series 4 6

7/28/2019 Series 4 6

1/7

The Five Biggest Threats to a Secure Retirement

To Buy or Not to Buy... That is the Question.

Brought to you by

Gary L. Williams

CRD # 4699628

7/28/2019 Series 4 6

2/7

Could Tis Happen to Your Family?

Mary Delani was a vibrant, healthy 79-year old until the day she slipped and ell inher home. On that ateul day, she ruptured a disc in her back. The ormerly inde-

pendent retiree was suddenly in a great deal o pain and unable to complete dailyroutine tasks. Due to her age and bone loss condition, surgery wasnt an optionand she was unable to recover as hoped. With the resulting loss o mobility, herstrength spiraled downward. She could no longer clean her own house or preparemeals. Within a years time, she needed assistance with bathing as well.

At rst, Mary daughters shared the responsibility o helping her mother every day,but it was a huge burden on top o her own amilys needs and other responsibilities.When they realized the situation wasnt temporary, they hired a home healthcarenurse to ease some o the burden but it cost them roughly $700 a week or part-time

assistance. They researched assisted living acilities and ound that it cost roughly$3,500 every month. Mary didnt have that kind o money but she also didnt qualiyor Medicaid assistance. It was a no-win situation.

The Five Biggest Threats to a Secure Retirement - Long-Term Care Insurance

7/28/2019 Series 4 6

3/7The Five Biggest Threats to a Secure Retirement - Long-Term Care Insurance

A Growing Concern for the Boomer Generation

Unortunately, many seniors have similar stories. And the problem is growing. The largest groupin America is the Baby Boomer generation. Roughly 78 million Americans were born between1946 and 1964. According to the American Association or Long-Term Care, many boomers willall so ar into poverty (as they try to pay or their long-term care out o pocket) that they willeventually qualiy or Medicaid the medical care program or deeply impoverished people.

Is Long-erm Care Insurance a Smart Solution?

Like many products, long-term care insurance (LTCI) policies have pros and cons. On the upside,

LTCI policies allow seniors to minimize dependence on amily members while at the same time

preserving their savings. They allow amily members the peace o mind o knowing their elderly

loved ones can aford quality care. And, in general, they can help make a very stressul situation a

bit easier. The downside? LTCI is expensive. The number one reason people dont buy it is because

they cant aford it. In act, the U.S. Census (July, 2011) counts more than 311-million Americans.O that enormous number, only about eight million (less than 3 percent) have any long-term-care

protection. The low participation rate is largely due to the products high cost.

Is LCI a Good Solution for You?

he following pages provide objective information to help you decide.

7/28/2019 Series 4 6


What is Long-Term Care Insurance?

LTCI is a type o insurance policy that covers basic daily needs over an extended period o

time. While health care insurance or Medicare helps pay or immediate medical expenses(or example, a surgeons bill), long-term care insurance helps with the cost o chronic ill-

nesses, such as Alzheimers disease, or various disabilities. The policies pay or assistance with

everything rom the basics bathing and dressing to skilled nursing care and therapy.

Doesnt Medicare Cover It?

No. Medicare and other health insurance policies do not cover most long-term care services.

Thats because LTCI is NOT medical insurance. It is insurance that pays or assistance with every-

day lie unctions. Because Medicare and your health insurance likely do not cover long-term

care expenses, planning or how you might pay or daily living becomes even more important.

What are the Chances Youll Need Long-Term Care?

Each of us faces a 70% chance of needing long-term care

services at some point during our lives after turning age 65,according the National Clearinghouse for Long Term CareInformation. Additionally, there is a 40 percent chance thatsomeone who has reached 65 will enter a nursing home.The average stay in a nursing home is two and half years(according to stats compiled by Morningstar).

What Happens if You Need the Care But Dont Al-

ready Have the Insurance?

I you get sick or injured and need some type oskilled or nursing home care, but you dont haveLTCI, the expenses would need to be paidrom you or your amilys personal assets.Government assistance (Medicaid) wouldusually NOT kick in until your assets arevirtually depleted, along with your

spouses assets.

What You Need to Know

7/28/2019 Series 4 6

5/7

How Much Does LTCI cost?

The American Association or Long-Term Care Insurance says people should expect to pay

an average o $3,335 per year to cover a healthy 60-year-old couple on a plan that pays out a$150 daily benet or up to three years. But prices vary dramatically, depending upon actorssuch as your age, the level o infation-adjustment protection and whether the daily benet

will be $100, or some larger amount, such as $150 or $200.

Why is the Coverage So Expensive?

If you get sick or injured and need some type of skilled or nursing home care, but you donthave LTCI, the expenses would need to be paid from you or your familys personal assets.Government assistance (Medicaid) would usually NOT kick in until your assets are virtuallydepleted, along with your spouses assets.

The Five Biggest Threats to a Secure Retirement - Long-Term Care Insurance

Cost Comparison

55 (single) preerred health

Age

55 (couple) preerred health

(with shared care option)

60 (couple) preerred health(with shared care option)

65 (couple) preerred health(with shared care option)

Yearly Cost*

Ave. $1,720$1,428 - $2,552

Ave. $2,700$2,027 - $3,574

Ave. $3,335

$2,700 - $4,204

Ave. $4,433$3,815 - $7,129

Immediate Value

$170,000

$340,000

$340,000

$340,000

Value at age 85

$418,000

$836,000

$708,000

$611,000

Value at age 80

$354,000

$708,000

$611,000

$533,000

Calculations based on: $150 daily benet selected at inception o plan, 3-year benet period, 90-day elimination period, 100 percent home care benet and 3percent infation compounded annually. Includes spousal discount (where applicable) and preerred health discount (when indicated).

Equals available cash value o benets that would be paid or claim starting at present age (an almost immediate claim). Policies ranged rom $162,000 to$200,000 in initial benets.

Equals available cash value o benets that would be paid based on 3 percent annual compound growth o policy benets.

Shared care options vary rom company to company. For illustration purposes, this example assumes access to a combined, total pool o unds

*

Source: 2012 Long-Term Care Insurance Price Index, American Association or Long-Term Care Insurance

The table below compares the costs and coverage ofered in a sampling o long-term-care insurance policies.

7/28/2019 Series 4 6


Is LTCI Worth Buying?

Experts say LTCI can be a huge help, but its ar rom a perect solution to all problems. Forexample, some LTCI policies have a three-year benet period (meaning they cover three yearso care), but many people need care or longer than three years. Additionally, todays policieshave more restrictive policy language to help limit the insurers risk. When deciding whetherto buy or not to buy, make sure to consult a proessional advisor, who can help you assessyour complete nancial picture beore making a decision.

7/28/2019 Series 4 6

7/7

series 4 6

Documents