Hello and good evening. It is just about six o’clock here, Central time. I’m going to get started and in just another minute or two, I just want to make sure people have a chance to get logged in. I will be right back with you. Thank you. Well, good evening everybody. Thank you so much for joining me tonight to talk a little or learn a little bit about long-term care. Uh we’ll discuss some uh some information, general information on this. Hopefully uh after this presentation, what I’m what I’m going to be doing is putting up a survey at the end just to see if you would like to have a one-on-one conversation just what this all means for you and your plan, your retirement plan, your health plan. Uh and hopefully again you and I will have a conversation about this. So, we will let me see there’s a big echo on my voice. Let me see if I can switch my microphone uh change on here. How is that any better? Can someone let me know if the echo has improved there? Hopefully there’s a little better but still echoing. I only have three options. Let’s see if the third option does something different. Um but yeah, I’m getting some no echoes. Uh so hopefully I’ll just leave it right where it is. Hopefully there’s no echoing for for most of you. I don’t know uh what that is for uh you specifically there. So anyway, I will get going on here. Uh so we’re learn a little bit about again about a long-term care today. Before I do get started, I will let you know that I uh that we are not able to record these uh presentations and this is for compliance reasons uh that we cannot record, we cannot have listeners record and distribute these as well. Um so just so you know that we are not able to record or even send out the deck or the uh the presentation. We cannot send that out either. So I do have some other presentations coming out up uh so estate planning a lot of the differences between a will and a trust and those important documents of a power of attorney for health care a power of attorney for financial and all those different things that you might need to start planning making sure you have beneficiaries named. Basically, if you are not here uh in the future, who gets your stuff, how does it pass and what is the best things especially when we talk about taxable situations and things like that. So hopefully uh you’ll join me to learn a little bit about estate planning. Then I will be doing IRA planning a little bit more about traditional IRA, Roth IAS, the different tax uh things that might uh be affecting many different people and what types of IAS might be good for you. Maybe you’ve been doing 401ks or traditional IAS. Maybe we should start thinking about Roth IAS if you have not done so already. Conversions from a traditional to a Roth IRA. learn a little bit how that works in your plan. I do have some educational resources available for you. You can see what other webinars are coming up on on uh presentations. Uh whether it’s in your specific area. I am here in Illinois. Maybe you’re in a different state and there might be something more different time zones, things like that that might be convenient for you. You can listen to our invests podcast or Aerys website and blog. Aerys meaning Alliant Retirement and Investment Services. That’s what the Aerys stands for there. But uh again, you do have some um things available to learn a little bit about who we are, what we do. Our commitment is to provide some good advice for you. The biggest thing that I do, the third one there, offer a comp complimentary no obligation retirement plan, you know, estate plan, whatever is important to you for the future of here’s what you have, here’s what you want. Are you on the right path? Is there something that we can do to put you on that path if you are not there now? And learning a little bit about more about investments and uh you know, interest rates. Interest rates, by the way, have really risen a lot lately. And there’s some very interesting things going on right now uh with, you know, economic with the Federal Reserve raising interest rates. I do have some very good interest rate options available. If you are a safe safe investor or have that safe money for some of the terms that I do offer, I do offer some three-year and fiveyear terms. very attractive rates. Uh if it’s a h 100,000 or more, I can get you a three-year interest rate at about 5.6ish. If it is a 5-year guaranteed interest rate you might be looking for, I’m at 6% I just hit. And uh you know, take advantage of some of these. And again, when I put up the survey at the end of the presentation, please say yes if you want to talk a little bit more about that learning a little bit more about the long-term care and we’ll dig in for you specifically. So, please say yes at the end of this of this presentation. My name is Joe Gaspari. I am one of the financial adviserss here with Alliant with the Alliant Retirement and Investment Services team. I do these presentations pretty much every other week, every, you know, twice a month. And it might be in the afternoon, it might be in the evening, just like this one. I might do a topic on long-term care like we’re doing. I’m going to talk about retirement planning, investing in general, estate planning, and all these various topics. I do these presentations and as well do other people on my team. We have about 10 of us that do these presentations around the country. And if you’re going to look up some various topics, what might interest you, you might hear different speakers. Uh hopefully again, I will see you on some of my future ones. So talking about the assessing the risk, people turning age 65 today have a nearly 70% chance of needing some type of care. 20% of 65 year olds uh or older might need care for 5 years or more. 8% 40 to 50 ages 40 to 50 might need some you know with some type of disability might need some type of long care services. So this is not just uh in the later years that we need some care could be you never know what could happen. That’s what this is going to be all about is what is your plan should something medically if you’re still here but if you need assistance who’s going to pay for this how are you going to pay and what’s uh you know how do we you know not take advantage of our family members. You know, sometimes family members have the best of intentions and would love to help mom and dad, but are they capable? Do they have the time and things like that to do that for you? What is long-term care? Ongoing services and support needed because of a chronic health condition. A lot of times it could be cognitive impairment like Alzheimer’s and, you know, many different things. Maybe it was a car accident or anything that could happen, some type of disability that