1. Establishing and Creating the Plan for Care John Fontana 1

2. The Goal of the Planning Process Is to teach you … How to ask the right questions. How to establish a discussion with a client based on reasonable beliefs. How to establish and finance a plan of care. 2

3. The Fact Finder Accomplishes a Number of Objectives Establishes credibility by focusing on a plan not the sale of a product. Gathers the critical information necessary to recommend ideas on who will provide the care and where it will be delivered. Creates the parameters for recommending the correct type of policy and benefits. Helps to qualify your clients both financially and physically. 3

4. Asking the right questions... Helps you understand the clients concerns, emotions and feelings. Establishes your clients motives for purchasing LTCi. KEY POINT: Your clients want to be heard. 4

5. Your clients will exchange a check for a feeling. 5

6. Fact-finding questions... Have you had any prior experience with someone who needed LTC? Is it important for you to maintain your independence in the community without placing a burden on your family? Are you concerned that a chronic illness will threaten your commitment to continue to provide for your spouse? 6

7. Fact-finding questions... Is it important to control the quality of care that you receive and where it is delivered? Is it important to preserve your assets and income? Will you have a continuing financial obligation to any of your children or grandchildren that have personal problems or are physically or mentally challenged? 7

8. Fact-finding questions... If you are in a second marriage is it important to distribute your assets to your children according to your will or prenuptial agreement? Before I got here you probably had a conversation on long-term care, would you share your thoughts with me? When you hear the words long-term care what do you think of ? 8

9. Key point... After asking these questions repeat any of the motives that your client has for considering LTCi. These are your clients concerns and it is your responsibility to find a solution to them. 9

10. “What does your money mean to you?” Security/Lifestyle Happiness/Piece of Mind Comfort/Freedom 10

11. 11 New definition … Long-term care is not a place … … it’s an event Post-retirement disability Functional disability 11

12. 12 “Functional disability” Physical Activities of Daily Living (ADLs) Bathing, dressing, transferring, eating, toileting, continence “Stand-by” help with 2 OR Mental Cognitive Impairment Alzheimer’s, dementia, stroke, head injury Requiring supervision 12

13. 13 Long-term care is a continuum of care, housing and services people and their families may need because of a chronic illness. It’s assistance with so called activities of daily living (explain) or supervision caused by severe cognitive impairment. The goal is, whenever possible, to have the individual remain within the universe that he/she has created. 13

14. Why is Long-Term Care a Problem? We are living longer! 14

15. Unchanging Realities People will live a long life Disability in retirement is a reasonable possibility Care is expensive Clients can’t afford it Ever … and continue to keep their financial promises 15

16. Step 1: Establishing the need for LTC because of longevity… “ LTC is a problem today because people are living longer. Wouldn’t you agree? If you take reasonable steps to take care of yourself, you are likely to live a long life. Even if you don’t take care of yourself some new medicine or procedure is likely to be developed that will extend your life. When you live a long life you could need care. Could this happen to you?” 16

17. Key point... It is important that your client agrees that he/she will live a long life AND when they do live a long life then there is a reasonable likelihood that they will need care. Never assume that the client understands. Listen to what they say. Listen to their conviction or lack of it. After they agree ask... 17

18. Key question What consequences will providing care for an extended period of time have on your family’s emotional, physical and financial well-being? 18

19. Consequences to families… Stress of care giving hikes older adult mortality rates. Caregiver can become as chronically ill as the patient. Caregivers suffer from stress related illnesses. Long-term care tends to tear families apart because the responsibilities of providing care is not shared equally. 19

20. Engaging the client...Step 2 “ When you live a long life and need care your family will do everything in their power to keep you out of a facility.” If the client is married look at his spouse and ask: “ If your husband needed LTC would you do everything that you could to keep him out of a facility?” 20

21. “If you need care your wife will take care of you, but there is a cost to that care. Think of it this way. She will be under a tremendous amount of stress being a caregiver. What will that stress do to her? How will that stress affect her health? What’s your plan to protect her?” 21

22. LTC is a children’s problem “Your children will do everything in their power to keep you out of a facility. What effect will that have on their lives?” “ What effect will the stress of care giving have on their health and the relationships that they have with their families? Brothers and sisters? What’s your plan to protect your children?” 22

23. What’s your plan to protect your family? 23

24. The plan is to stay in the community for as long as possible without devastating your family’s emotional, physical and financial wellbeing 24

25. The plan depends on the family… Single individuals Married with no children Married with children Second marriages 25

26. Plan of care… Home Care Assisted living CCRC QB 26

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28. How to fund the plan of care? $20 per hour x 8 hours = $ 160 per day $20 per hour x 10 hours = $ 200 per day $20 per hour x 12 hours = $ 240 per day $20 per hour x 24 hours = $ 480 per day 28

29. The client begins to realize... Long-term Care is a Family Issue. 29

30. Key point... It is important that your client agrees that living a long life and needing care will have serious consequences to his family Never assume that the client understands. Listen to what they say. Listen to their conviction or lack of it. Move on to Step #3. 30

31. Step 3…What Pays for Long-Term Care? MONEY Qualified Non-Qualified 31

32. THE POWER LONG-TERM CARE Planning 32

33. “I can self insure” The cost of liquidating qualified funds to pay for care. The loss of investment opportunity on funds liquidated to pay for care. Assets that are difficult to convert without severe tax or market liability. Preservation of principal. 33

34. People have continuing commitments…...lifestyle of surviving spouse...care for children or grandchildren...protection of legacy assets...to their place of worship What happens if they need care? 34

35. Key point... Couples live on income not principal. 35

36. 36 $1,000,000 = $ 40,000 $1,500,000 = $ 60,000 $2,000,000 = $ 80,000 $3,000,000 = $120,000 36

37. 37 What percentage of that income do you think is committed to lifestyle? 37

38. 110% 38

39. “Would you like to pay for your care with income and principal or interest?” 39

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48. “Take the loss you can afford.” 48

49. $3,000,000 $180,000 $120,000 $5,000 49

50. “I can’t assure you that if you need care over a period of years, the income stream will be sufficient to support your lifestyle and pay for care at the same time.” 50

51. Unintended invasion of principal 51

52. What have you allocated from your income and retirement portfolio to pay for your plan of care? 52

53. Long-Term Care Insurance Home care benefits Assisted Living Facilities Reimbursement, Indemnity or Cash Limited pay options (10 Pay) Care Co-ordination Shared Care BENEFITS will pay for 53

54. How to fund the plan of care? $20 per hour x 8 hours = $ 160 per day $20 per hour x 10 hours = $ 200 per day $20 per hour x 12 hours = $ 240 per day 54

55. Long-term care insurance Provides income to be used to pay for care your family will find most time consuming and stressful. Provides income that allows your spouse to maintain her relationship with you and supervise your care. Provides income that allows your children to maintain their relationship with you and supervise your care 55

56. 56 Life insurance  Disability income  Annuities  LTCi  Guarantees income  Guarantees income  Guarantees income  Guarantees income  Which preserves lifestyle 56

57. Long-Term Care Insurance allows your retirement plan to execute for the purpose which it was intended: RETIREMENT 57

58. Our clients goal is to live a life of significance… Do they want to leave a legacy of dependency after living a full and significant life? Do they want to cause financial and emotional stress to the families that they have spent their lives building and loving? 58

59. Planning for care… 3 Choices Make a bet (avoid & hope) Have a plan with an allocation of income and assets (unintended invasion of principal) Have a plan with a transfer of risk 59

60. What’s your plan to protect your clients retirement income/portfolio and family? 60