Life changes. Your plans don t have to.

Transcription

1 John Hancock Life Insurance Company (U.S.A.) Life changes. Your plans don t have to. LTC /12 Rev. 7/13 Long-Term Care Insurance

2 A successful future begins with a plan. You may be busy building a career and raising your family. Or, maybe you re nearing retirement and looking forward to finally living your dreams. No matter what your situation, a successful future starts with careful planning to ensure you have the funds that will enable you to live life on your terms. That s why, in addition to your savings and investments, your financial plan should prepare you for whatever challenges life brings in the years ahead, including the potential need for long-term care. If you haven t considered how the need for long-term care can impact your income, your assets, your quality of life, and your family s well-being, maybe you should.

3 What is long-term care? Long-term care is the type of ongoing assistance and/or supervision you may need when you are unable to perform normal daily activities on your own, such as bathing, dressing, eating, toileting, or getting in and out of bed. The need for long-term care can arise from physical limitations or a cognitive impairment, such as Alzheimer s disease. Who needs long-term care? Although you may require long-term care at any point during your life, due to accident or illness, it is most often associated with aging, and for good reason. People are living longer than ever the current life expectancy for a 50-year-old today is 78.8 years for men and 82.5 years for women. 1 And the longer you live, the greater the likelihood you ll need care. It is estimated that 70% of people over age 65 will require some period of ongoing assistance at some point in their lives. 2 And, if you were to need care while you re still young, the costs associated with care may impact your ability to pay your mortgage or your child s college tuition. 1. National Vital Statistics Reports, Volume 58, Number 21, June 28, U.S. Department of Health and Human Services, National Clearinghouse for Long-Term Care Information, accessed July 1, 2013.

4 Where is long-term care received? Long-term care has evolved considerably over the past few years. Today, there are many options where you can receive care. Once just associated with nursing homes, the good news is that most long-term care (about 80%) is provided in a familiar setting 3 either in the home of the person receiving care or at a family member s home. This can be explained by the fact that most long-term care is unskilled in nature, so it s easily received at home. One scenario might be that an aid comes to your house every morning to help you out of bed and assist you in getting dressed. In addition to home care, long-term care can be received in the following settings: Adult day care center Nursing home Assisted living facility Hospice facility 3. U.S. Department of Health and Human Services, National Clearinghouse for Long-Term Care Information,

5 How much does long-term care cost? Unless you have direct experience with a long-term care situation, you may be unaware of its cost. The numbers may surprise you. Results of John Hancock s 2013 Cost of Care Survey 4 $94,000 John Hancock s 2013 Cost of Care Survey revealed that the national average for 24-hour home care or one year in a nursing home can run more than $94,000 or $258 a day for a private room. The expenses associated with assisted living facilities are also high, with the national average at approximately $41,124 annually, which is over $3,400 a month. Even care received at home may challenge your budget, with a national average of $29,600 a year for care received six hours a day, five days a week. If home care is needed around the clock, costs can surpass those of nursing home care. These costs can be much higher depending on where you live. $41,124 Nursing Home Assisted Living Facility $29,600 Home Care Annual Long-Term Care Costs Keep in mind Care can be needed for a number of years, which may impact even substantial savings. For additional information on costs in your area, visit our Cost of Care Map at 4. John Hancock 2013 Cost of Care Survey, conducted by LifePlans, Inc.

6 How will I pay for care? Your options may be more limited than you think. For example, you may believe that long-term care is covered by your existing health or disability insurance or that the government will cover the bills. Unfortunately, that s not necessarily the case. Government programs In addition to their limitations, it s important to consider whether you want to rely on government plans to pay for your long-term care needs. Both Medicare and Medicaid pay for some long-term care but these programs may be inadequate for your particular situation. Medicare Medicare, like most health insurance, is primarily meant to cover acute illnesses. It does pay some long-term care expenses, but there are limitations and you must be age 65 to qualify. Some benefits are payable for the first 100 days per benefit period in a skilled nursing facility, if you enter within 30 days after a hospitalization of at least three days, if you are receiving skilled care, and if you re continuing to get better. However, many conditions requiring long-term care services do not require hospitalization or skilled care. Medicaid Medicaid 5 is a state-based program that pays for a large portion of the nation s long-term care expenses. Most state laws require that you spend down your assets to poverty levels before you become eligible for benefits, and income limits also apply, 6 impacting you and your family members. However, Medicaid may also limit your options as to where you can receive care, as well as the type of care you receive. The federal government makes its intentions clear. Your Social Security statement says: Medicare does not pay for long-term care, so you may want to consider options for private insurance. 5. Medicaid eligibility is complex and varies by state. Contact your local Medicaid Office for complete information. 6. Medicaid spend-down limits vary by state.