someone might need some care or assistance in those years. Levels of care. We’ll talk about some skilled care. Now, we’re talking with this round the clock. You need someone watching you constantly. Intermediate care, maybe it’s not round the clock, but you might need some skilled nursing or something like that. Custodial care is just maybe help around the house. Maybe you’re still in your home, but you need help with these ADLs, the activities of daily living, eating, dressing, bathing, toileting, transferring continents. These things we’re going to see a few times on here. And I’ll talk about this because these are the item or these uh activities that if you do have a long-term care policy by chance, and how does one qualify to get money out of that? What to be in claim? they call that and that’s typically you might not be able to do two of these six daily things. So if you are having uh trouble doing two of these six a doctor’s note basically saying that you cannot do these you might be in claim and then you can start to get income from your long-term care policy but it’s typically about two of the six daily things that you cannot do that would make you qualify for long-term care. As I go through the presentation here, if you do have any questions about any of these slides, I’ll get to these at the end of the presentation. But if you do think of a question, go ahead and type it in the chat box or the Q&A box, and I will get to those at the end. When you think of it, type away. Those will hold there till the end. Where can you receive care? Many people, the one of the biggest questions if someone’s going to get some type of long-term care policy, do I have to be in a nursing home? Can I be in my own home? That’s many times an option. So maybe you want care in your home. Maybe it’s some type of assisted living facility. It could be adult daycare facility, you know, a 9 to5. Maybe someone drops you off when they go to work and then they pick you up after work. Uh and then sometimes it could be a nursing home. Common misconceptions. I’ll never need long-term care. it won’t be that expensive and we’re going to see some numbers and that it sure certainly can be expensive. Medicare or Medicaid will cover the cost. That’s is certainly a common mis misconception. Medicare does not cover long-term care. Uh Medicare, I’ll say, is a short short-term care. I will certainly uh bring that up here, but medica Medicare is not going to be your long-term care. Medicaid can cover maybe some of the costs, but we’ll talk about how do you qualify for Medicaid. Uh family will take care of you. That’s another misconception is that uh my kids will take care of me. Uh we had a good situation where me and my wife took in my mother-in-law before she passed away. She lived with the two of us for three years. It wasn’t so much of the long-term care. Part of it was financial and part of it was just have someone around for her. Uh we did a lot of the cooking for her, things like that. But uh thankfully we had a home where we were able were able to do that. We have her master bedroom was on the main floor. We had three bedrooms upstairs. And it certainly did work out for us specifically, but that’s not the case for everybody. Caregiving challenges. 41 million people provide unpaid care for their family members. 61% of that is typically women and 34% of caregivers are age 65 or older. They might be retired themselves and there could be even the next one still doing a full-time job helping someone else. So 34.7 hours per week. Four in 10 caregivers consider their caregiving situation to be highly stressful. So this is where do we want to be? Do I want to be a burden on my children or can I plan to have a system set up that if I do have some type of care needed uh if I don’t have enough assets to cover that do I have some type of coverage or insurance for that? Why is it important to have a long-term care strategy? Help protect assets from potentially uh devastating costs. And that’s one of those even some people say, “I think I’m self-insured. I think I can be self-insured. I have enough assets to pay for this.” But long-term care, depending on the length of that long-term care, can be an asset deple uh depending on where and how serious uh the situation is, and it could be anywhere from, you know, 3,000 a month up to 10 or 12,000 a month for for more skilled care. And again, 12,000 a month, that’s $144,000 a year. Even if you had $1.4 million in 10 years, that’s gone. Now, we talk about long-term care. As far as the typical is a 2 to threeearish on an average of someone that might need that skilled care or something. You know, sometimes it’s toward the end of life and maybe it’s not toward the end of life, but uh that typical need is around that 2 to threeyear time period.
Today’s focus number one, we’re going to talk about the potential costs of care in different settings. So looking at just some national, you know, and now this is a few years old on here that we don’t have updated numbers. We’ve tried to get some updated uh numbers for this presentation, but as of a few years ago, homemaker services, someone helping cook, clean, uh almost $5,000 a month. It’s almost $60,000 a year. Uh home health aid, adult day health care. Um that’s the cheapest. That’s the drop off and pickup. Maybe during the, you know, during the 9 to5 hours, maybe just an adult daycare. That’s the cheapest of all of these. Private room and in an assisted living, a semi-private room in a nursing home, and then a private room in a nursing home. Now, we’re talking $9,000 a month, $108,000 per year on some of these costs. So depending on that level of care needed is certainly there’s a varying level of costs on these annual cost of a nursing home care. So where we said that semi-private room was about 94,900 a year. If costs were to rise at a 4% annual rate, sometimes it goes higher than that even that average rate. Uh but you’re looking in 10 years uh you know in 2031 at 141,000 a year uh 2041 now we’re talking over 210,000 a year for that same care but just with inflation on how much these costs rise over time uh cost depending on where you live. This is a big difference on what state you live. You know, when we look at Texas versus uh California on the first one, Texas a little under 48,000, you see Ohio, Florida, uh in California, the highest in this case is $63,000 a year. Uh when we look at the median cost for a semi-private room in a nursing home, now we’re looking at New York is the highest here. It’s well over double of what uh Texas is in this. though again where you live has a is a big difference of what these costs could potentially be. What to look for in a nursing home or other senior living facility. Ask