Farmers Long Term Care Original seminar design by: Benefits Services Inc. Reisterstown, Md.

Do You Need Long Term Care Protection?

Four Major Questions Must be Answered zDo you need it? zCan you afford it? zWhich combination of benefits is right for you? zWhich policy can best provide those benefits for you?

What is Long Term Care? zDay in, day out assistance you need when you have a serious illness or disability that lasts for a period of time causing you to be unable to completely care for yourself zA continuum of care...

Long Term Care Services: More Than Just Nursing Homes zAdult Day Care Centers zRespite Care zHome Health Care Aide zPersonal Care Attendant or Chore Services zAssisted Living Facilities zHospice Care

What Are The Chances of Needing Long Term Care? zAge 55: The chances are 1 in 10 zAge 65: The chances are 4 in 10 zAge 75: The chances are 6 in 10 Source: National Nursing Home Study, National Center for Health Statistics, 1985

Two Aspects of Long Term Care Insurance zHome and Community Based Care zNursing Home Care

What is The Average Cost of Nursing Home Care? zAverage Cost: $100/day 1 zAverage Stay: 2.5 years 1 zAverage Cost of 2.5 years: $100,000 zIn 20 years 2 : $250/day or $100,000/year 1 Source: Department of Health and Human Services 2 Assumes 5% inflation

Four Sources of Funds to Pay for Long Term Care Who Will Pay for Long Term Care?

Medicare and Medicare Supplements zPays less than 8% of Long Term Care costs zCovers only skilled care

Medicaid zRegulations vary from state to state zTo qualify you must “spend down” to government established poverty levels

The Health Insurance Portability and Accountability Act of 1996 zThe Government has sent a clear message that it is your responsibility to take care of your Long Term Care needs.

The Health Insurance Portability and Accountability Act of 1996: A Closer Look zLTC premiums are deductible as a medical expense zLTC benefits received are tax- free zLTC expenses not covered by insurance are deductible

The Health Insurance Portability and Accountability Act of 1996: A Closer Look zEmployers who pay premiums for an employee are entitled to deduct that premium as a business expense, as they do for medical insurance. zPremiums paid by an employer on behalf of an employee will not be treated as income to that employee.

The Health Insurance Portability and Accountability Act of 1996: A Closer Look zSelf-employed individuals can deduct 45% of premiums as a business expense.

Who Will Pay the Cost of Long Term Care? zYour Personal Savings yCan you afford to gamble? zLong Term Care Insurance yShare the risk with the insurance company

What Are The Financial Risks You Face Today? zYour home destroyed by fire: 1 chance in 1,200 zAn auto accident liability suit: 1 chance in 240 zA major medical expense:1 chance in 15 zA major long term care expense: 1 chance in 4 Source: Sadler and Newman, LAN, November, 1993 Each of these risks could result in a loss of $100,000 or more:

Most people have insurance to cover the first three risks – What about the Fourth?

Four Questions You Need To Be Able To Answer zDo you have longevity in your family? zDo you think you could spend down your savings if there was a long term care illness? zDo you think long term care expenses can be one of the single most greatest risks one may face in their lifetime? zDo you want a family member to take care of you? Will they and can they?

Five Factors that Impact the Premium.... zBenefit Length zDaily Benefit zElimination Period zHome Health Care Protection zInflation Protection

The Essential Factors in a Good Long Term Care Policy... zFinancially stable company zGuaranteed renewable zNo prior hospitalization zWell-defined benefit triggers

zNo skilled care requirement zHome Health Care – no confinement zWaiver of premium zCovers Alzheimer’s Disease More Essential Factors in a Good Long Term Care Policy...

The Top Six Reasons Why You Need LTC Insurance zIndependence zHelps protect your family zProvides you with choices zHelps protect your retirement savings and family assets zFavorable tax treatment zPeace of mind

Thank You!