Did you know a life insurance policy can pay for Senior Care? Long Term Care Benefit

Transcription

1 Did you know a life insurance policy can pay for Senior Care? Long Term Care Benefit

2 Are you ready to pay for your care? 10,000 Baby Boomers Turn 65 every day 70% will need long term care; 40% in a Nursing Home 60% incorrectly believe Medicare pays for Assisted Living or extended Skilled Nursing care 75% will exhaust all their savings in less than one year paying for Long Term Care 2

3 Seniors in the U.S. own approximately $500 billion of life insurance But.. Very limited options to access value in a policy 88% 38% of policies lapsed or surrendered for little or no value Can t afford premiums? Need to qualify for Medicaid? of Medicaid applicants must liquidate policy to qualify Stop paying premiums and lapse or abandon policy for no value Surrender policy back to insurance company (usually less than 10% of face value) There is a better solution: 3

4 Convert a Life Insurance Policy into a Long Term Care Benefit to pay for Senior Care and Housing Assisted Living In Home Care Skilled Nursing Memory Care Independent Living Related Senior Care Services

5 Did you know that you own your life insurance policy? A life insurance policy is personal property just like a home or stocks. Justice Oliver Wendell Holmes Supreme Court case Grigsby v. Russell (1911) 5

6 Why consider this option? Most people purchase life insurance to protect loved ones but over time circumstances change. Kids grown and independent Premiums a burden Preserve other investments (Stocks/Bonds) Do not want to sell your home Applying for Medicaid Increasing need for care 6

7 How does it work? Convert a Life Insurance Policy into a Long Term Care Benefit Value of policy is deposited into an FDIC insured, irrevocable benefit account Automatic payments made tax free directly to the care provider of your choice Monthly payments can be adjusted to address changing care needs Funeral benefit preserved for family Conversion complies with all state life insurance/life settlement regulations Any remaining balance paid to family or beneficiary

8 Who can take advantage of a Long Term Care Benefit? TYPE OF POLICY Most categories of Life Insurance can be converted: Term, Universal, Whole, Group life. SIZE OF POLICY Any policy with a death benefit of $50,000 or more. TYPE OF CARE Assisted Living Home Healthcare Private Duty Home Care Skilled Nursing Memory Care Independent Living Related Senior Care Services 8

9 Tax Free and Medicaid qualified spend down Tax Free Benefit in most cases If the insured is chronically ill, the proceeds will not be subject to U.S. federal income tax so long as they are used solely to pay for qualified long-term care services. The current estate and gift tax exclusion is more than $5 million. Therefore, unless the insured has an estate in excess of the exemption, any residual amount of the Long Term Care Benefit which remains in the account when the insured dies may pass to the account beneficiary(-ies) tax free. Medicaid and VA Qualified Spend-Down in most cases Because the policy is sold for its fair market value, and the funds are protected in an irrevocable account that is only used to pay for long term care services it is a Medicaid qualified spend-down. Please note that the actual tax treatment of the proceeds from the sale of a life insurance policy will depend on many factors, including but not limited to who owns the policy, the health of the insured, the use of proceeds, the size of the estate and the state in which the policy owner lives (for purposes of state taxation). This material does not constitute tax, legal or accounting advice, and neither Life Care Funding, LLC nor any of its agent, employees, or representatives are in the business of offering such advice. The information above cannot be used by any taxpayer for the purpose of avoiding any IRS penalty. Anyone interested in selling a life insurance policy in order to fund Long Term Care Benefits should seek professional advice based on his or her particular circumstances from an independent tax advisor. 9

10 Long Term Care Benefit Enrollment Example #1 Case Study: H Policy owner: 70 Male Policy value: $250,000 (term) Lapse Value: $0 Cash Value: $0 LTC Benefit: $150,000 or 60% of death benefit 10

11 Long Term Care Benefit Enrollment Example #2 Case Study: A Policy owner: 73 Female Policy value: $100,000 (universal life) Lapse Value: $0 Cash Value: $0 LTC Benefit: $35,000 or 35% of death benefit 11

12 The Long Term Care Benefit is a win-win proposition Consumer Fund long term care expenses No additional premiums to pay No fees or charges Keeps them off Medicaid Any remaining balance paid to designated beneficiaries Care Provider Increase Occupancy and Revenue Increase affordability for prospective clients Pay off outstanding balances for current clients Private pay source of funds No administrative burden or fees 12

13 13 Life Care Funding Trusted Partners

14 Extensive Protections for your Clients State Insurance Regulator Policy Compensation ICB Broker/Agent Proceeds Policy Advice Features Proceeds Insured/Client/Consumer All transactions reviewed by a licensed Provider Authorization by all beneficiaries Irrevocable, FDIC- Insured Account Automatic Monthly Payments Residency Senior Care Senior Care Community Home Health Care Provider Irrevocable account Rescission rights Senior Care Service Provider 14

15 Using life insurance to pay for long term care in the News October 9, Life Care Funding puts the money in an FDIC insured account used to send monthly payments directly to a long term care provider... 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). 15

16 Which clients can use the LTC Benefit 1. Owners of a life policy $50,000 and above in danger of lapse/ surrender; premiums about to blow up, term about to end 2. Families with an immediate need to fund care for a loved one 16 a) Current clients (or their parents) that want to remain private pay rather than go on State assistance b) Past automatic declines for an LTCi policy c) The parents of someone you are selling an LTCi policy to d) Parents or attendees of your current seminars and workshops e) If you have existing relationships with CPAs or Attorneys their clients are a good prospect pool f) If you have current AL or HHC community relationships you can help their resident remain private pay longer