people you trust. Uh there’s a site, you know, medicare.gov. Uh searching for nursing home information on there. Uh compare different facilities, you know, visit them, talk to the residents and their families if possible. Again, if there’s I’m sure there’s some privacy things that you would have to worry about there, but uh just, you know, if you know anyone that has been subject to caring for someone else or a family member that needed some type of long-term care, how did they handle this? Where did they go? What were the costs and things like that? Just to find out where, you know, where should, you know, I how should I be planning this for myself. Again, I’ll throw out that if you do have some questions, go ahead and type them in and I will get to those at the end of the presentation. Uh, looking at methods to pay for long-term care. So, looking at now, we’re talking at around that 50/50ish, maybe a little bit more than 50% saying that they are very confident or somewhat confident during their working years is that ah, down the road I think I’ll be okay. I’m pretty confident I’ll be able to pay for long some type of long-term care myself or maybe it’s already been planned for with insurance. And then we’re talking about 46% saying not too confident or not confident at all that if something catastrophic happens that I might be running out of assets. Then retirees, it’s a little bit more saying not too confident or not confident at all. Now we’re looking at about 48% but again half and half. Half say, “I think I’m okay.” Half say, “I don’t think I’m okay.” So, where are you on that 50/50ish split? How will you pay pay for the potential costs? Sometimes someone might say, “I think I can do it myself. I’ll pay out of pocket uh using just whether it’s income, uh whether it’s investments, savings, you know, things maybe, you know, we’re going to talk a little bit about a reverse mortgage. Uh is that an option?” I think sometimes that might be a last resort for some people, but it is certainly an option. Relying on government programs with like Medicare or Medicaid. Uh Medicaid is probably the largest payer of long-term care, and we’re going to talk about that in a little bit. Purchase a long-term care insurance policy. So, having sub some type of coverage. I’ll talk about a few different uh options available out there. Whether you want to have a policy and make monthly premiums or annual premiums, maybe you have enough assets that you could do a lump sum. I’ll talk about the differences on some of these and what the benefits are. Uh add a long-term care rider to a life insurance or annuity product. Uh there are many of those. A lot of what we call hybrid policies are very much more popular than they were 20 25 years ago when I started in this business over 20 years ago about actually about 23 years ago and doing some long-term care policies at a different firm and the big players back then were like GE John Hancock were big players for long-term care and if you’re going to do a policy you might be paying 2300 a monthish at that time. I could say that many of those old old policies like that either they couldn’t keep up with, you know, the companies would say we don’t have enough uh built up in this policy. Either your premium has to go up or we’re going to be lowering your benefits or a combination of both of those. If you do happen to have a long-term care policy and you’ve been making monthly or annual premium payments, has that ever happened to you where you’ve received something from the long-term care uh provider company, the insurance company, saying that benefits might go down or premiums might go up or a combination of both of those? So, are you going to pay out of pocket? Are you going to rely on government program? Are you going to get some type of long-term care insurance or some type of hybrid policy with long-term care riders paying out of pocket or self-funding? You can, if you can afford it, you can do whatever you want. You can be at home, maybe go into a home or some type of assisted living. Uh maybe ideal if you can afford to pay for care indefinitely, but uh you must be willing to liquidate assets. Um, it may impact your ability to pass more money on to your family. You’re dwindling down the inheritance if that’s important to you. If you run out of money, relying on family members or the government may be the only option. Then using a reverse mortgage, basically a reverse mortgage is if you have significant equity in your home or maybe even no mortgage on your home, you’re doing a what’s called a reverse mortgage. Instead of doing a typical mortgage where you borrow a lump sum and then you make monthly payments, now you don’t get a lump sum, but you get monthly income from the equity of your home. So that’s an an option to say, I can use the home equity that I have and get a monthly income to help pay for some of these things. Allows you to borrow against the equity in your home. Can use the proceeds to hire caregivers or make home modifications. no mortgage payments. You’re not making payments. You’re actually getting payments, but the loan must be repaid when you vacate the home. So, if you leave the home or if you pass away, that’s got to be paid back. A reverse mortgage takes part of the equity in your home and converts it into payments made to you. You can use these payments to receive or pay for long-term care services um you need, or you can continue living. so you can continue living in your home. Drawbacks on that is it may not be suitable if you if you’re only going to be in the home for a short period of time. Typically, this might be for a few years because the reason they say not for a short period of time is because of the cost, fees, and expenses that are attached to those. It can be very expensive to get some of these reverse mortgages. Uh loan must be repaid when you move out or sell your home or die. So, you can’t hold a reverse mortgage and go live in a nursing home. You have to be it’s got to be an owner occupied home. Uh amount that you borrowed is typically much less than the actual value of the home. You won’t get 100% of your equity out for this. It involves substantial fees, origination fees, closing costs, servicing fees over the life of the mortgage. So, the the mortgage companies that offer these don’t do it for free. Uh yes, it’s certainly an option to maybe get income, but as if you have that for a year or two or three or four or five or however long it lasts, they are getting fees for that whole time as well. Interest is added to the balance and adds up over time and that again has to be paid back. If you run out of equity, you can run out of income. It’s not a lifetime or guaranteed forever income. This