a national challenge… long-term care a gap in health insurance exposes a hole in...

A National Challenge…

Long-Term CareA gap inA gap inhealth insurance health insurance exposesexposesa a holehole in inretirementretirementplanning...planning...

Michael E. Wright, CFPWright Financial Advisors, LLC

Registered Representative of and securities offered through OneAmerica Securities, Inc., Advisor.9229 Delegates Row #190, Indianapolis, IN 46240,(317)573-3838, Member FINRA, SIPC, a Registered Investment Advisor. Insurance Representative of American United Life Insurance Company, AUL and other insurance companies.  Wright Financial Advisors is not an affiliate of OneAmerica Securities or AUL and is not a Broker/Dealer or Registered InvestmentAdvisor.

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The Matter in this presentation is designed to provide accurate information with regards to the subject matter covered and is not rendering legal, accounting, or tax advice. For answers to specific questions and before making any decisions, please consult a qualified attorney, tax advisor or other professional to address your specific needs.

Registered Representative of and securities offered through OneAmerica Securities, Inc., Advisor.9229 Delegates Row #190, Indianapolis, IN 46240,(317)573-3838, Member FINRA, SIPC, a Registered Investment Advisor. Insurance Representative of American United Life Insurance Company, AUL and other insurance companies.  Wright Financial Advisors is not an affiliate of OneAmerica Securities or AUL and is not a Broker/Dealer or Registered InvestmentAdvisor.

YOU DO!!!!YOU DO!!!!

Who needsto learn aboutLong-Term care?

What is RetirementPlanning?

WealthAccumulati

on

What’s Missingfrom your

Retirement Plan?

Wealth Preservation

Did you know…Did you know…• Long-term care will affect one in two people?Long-term care will affect one in two people?• Cost between $50,000 - $100,000 per year?Cost between $50,000 - $100,000 per year?• Medicare and traditional health insurance does not pay Medicare and traditional health insurance does not pay

for long-term care?for long-term care?• The average American loses their entire life savings The average American loses their entire life savings

within eleven months ?within eleven months ? LTC.gov, 10/2010; retirement savings report, ebri, 10/2010

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Workshop Objectives

• Teach you about long-term care Teach you about long-term care and your new long-term care and your new long-term care benefitbenefit

• Make you aware of a GAP in Make you aware of a GAP in traditional health insurancetraditional health insurance

• Show how planning for long-term Show how planning for long-term care is related to financial planningcare is related to financial planning

• Financial securityFinancial security• Personal choice and freedomPersonal choice and freedom• Negative impact on othersNegative impact on others• Independence and dignityIndependence and dignity• You love your familyYou love your family

Reasons PeoplePurchase Protection

PlanPlanforforit!it!

Lifestyle

Health Insurancevs. LTCi

Levels of CareLevels of Care• SkilledSkilled• IntermediateIntermediate• CustodialCustodial (needing help with activities

of daily living – ADL’s)

The Gap in Traditional

Health Coverage

Skilled CareSkilled CareMedically neededMedically needed

Intermediate CareIntermediate CareLess frequent skilled careLess frequent skilled care

Custodial CareCustodial CareHelp with ADLs or memoryHelp with ADLs or memory

1st 60 Days1st 60 Days Next 40 DaysNext 40 Days After 100 DaysAfter 100 Days

Covered Not Covered

Covered

Not Covered

Not Covered

Common Causesfor LTC

Health ConditionsHealth Conditionsand Illness:and Illness:• Stroke and Heart Stroke and Heart

AttackAttack• CancerCancer• DiabetesDiabetes• Arthritis and Arthritis and

OsteoporosisOsteoporosis• Alzheimer’s, Alzheimer’s,

Parkinsons Parkinsons and MSand MS

Young or old, LTC insurance picks upYoung or old, LTC insurance picks upwhere your health insurance leaves off.where your health insurance leaves off.

Injuries from:Injuries from:• Auto and motorcycle Auto and motorcycle

accidentsaccidents• Activities like skiing, horse-Activities like skiing, horse-

back riding, divingback riding, diving

““A study by the Department of Health and A study by the Department of Health and Human Services indicates that people age 65 Human Services indicates that people age 65 face at least 50% lifetime riskface at least 50% lifetime riskof needing long-term care.”-of needing long-term care.”-10/201010/2010

What’s the Risk?

You’re NEVER too young

to plan for Long-term care““40% of the40% of the

13 million who need13 million who need

help with basic help with basic

ADLs ADLs

are between theare between the

ages 18 and 64.” ages 18 and 64.”