17 Client Profile: Immediate need for senior care Assisted Living, Home Care, Skilled Nursing or Hospice LE of 5 years or less Most have more than 1 condition and in some cases multiple Average Age is 76 but the span is Most have multiple ADLs Fall risk or history of Multiple falls Loved ones providing care but misinterpret person to be fine or able to live alone and care for themselves 65% Adult children is point of contact or decision maker 11% spouse 9% self 4% sibling 17

18 Health conditions Typically receiving care or in immediate need of senior care: Heart Disease Cancer Stroke COPD/Pneumonia Alzheimer's/Dementia/Pick s Disease Diabetic complications Parkinson s with cognitive issues Kidney Failure History of UTIs Weight is a co-morbid condition low BMI with difficulty eating 18

19 Contracting paperwork 1) Contracts reviewed & confirmed and E&O coverage issued (no charge for financial and legal professionals). 2) Private label marketing materials customized with the appropriate logo and contact information you request. 3) Access to the online training portal with all FAQs, sales tips, videos, how to approach clients and prospects 4) Turn-key mail and marketing kits to generate leads 5) Help Desk for all Cases 19

20 Marketing Support Contracted professionals are supplied with application packet and customized marketing materials that easily explain the program. Business logo and contact information is inserted into the following materials: 3-Minute Overview Chalkboard video PDF one page flyer overview PDF Frequently Asked Questions (FAQ) Tri-fold brochure Mailer and postcards Template Press Release Consumer Power Point presentation with script Talking Points to add to websites and marketing pieces Webinar support for office staff can be scheduled on request for contracted professionals. 20

21 21 Customized marketing materials

22 22 Free members only web portal

23 Referral sources and pitch 23 CPAs, Financial Advisors and Current Referral Sources: Private pay source of funds, use an asset that may otherwise be abandoned or surrender for little or no value Private Duty Home Care companies, franchise or individually owned: Increases your revenue by addressing affordability issues LTC Benefit Plan Private pay source of funds Medicare Reimbursed (Medical) Home Care companies: Improved medical outcomes, prevents re-admissions More funds for overall care (Private Duty) results in better outcomes, reduces readmissions to hospital Assisted Living, Independent Living Communities, SNF: LTC Benefit Plan is source of private pay funds Keeps people off of Medicaid

24 Client application process The agent will follow a SIMPLE and QUICK process 1) Application (est. 10 minutes) Simple application (2 pages) Signed HIPAA and Insurance Authorization Forms Provide available policy and medical information 2) Underwriting: APS review and phone interview (est. 7 business days) 3) Enrollment: Packets sent to agent to present to family (est. 3 weeks) HELP DESK available 24

25 LTC Benefit Qualification Form Benefit Qualification Form Long Term Care Benefit Plan PERSONAL INFORMATION OF INSURED Name: DOB: Gender: Marital Status: Best contact person: Relationship to Insured: Address: City: State: Zip Code: Phone: Cell: Best time to reach you: address: NEED FOR ASSISTANCE TO PERFORM THE FOLLOWING ACTIVITIES OF DAILY LIVING? (check all that apply) Walk Dress Grooming (combing and shampooing hair, shaving, brushing teeth) Transfer (ability to get in and out of a chair and/or bed) Bath/Shower Toileting (on and off, to and from) Incontinent Bladder Incontinent Bowel Eating (does not include meal preparation) Manage and take medications DOES THE INSURED HAVE ANY OF THE FOLLOWING DOCUMENTS IN PLACE? Advanced Medical Directive/Living Will DNH (Do Not Hospitalize) Order Power of Attorney DNR (Do Not Resuscitate) Order Receiving Hospice Care FAMILY STORY Please provide as much background information on the current status of this case to help us understand the situation. Please include information regarding the insured s health and care needs including how they plan to utilize the proceeds from this transaction. POLICY INFORMATION Insurance Carrier Name: Face amount (Death Benefit): Annual Premium: Outstanding Loan: Beneficiary: Type of Policy: Universal Life Whole Life Term Life Group Life Other MEDICAL INFORMATION Primary Care Physician s name and phone number: NOTE SECTION / SPECIAL INSTRUCTIONS Other physicians and specialists, please include their phone numbers: List primary medical conditions: NEED FOR LONG-TERM CARE SERVICES Assisted Living Homecare: Private Duty Homecare: Family Caregiver Skilled Nursing Memory Care Hospice TIMEFRAME FOR CARE: Immediate Within 3 months Within 6 months Longer Submitted by Contracted Professional 25 WHERE IS CARE CURRENTLY BEING RECEIVED OR WILL BE RECEIVED? Facility Home (Please provide individual or vendor providing care and relationship) Name: Address: City: State: Zip Code: Phone: Relationship: Current resident of above? Yes No Phone Number Writing Number Date The information contained herein is complete and accurate and may be relied upon to determine eligibility and pricing factors for an intended Long-Term Care Benefit Plan.

26 Working together to fund senior care Don Poole Chief Marketing Officer Life Care Funding Phone number: (215) Cell: (914) Lisa Barram Marketing Consultant/Case Support Phone number: (215)