is with based on how much equity you have, how much income you can get. There is an expiration of how long that will last as well. Relying on government programs. So, true or false, Medicare will cover all of your health care expenses in retirement. Medicaid will cover care in a nursing home. Medicare. So Medicare is a federal health insurance program that covers most people who are age 65 and older. It’s composed of different parts. So typically you have Medicare A and B. And if you want to dig into Medicare, look out for one of our Medicare presentations. It gets much more detailed uh as I talk about how Medicare A B if you have the advantage plan, what the difference is on these. We can dig into that on that presentation. But your traditional uh Medicare is the original part A covers your hospital bills. Part B is your doctor visits and just your medical insurance. You might opt for the Medicare Advantage plan, which is Medicare Part C. And then you have to you would add on your prescription coverage, which is Medicare Part D. Medicare does not pay for personal care or custodial care. It’s health insurance. It’s not long-term care insurance. Home health benefits are limited on uh with Medicare. Medicare skilled nursing. Here’s one I said earlier. Short short short-term care. You can get uh for the first 20 days. If you are admitted in the hospital of a for a 3-day hospital stay, you could qualify for 1 to 20 days of skilled nursing care. can be 100% covered and you pay nothing but after that after 20 days from days 21 to 100 it’s partial coverage 100 days after 100 days there is no coverage so Medicare is not long-term care it is very short-term care is and this is uh only when it relates to skilled nursing care Medicaid very different than Medicare Medicaid is a state/federal joint funding uh for uh you know for basically you have to qualify for Medicaid by not having assets or very minimal assets. Uh Medicaid is a joint federal state program that assists lowincome uh individuals. Medicaid is the largest payer of long-term care. You could see the chart on the right. 54% of long-term care is paid through Medicaid. How do you get into Medicaid? First of all, it’s means-based. You have to have limited or no assets uh to qualify for Medicare. I have worked with some uh some of my clients and their families over the last years of, you know, getting elder care attorneys. An elder care attorney will kind of walk through how do you qualify for Medicare if you do have assets? How can you gift things away legally? If you have a spouse still living, uh you can certainly transfer things to the spouse. You can still have a home. Um but you cannot own a home if you are a single person to be on Medicaid. So Medicaid limits where you can receive care. Uh if you go to a nursing home and say, you know, this is a Medicaid situation, can a person stay here? They might be say, “Well, we do take Medicaid patients, but we only have three beds available out of the 100 beds that we have.” Uh, they may only have very limited space. Uh, so Medicaid might do that and you might have to go to a farther uh facility. Each state establishes establishes its own eligibility rules. A few state Medicaid programs may allow applicants who to self-direct their own care. uh check with the Medicaid uh site medicaidplanningass assistance.org to learn a little bit more about that. And again, if you think you might have to go to some type of Medicaid situation, again, an elder attorney or many estate planning attorneys might be able to assist in this that you’re not breaking any rules you have to follow. You can’t just give everything away all at once. Uh there are certain rules on uh how do you spend down your assets? Medicaid eligibility in most states an individual’s income must be less than the cost of care. Uh income uh cap applies in some states. Asset limit is in most states is $2,000 is what you can own. The cap of what you can own. Again, limits might be higher if you are married. So, some assets are not counted. If you have a home, if your spouse is still living, if your spouse is still living in the home, yes, you can own a home, then you can have one car, you can’t have two cars. Uh, household and personal belongings, you can certainly have. You can have term life insurance, but it cannot be a whole life or universal life with significant um uh let’s say cash value in there. Uh, only term insurance. Medicaid compliant annuity, a single premium immediate annuity. So, it’s something that you can just get income, but you don’t have a lump sum. It’s just a future income uh uh annuity. Uh burial plots and funeral expenses can be owned, but again, you’re looking at very limited assets that you can have uh by uh qualifying for Medicaid. strategies may be in included using assets that count, using your uh savings to purchase assets that don’t count, maybe using uh you know savings to get a term insurance policy uh if you qualify for that. Transferring assets into an irrevocable trust when we talk about the estate planning and join that one if I when I do have that presentation coming up. There is a big difference between a revocable trust and an irrevocable trust. An irrevocable trust you do not control. A revocable trust you do control if you are the trustee. So if you have an irrevocable trust, someone else has to be the trustee. Someone else manages that money on your behalf, but you are getting all of those assets out of your personal estate. You can start to give away assets legally. There’s certainly an legal way to do that. Distributing or protecting your assets in advance may help you qualify for Medicaid. Medicaid uh uh benefits uh and drawbacks benefits. Qualify for Medicaid as soon as possible if you want to start planning that and start gifting or giving money away. Protect a healthy spouse. Uh preserve assets for loved ones. And again, sometimes an attorney might be needed to plan some of these things. Drawbacks are ethically problemat problematic for some. Uh basically saying that, you know, as far as how to give money away, uh living off of the government, you know, sometimes those things some people might have an issue with. Uh may require you to give up rights to your assets. Medicaid laws are pretty complex and again per state. Um, it’s state and federal kind of working together on those. I know we do have a few questions on here, but uh if you do have some other uh questions, please type away and again I will get to those at the end of the presentation. Medicaid planning example. If you own if you transfer ownership of your house to your son. So this is as people are planning to give money away and give assets away. You plan uh transfer the ownership of the house to your