--longtermcare.gov 10/2010longtermcare.gov 10/2010

A Women’s Issue

• 1 in 2 WOMEN will spendwill spend AT LEAST ONE YEAR in a in a nursing homenursing home

• 1 in 3 MEN will spendwill spend at LEAST ONE YEAR in a in a nursing home -nursing home -longtermcare.gov longtermcare.gov

10/201010/2010

According to the New EnglandAccording to the New EnglandJournal of Medicine:Journal of Medicine:

What is the difference between

Disability andLong-term Care

Insurance?DisabilityDisability• Replaces income• Typically ends at

retirement

Long-term CareLong-term Care• Pays for care• Coverage continues

throughout your life

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Your homeYour homeAssisted livingAssisted living

Nursing homeNursing home

Places You can Receive Long-

Term Care

$100,000a year.”

longtermcare.gov 10/2010

and in some placesand in some placesthe cost can topthe cost can top

$50,000 a year,

“Long-term Carecosts an average ofcosts an average of

Who pays?60%

50%

40%

30%

20%

10%

0%

Medicaid Self &Family

Medicare PrivateInsurance

Other Gov.Program

• Skilled care onlySkilled care only• Medical progress Medical progress

continuescontinues

Medicare

• 3 day prior 3 day prior hospital stayhospital stay

• Joint state and Joint state and federal programfederal program

• Pays for health care Pays for health care from poor (welfare)from poor (welfare)

• Many must “spend Many must “spend down” their assets to down” their assets to qualifyqualify

Medicaid typically will only pay for care in a nursing home

Medicaid

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Spend Down

50% Between 50% Between $21,912 - $109,560 $21,912 - $109,560 $1,823- $$2,739$1,823- $$2,739

IN Medicaid 2011 IN.gov

Assets Income

$1,500 $674

• 1935 – 40 workers to 1 retiree1935 – 40 workers to 1 retiree• 1989 – 3.4 workers to 1 retiree1989 – 3.4 workers to 1 retiree• 2020 – 1.8 workers to 1 retiree2020 – 1.8 workers to 1 retiree

Don’t count onthe

Government

Your health plan does NOT coverlong-term care

• HMOsHMOs• Health insuranceHealth insurance• MedicareMedicare• Medicare supplementsMedicare supplements

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Federal legislation

shows intentHealth & Welfare Reform of 1996Health & Welfare Reform of 1996

Deficit Reduction Act of 2005Deficit Reduction Act of 2005TAX-DEDUCTIBLE premiums & TAX-FREE benefits

• Increased lookback period• Reduced ability to use annuities to shield assets

State Partnership ProgramsState Partnership ProgramsMedicaid spend down protection

CLASS ActCLASS ActVoluntary Government LTCi Plan

Your homeYour homeAssisted livingAssisted living

Nursing homeNursing home

Types of Care LTCi will Pay

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Benefit Triggers

Need assistance with 2 of 6 ADL’sNeed assistance with 2 of 6 ADL’s• Bathing• Dressing• Transferring

The deterioration or loss of intellectual The deterioration or loss of intellectual capacitycapacity

• Alzheimer’s

OR

• Toileting• Feeding• Continence

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Waiver of Premium

Premiums stop when you are Premiums stop when you are receiving benefitsreceiving benefits

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Fixed Premium

Premiums are fixed to the age you Premiums are fixed to the age you purchase coveragepurchase coverage

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What is the Cost of Waiting?

• Lifetime premium payments are Lifetime premium payments are always higher the longer you waitalways higher the longer you wait

• You risk not being able to get You risk not being able to get approved when you apply due to approved when you apply due to pre-existing medical conditionspre-existing medical conditions

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Benefits for Town of

Framingham• Education for employees at a young age Education for employees at a young age

while protection is least expensivewhile protection is least expensive

• ONE-TIME offer of Simplified Underwriting for ONE-TIME offer of Simplified Underwriting for eligible employees & spouseseligible employees & spouses

• Premium discounts for employees, spouses Premium discounts for employees, spouses and family membersand family members

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Plan Design Options

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Long-Term Care Myths

• It’s covered by traditional health insurance It’s covered by traditional health insurance and Medicareand Medicare

• It’s something you look at in your 60’sIt’s something you look at in your 60’s• LTC insurance only pays for a nursing LTC insurance only pays for a nursing

homehome• ““It will never happen to me”It will never happen to me”• Long-term care insurance is expensiveLong-term care insurance is expensive

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Solving the problem

Closing the Closing the HOLEHOLE in financial planning… in financial planning…

Registered Representative of and securities offered through OneAmerica Securities, Inc., Advisor.9229 Delegates Row #190, Indianapolis, IN 46240,(317)573-3838, Member FINRA, SIPC, a Registered Investment Advisor. Insurance Representative of American United Life Insurance Company, AUL and other insurance companies.  Wright Financial Advisors is not an affiliate of OneAmerica Securities or AUL and is not a Broker/Dealer or Registered Investment Advisor.