value: $0 Cash Value: $0 Assurance Benefit: $31,500 or 30% of death benefit Enrollee approved for $31,500 total benefit with $1,800 per month payment to care provider for duration of benefit period. $4,500 Final Expense benefit issued at maturity.

7. Enrollment Example #2 Case Study: 14793181H Policy owner: 70 Male Policy value: $250,000 (term) Lapse Value: $0 Cash Value: $0 Assurance Benefit: $150,000 or 60% of death benefit Enrollee approved for $150,000 total benefit with a $30,000 initial benefit payment to cover first three months of care and $10,000 per month payment to care provider for duration of benefit period. $5,000 Final Expense benefit issued at maturity.

8. Long Term Care Benefit Plan Structure: Policy ownership is transferred to fund the Long Term Care Benefit Account. The Benefit Plan is held as an irrevocable, FDIC insured benefit account established at a nationally chartered Bank & Trust company. Monthly benefit payments are paid directly to the long term care provider chosen by the account holder.

9. Regulatory Structure: Policy Transfer- Adheres to secondary market regulations governing life settlement market. Benefit Account- Adheres to Banking regulations. Use of Funds- Adheres to Medicaid regulations. Available- All 50 states

10. Policy Conversion Bills introduced (as of 11/13): TX- HB 2383 (enacted into law) CA- SB 214 FL- HB 535 KY- HB 314 LA- HB 545 MA- SB 1909 ME- LD 1092 NJ- A 4168 NY- A 7952 PA- TBD Grants Medicaid Department authority to educate citizens they have right to use life policies to pay for any form of care they select. Specifies Benefit Plan requirements to qualify must be an irrevocable, FDIC insured account that makes payments directly to the care provider; the person must be able to choose the form of care they want; a funeral benefit must be preserved; and if there is any unpaid account balance when the person dies it must go to the designated account beneficiary.

11. Sample of Participating Long Term Care Companies

12. In the NEWS

13. Wall Street Journal- States Ease use of Life Policies to Pay for Long Term Care (June 16, 2013): State lawmakers are encouraging elderly residents to use life insurance as a way to pay for long-term care—and lower the Medicaid tab in the process. States hope to stop people from dropping their life-insurance policies in order to qualify for Medicaid. To keep policy owners from spending settlements frivolously, the bills generally require that the money go straight to an irrevocable bank account used solely to pay for long-term care. "This focuses on middle- class policyholders with coverage worth $100,000 on average," said Chris Orestis, chief executive of Life Care Funding LLC of Portland, Maine. "They're not wealthy enough to pay for long-term care for a long time, and they're not poor enough to qualify for Medicaid right away." New York Times- A New Way to Pay for Long Term Care (October 9, 2013): I was visiting an assisted living facility recently with my sister, whose disability made that a prudent choice, when the marketing manager handed us a brochure. It asked, “Did you know a life insurance policy can pay for long-term care expenses?” Life Care Funding, said Chris Orestis, the chief executive, pays older adults an average 40 to 45 percent of a policy’s face value. Life Care Funding puts the money in an F.D.I.C.-insured account used to send monthly payments directly to a long-term care provider: a nursing home or assisted living facility, an adult day program, a home care agency, a hospice, an individual hired privately for home care. You can switch from one provider to another as your needs change, but you can’t use the money for a vacation (or blow it at a casino).

14. As Seen In: “Long-term care is the sleeping giant of all U.S. social problems. It is most certainly the biggest age-related challenge our country faces.” – National Endowment for Financial Education