son. The fair market value of the house is 400,000. The average cost of a nursing home care in your area is 8,000 a month. So what they’re doing is dividing 400,000 divided by 8,000 and that is 50 months. So it’s a little over 4 years, call it four years and 2 months uh that you are not eligible for Medicaid because of when you gifted that. there’s a waiting period for you to uh to say that I qualify for Medicaid. In this case, it’s a 50month waiting period. Then, so again, working with an attorney might help on giving some of these assets away. Last one on these three benefits of long-term care insurance that we’ll talk a little bit about. So, looking at long-term care insurance, in exchange for premiums you pay, long-term care insurance pays a contractual daily or monthly benefit for covered services up to the policy limits if care is needed. So, basically, you’re going to make monthly or annual premium payments if you go into claim. And again, if you cannot uh do two of the six daily living, feed yourself, dress yourself, bathe, bathe yourself, bathroom, those things. If you can’t do two of the six and it’s a doctor’s note saying that you cannot do those, then you can start to get income from this insurance policy. So, you’ve been paying premiums into it and if something happens, then you can start to get income out up to the policy limits. And how do these limits work? Basically, uh, sometimes they might say, there’s a few terms that will come up in the next couple of screens, is if I go into claim, can I get income right away from my policy? Well, there might be what they call like an elimination period. It might be a 30-day, 60-day, or 90day waiting period that if you go into claim, you’re on your own dime for the first 30 days, 60 days, or 90 days. Then the benefits will kick in after that. How long once you start to get these payments, how long do they last? It could be typically a four or a six-year income that you’re getting from your policy. Sometimes there are some lifetime options out there uh that’s much more expensive for those types of things, but a typical average of policies that I’ve seen and done is that 4 to sixyear income from the policy. So especially valuable for middle American in uh middle inome Americans who want to preserve financial independence and quality of life, preserve freedom to choose where you receive care, helps protect accumulated assets, and avoids the need to spend down your own assets. So if it is something that is affordable or you’re able to do the this first option of a long-term care is I just make a monthly or annual premium to this. I get some type of guarantee or you know for benefit down the road and I can eventually get income from it if I am in a long-term care need. So that’s uh certainly one of the options. How does the care insurance work? Uh you must be reasonably in good health to get the policy. So a big question sometimes people will ask is when should I get long-term care insurance? When you don’t need it. That’s the first part. Same thing with life insurance. Should you start planning life insurance when you’re ill or you have a serious uh serious illness or condition, uh you might not qualify for it then. So, when you’re well, that’s when you have to start looking for either long-term care or even life insurance. Uh premium is based on your age and the features and benefits you choose. So the younger you are, the cheaper the payments would be, the premiums would be, and depending on what type of benefits. If you want the the Cadillac of benefits, you’re going to get anything and everything. It’s going to be more expensive than if you had more modest benefits. Uh benefit is typically triggered when you become uh chronically ill or uh cognitively impaired. That’s basically Alzheimer’s, things like that. or you cannot do two of those six daily living things that we mentioned. Well, once the elimination period or that waiting period, that 30 days or 60 days or 90day waiting period is satisfied, benefits are paid as long as necessary until the policy limits are reached. And it could be a total dollar amount. It could be a 4-year term or a six-year term if you are still here and you’ve gotten that. Let’s say it was a six-year term guaranteed to get this income. Uh if you are here 6 years and 1 month, that one month you the the income stops. So they are capped on how long those payments will go out typically. Five key features of long-term care insurance. First is the benefit. How much can you receive on a monthly basis to help pay for your care? The benefit period. How long does that last? Is that four years, 6 years, or potentially longer? The elimination period again is how long do you have to wait to start that after you qualify for it? Is it that 30 days, 60 days, or 90day waiting period? Where can you get care? Sometimes people can would prefer to be in the comfort of their own home. Does that policy cover home care or do you have to be in a nursing home or some type of assisted living? Uh inflation protection. What if you bought a policy now and you don’t need this care for 10 years or 15 years or 20 years? What someone might pay 5,000 a month for right now. How much is that going to cost in five or 10, 15 or 20 years down the road? It’s going to be a much higher and is there some type of inflation protection on that?
Managing uh the uh the cost of long-term care insurance. The younger you are again is when you buy long-term care, the less expensive the premium. Uh make sure you can afford the premium now and in the future. So if you’re going to be retiring and income goes down, can you still continue to make those premium payments? Uh buying from a reputable company. And when I do long-term care insurance for people, uh you know, anytime I do insurance, I am given a list of companies that I can basically solicit. uh you know quotes from and they are all highly rated companies. You know uh I have a broker dealer that we are partnered with here at Alliant. Our firm is called LPL Financial. Through LPL Financial, we have an insurance services uh team. And when I get quotes and different types of policies, things like that, every company has to be highly rated and they are all pre-approved companies that I am able to get these quotes from. Uh, choose features and benefits wisely. So, what type of benefits are you looking for? And the more benefits you want, the higher that cost could potentially go. Take advantage of tax incentives. So, if you’re going to make monthly premium payments or annual payments, there could be some federal tax deductions uh for some of those long-term care premium payments. Possible state deductions. Uh, check with uh your qualified tax advisor if you do have questions on that partnership. uh policies that help you qualify for Medicaid.