7 Health and disability insurance Health insurance is intended to pay for acute or short-term illness. It will not provide reimbursement for informal care over an extended period. Disability insurance is meant to replace your income when you are unable to work, but does not provide additional benefits for nursing homes or other care settings. Paying out-of-pocket Although you may be willing to pay out-of-pocket for your care, consider the projected annual costs in 30 years, when you are more likely to need it. Based on the expected increases in the cost of care, the approximate annual costs for care will range widely, depending on the care options you choose: Q Q $102,000 for care received in a home setting 7 Q Q $141,000 for care received in an assisted living facility 7 Q Q $323,000 for care received in a nursing home 7 If you need care for a number of years, your costs may be considerably higher. Even if you can afford to pay for care out of pocket, you may want to ask yourself if that s really how you want to spend your savings. 7. Projected increases are calculated using 9-year increases, based on a comparison of data collected from providers across the country for John Hancock s 2007, 2008, 2011, and 2013 Cost of Care surveys. Information available from John Hancock upon request.

8 Why long-term care insurance? Just as you insure against other risks, you may wish to consider adding long-term care (LTC) insurance to your financial plan. Helps to protect your income and assets The need for long-term care may have an immediate impact on your finances if you need to use your income or savings to pay for care. LTC insurance helps you to: Preserve your income so that you and your loved ones can continue to meet everyday expenses without interruption Protect the assets you ve worked so hard to acquire Provides choice and control when you need care An LTC insurance policy may help give you control over important care decisions by providing: Coverage in a variety of settings, including at home, in a nursing home, or assisted living facility A wide range of home health care benefits that allow you to receive care in a familiar setting for as long as possible Flexible benefit options to meet your specific care needs

9 Provides valuable resources, support, and advice If you should need long-term care services, you need access to dependable resources that you and your family can rely on. A John Hancock LTC insurance policy can provide: A plan of care customized to meet your needs and preferences Access to discounts on care provider services, to help maximize your benefit dollars 8 Access to quality reports and information on providers and facilities in your community Professional, compassionate support when you need it most Caregiver Support Services 9 that provide caregiving and planning assistance should you ever be called on to care for a member of your family More quality time for you and your family In today s busy world, family members and friends may live far away or have other responsibilities that make it difficult for them to do as much as they might like. With LTC insurance, you may be less dependent on family members for financial or physical assistance. That way, the time you do spend together can be more rewarding and enjoyable. Why people buy LTC insurance 10 According to a recent survey of consumers, the following explanations were given when asked to provide reasons for purchasing a LTC insurance policy: 95% To avoid being a burden on my family 95% To cover the financial costs for receiving long-term care 93% To receive care where I choose, such as the ability to stay home longer rather than move to a facility 93% To make sure I get high quality nursing care should I need it 92% To make sure I have overall control over making decisions about my care 8. Discounts vary by provider and may be discontinued by the provider at any time. 9. Caregiver Support Services are available after your policy has been in effect for 30 days through a partnership between John Hancock and an independent third-party organization. Discounts and/or program may be discontinued at any time. 10. Based on John Hancock s 2011 Consumer Survey conducted by Mathew Greenwald & Associates, Inc.

10 Why buy now? Don t delay the purchase of this important coverage. There are some very good reasons to consider adding LTC insurance to your financial plan today. Your premiums are based on your age The annual premium that you would pay for a policy bought today may be significantly lower than what you would pay for a comparable policy purchased at an older age. You must be in good health to qualify If you wait too long to purchase coverage, your health may change and you may be ineligible. LTC insurance completes your coverage LTC insurance provides benefits that your health and disability insurance do not include. Owning an LTC insurance policy would ensure you have coverage to help pay for the cost of your care. Planning ahead for your potential long-term care needs is an essential part of any comprehensive retirement plan. If you ever need care, the purchase of LTC insurance may turn out to be one of the smartest decisions you ve ever made.

11 Commitment to our policyholders Backed by one of the most recognized and respected names in the financial services industry, a John Hancock LTC insurance policy represents a promise to provide comprehensive coverage, support and service, when and where you need care. An unwavering commitment to our more than 1.3 million LTC insurance policyholders 11 More than $2 million in LTC insurance claims paid every day 11 More than $4.7 billion in LTC insurance claims paid on our LTC insurance policies since Based on John Hancock internal data from Total includes individual and group LTC insurance, and the Federal Long Term Care Insurance Program. Information available from John Hancock, upon request.

12 John Hancock A name people know and trust With a proud history of more than 150 years, and financial strength ratings among the highest in the insurance industry,* John Hancock is dedicated to providing dependable solutions that help you protect your financial security, your independence, and your family s well-being. *Based on analysis by major rating agencies, such as A.M. Best, Fitch Ratings, Standard & Poor s, and Moody s. Financial strength ratings measure the Company s ability to honor its financial commitments and are subject to change. The ratings are not an assessment or recommendation of specific policy provisions, premium rates, or practices of the insurance company. To view our most current financial ratings, please go to The long-term care insurance policy describes coverages under the policy, exclusions and limitations, what you must do to keep your policy in-force, and what would cause your policy to be discontinued. Contact your Licensed Agent or John Hancock for more information, costs, and complete details on coverage. This is an insurance solicitation. An insurance agent may contact you. Long-term care insurance is underwritten by John Hancock Life Insurance Company (U.S.A.), Boston, MA (not licensed in New York) and in New York by John Hancock Life & Health Insurance Company, Boston, MA Policy Series: LTC-11, LTC-12