Key policy features to consider again the benefit uh amount, how much do you get every month? Benefit period, is that going to last four years, 6 years? Benefit triggers, can’t do two of the six daily living or cognitive impairment, uh what are those things that uh are going on in your life that qualify you to get income from your policy. The waiting period again, types of facilities included, nursing home, assisted living facility, or in the comfort of your own home. Is there inflation protection? Waiver of premium. What that waiver of premium means is that if you are in a policy making monthly or annual premiums, if you are in claim and you’re getting money out, you don’t have to pay those monthly premiums anymore as long as you’re in claim. and is it guaranteed renewable? As long as you’re making premium payments, is that policy going to be active? Other insurance options. So, here’s what we do quite a bit of these days. Long-term care has changed a lot over the last 20 plus years. Um, there’s probably more hybrid policies than we’ve done than standalone long-term care insurance policies. The typical old school long-term care policy is when you’re looking at making a monthly or annual premium into this. Basically, if you pay into a policy for 5 years, 10 years, 15 years, 20 years, you’ve been paying into a policy. If you never go into a claim, if you’ve never had a long-term care need and you passed away after all that time, or just said, “Cancel the policy, don’t want it, don’t need it,” it’s gone. all the premium payments are spent and there’s nothing back to you. So, hybrid policies are very popular now because there’s some type of uh money’s going somewhere. So, a hybrid life insurance/l long-term care policy. Sometimes you can do this making a uh a monthly or annual premium. Meaning that if you’re paying into this and if there’s a long-term care need, let’s say there’s a bucket of $300,000 available based on how much you’re paying into. Let’s say there’s a $300,000 either death benefit if you pass away. Beneficiaries get the 300,000. If it’s a long-term care need and you’re still living, you didn’t pass away, but that same 300,000 could be used for long-term care needs divided by, however, if it’s a 4year period or a six-year period. And if you’re in a long-term care claim and you get money taking out of that, let’s say you’ve taken $200,000 out of the policy and you passed away, $100,000 is still available for the death benefit. So, it’s not all lost. So, and if you never went into a long-term care claim and just passed away, that 300,000 goes to the death benefit to your beneficiary. So, something is going to someone in these situations. That’s why we do a lot more hybrid policies. There’s also deferred long-term care annuity contracts. What that means, it’s called a fixed annuity with a long-term care writer. A fixed annuity is just an interestbearing account. It could be on average the gross interest rate, I’ll say gross interest rate is around 5ish%. 5-ish% is what you’re earning. But then depending the age that you purchase this now with the cost of the long-term care insurance comes out of that and you might net three, three and a half somewhere maybe even close to four again depending on your age. you’ll get a net interest rate after little long-term care and it’s just an interestbearing account growing growing growing over time and it’s got a the death benefit is whatever your cash value is. So if you put a lump sum this is a lumpsum option. Uh let’s say you are you’re able to fund a h 100,000 in this type of a policy. you put 100,000 in, it’s earning interest. And typically that long-term care, if you put a h 100,000 in, the immediate long-term care benefit is up to 300,000, even up to three times of what you put in. So you put in 100,000, that’s your cash value earning interest. And then but the benefit is 300,000. So you have the long-term care kind of covered. If something happens, even immediately, you’ve already put that 100,000 in. But if you pass away, that money that you put in is earning interest, and that goes to your beneficiaries. So, there’s a couple of different options of do you want to have a death benefit, a higher death benefit, or do you just want access to your asset? The annuity option is down the road. What if you’ve been holding it for 10 years, and you say, “Never mind. Don’t want it. Don’t need it. take your cash value back plus interest and that’s certainly an option. So there’s uh again something is going to someone a hybrid life insurance uh it’s a uh it’s a linked benefit again either long-term care or life insurance. Uh it’s got the you know might be a a life insurance first and with a long-term care rider uh chronic illness or critical illness acceleration rider. Um, it might have if someone says if a doctor says you’re not going to live more than 12 months, it might have an accelerated death benefit, meaning the full death benefit pays out even while you’re still living if you have a um if you again a doctor says you’re not going to live more than 12 months. Possible pros and cons of a hybrid. Positives are premium is guaranteed and won’t increase. So there are options of getting just doing this as a monthly or annual premium or if you have enough assets that you can just fund it one time with a lump sum that is certainly an option. Uh flexible uh premium payment options may be easier to qualify for than your regular traditional long-term care policy. Uh might allow you to pay a family member. Uh and I’m going to talk about two ways of how to get payments out of here in just one moment. uh permanent life insurance uh life policy builds cash value. The negatives provides less coverage for long-term care. Now you have two insuranceances that you’re purchasing. You’re purchasing a death benefit and long-term care coverage. So instead of just buying a long-term care policy with a higher long-term care benefit, now that long-term care benefit might be a little bit lower because we increased the death benefit. So you’re because you’re paying for two insuranceances now. uh limited availability and uh to be customized for individual needs. May not include inflation protection. Some of them do. Uh not eligible for state state Medicaid if you own this with cash value in there. Payouts reduce cash value or death benefit of life insurance policy. So, when I talk about how to get payments out of a policy, there’s typically two ways that insurance companies will pay you if you are in claim. One is called indemnity and the other is either receiptbased or reimbursement. So, a receipt-based or reimbursement is that you if you qualify for long-term care and maybe you have someone coming to the home, let’s say a company like Visiting Angels or something like that is coming to your home. Uh, sometimes those are nurses that are coming and they’re helping and assisting around the house and that’s a reputable company. they they charge you, let’s say it’s $5,000 a month for whatever time they’re giving you, and you have to pay that $5,000, get the receipt from them, go to the insurance company, and get the 5,000 back from the insurance company if you qualify for that much. So, it is receipt-based and it’s got to be a reputable company uh for for this type of uh process and you get reimbursed for and it might last four years, 6 years. Again, the other type is what we call indemnity payment, which means the insurance company gives you 5,000 a month, use it for whatever you need. If you need to take some of that money and build a ramp for wheelchair access, use some of it. You can use it for whatever. If you want to have a family member now come to your home and help cook, clean, you can pay family members, friends, relatives, neighbors, uh because you’re just getting 5,000 a month, you are covered. Go use it for whatever you need it for and you can pay anyone. So, but if you do have the receipt based or reimbursement, you can’t have family members, you can’t have friends, relatives, neighbors just come and pay them. They have to be a reputable company. uh you know so uh to pay that would give you a receipt deferred long-term care annuity here’s that one that interestbearing account that I mentioned earlier uh generally paid with a single upfront premium to the insurance companies uh payments for the long-term care expenses usually based on a multiple of the cash value that’s what I said before of if you put a 100,000 in it’s worth three times that or 300,000 for long-term care benefit the long-term care portion of the annuity uh premium may qualify for a tax deduction. Uh just a portion of that, speak to your qualified tax advisor about uh more information if you had one of those policies. Annuity value uh not used for long-term care can be passed to the heirs. Again, if you passed away and didn’t use, you know, all of your cash value for a long-term care need, that goes to your beneficiaries. Medicaid counts deferred annuities as assets. If as long if it’s a spendable asset, you cannot own this to go onto Medicaid. So, you would do this instead of Medicaid. Tax-free HSA distributions. If you have a se health savings account, maybe a high deductible health plan that you’re eligible to contribute to an HSA account, you can use HSAs to get to draw out tax-free and you can even sometimes make premium payments to long-term care uh to invest uh longerterm vehicles with growth potential. You can invest that money. Sometimes uh account funds accumulate tax deferred tax-free HSA withdrawals can be used to pay qualified health expenses including out-of- pocket long-term care expenses. So you can even use this for improvements made to your home uh premiums uh paid uh to Medicare like A and B. You can use these uh HSA uh withdrawals uh tax-free to pay for premiums. And uh there’s HSA contribution limits. You can see on the right side there. If you have an HSA plan um with some balances in there, yes, you can use some of that toward your long-term care needs. Begin planning today while you’re healthy enough to take advantage of all the options. Again, if you’re going to be looking and I hope you say yes at the end of this presentation when I put up that survey and we can start to talk about what is important to you, what type of care are you? Do you think you’re self-insured? Can you pay for this yourself? If you’re looking for some type of coverage, what does a long-term care policy look like? What if you wanted to make monthly or annual premiums? If you are blessed with assets that you can put some of those assets in a lump sum premium into some type of policy, I could let you know here’s what you would qualify for for that lumpsum deposit, what you would qualify for future long-term care needs. Um, and so while you have enough time to plan for Medicaid and accumulate funds in a health savings account uh to relieve your family of the burden of making these decisions. So, checklist, explore services and costs in your area, assess your finances, compare options, prepare health care directives, and talk to your family about your plans. Uh, so do it yourself. I would love to have that one-on-one conversation with you. Uh, don’t put this off. What we have on here, this is a list of the products and services that I do offer. One of the biggest uh, things down at the bottom left where it says advanced planning. Uh we do a full comprehensive retirement plan that might include uh tax advantage situations where you can do Roth conversions maybe in the future. Um you know talking about making sure you have beneficiaries on all of your accounts. Do you need to speak to an attorney about trust services or anything like that? Wills, power of attorney, uh all of those different things. This is all complimentary stuff that we do offer. So we do not charge for any of these services. Now, we do certainly investment management. There’s not fees for everything. Some things might have some investment fees, but not everything does. When I was talking about those interest rates earlier, that 5.6 for a 3year, 6% for a 5year, no fees, no costs, no expenses. Please have that conversation with me and we can certainly talk about what’s important to you. I’m going to go through the questions here now. Uh, as I do that, you see on the screen, here’s my information if you want to take a picture of that. Uh, or if you have your phone with your camera handy, you can uh hover over the QR code on the upper right there and you can just hover click on that little yellow thing and my calendar is available for you to look at to set up an appointment. If you want to do that right this second, you can schedule an appointment with me right now or simply respond to the survey that I’m going to put up in just a moment. And as I go through the questions, if you want to click away on the survey, so that is going to be up on your screen, it should be there right now. So see, yep, say yes if you would like to have a one-on-one conversation, and we’ll certainly schedule that. Uh so with that I will get to some of the questions here. Uh let’s go to uh does that include your 401k? I’m assuming your your assets that you own. If you yes your 401ks, traditional IAS, Roth IAS, anything like that is all uh included in assets that you own that you would not qualify for Medicaid. You have to spend pretty much everything down. So, yes, that does include 401k. I’m assuming that’s what you were referring to. If Medicaid makes up 54 54% of payers for long-term care services, why are there so few beds in the nursing homes? Uh, it’s a, you know, because nursing homes are looking to make a profit. They make a lot more by charging you 6,000 8,000 10,000 a month for that. And sometimes they’re mandated that they have to have some type of uh beds available, but uh it’s up to them if they want to. While we have very limited, unfortunately, it’s a profit um scenario and they make more money with that. Now there are other facilities that are strictly maybe for Medicaid or low income but uh it’s unfortunate yet that uh you know if you want a nice facility they might have very limited uh beds available for Medicaid purposes. Uh I’ve heard that if you are in your mid50s it’s already too late uh to get long-term care insurance because it’ll be too expensive. Not necessarily. I’ve done long-term care, you know, even in the 50s where the here’s where ages come into difference and what what would qualify, what would not qualify. Uh probably more people doing it in their 50s. Um some people say if I’m in my 40s, I might be paying premiums for 30 years on this uh before I need it. And sometimes that sweet spot is late 50s, early 60s. Once you start to let’s say some of these hybrid policies that I do typically there’s no um there’s no medical coming out to your home and doing you know height weight blood pressure and draw blood uh those types of things. Many times that is not part of the qualification. It’s a medical questionnaire that you would go through and it is a background check. It’s a HIPPO form that you would sign. Many times it’s what medications you’re on. If you are on like a standard blood pressure or you know something like that, cholesterol and things are controlled with these medications, you would most likely still qualify. Uh so some of those but if you’re on some type of transplant medication because you had a some type of organ transplant, uh that maybe not qualify. Type 1 diabetes might not qualify. um type two might qualify if it is just medication and not subject to um dependent on insulin shots. Uh so there’s many things that would qualify would not qualify. Where some of the ages come in is typically when I do these types of applications if someone is under the age of 70 it goes through that process that I just mentioned medical questionnaire. If you answer no to a lot, you know, to all of these, you would most likely qualify for that long-term care. If you are 70 or over, there might be one le another step uh to the process. Sometimes it’s the insurance company giving you a phone call. They will do a sometimes or 10 to 15 minute phone call. Cognitive uh is what they’re looking for on this specific thing. Sometimes there are questions of uh they might na name 10 things. They might say tree, car, house, you know, 10 things and they’re going to say repeat back what you heard on those 10 things. Now, they’re not looking for all 10 things exactly in the same order that they’re doing. But if you can’t name any of them or if you’re confused about the question or something like that, then they’re going to start to think there might be more of a cognitive thing. So, it’s a pretty much a cognitive phone call. Again, that is age 70 up to age 75. Some policies may not qualify for over age 75. If you are 76 or older, you might not be able to get this at all. Uh so, but it’s certainly something worth for me to check that out for you. So, mid-50s I would say is still a certainly a doable age. Uh let’s see. I have how long do you have to be have to hold your deferred annuity without any penalties though? So the deferred annuity is a it’s a nine I want to say a 9-year I think the year 10 is when you can draw out take the whole thing out without penalty. So this specific one is geared for long-term care. So, it’s much longer term than like my 3-year or 5-year. Um, but if you’re looking for the long-term care annuity, that’s a 9 or a 10year hold for that long-term care one. When I was talking about this, like I have a three-year fixed annuity and a 5-year fixed annuity. That’s not long-term care. I was just sharing some interest rates that I have available. Uh, that’s either a threeyear or a 5year period. If you’re talking about the long-term care annuity, that is a 9-year hold on that year 10 and beyond. If you want to cancel, take your money and run plus interest, 9 years is that hold period. Uh what type of medical appointment is required for a hybrid life insurance? Um many times not, some some do. Uh but if it’s a like our lumpsum one that we do, in fact, one of my companies is Bright House that I use for a hybrid life insurance/l long-term care. This is one of the lumpsum options, not the monthly premium or annual premium option. It’s one of the lumpsum where you’ put 50,000 in 100,000 in depending on what you could afford. Uh those are just a questionnaire and maybe a phone call depending on your age and you could qualify maybe within 24 48 hours is what you could potentially qualify for. Now there are certainly some that uh if it’s like some of the monthly premiums uh if you’re doing more traditional long-term care where the pyramid comes out to your home and does the blood draw and you know certainly blood pressure, height, weight, and things like that. and getting some stats on those types of things. That is certainly possible, but not all of them. Some of them are just the medical questionnaire. Uh if you have a current life insurance policy, can it be converted into a hybrid? Yes, I’ve done those where someone might have a uh cash value policy. In fact, one example 100 thou about a 100,000 in cash value in this um whole I think this was it was a whole life policy and I’m actually doing another one of those that I’m going through right now. uh is that basically you have this death benefit. Maybe it’s a $300,000 death benefit, but there’s a h 100,000 in cash value. You can convert or it’s called a 1035 exchange. That’s the tax code exchange where you take this life insurance cash value transfer to this long-term care/life insurance policy and that 100,000 in cash value is used to fund this long-term this hybrid policy. So yes, that can be done. Uh very popular that we do if you have current life insurance. And that’s one of those I don’t have to front other money. I can actually just use a policy that I already have to convert it more for a long-term care need instead of just a death benefit. Hybrid policies aren’t as dependent on uh qualification. Correct. Let me see. I have your information here. Hybrid policies aren’t as dependent on qualification. Uh so hybrid policies, they’re I’ll say they’re typically easier to get um because it’s not a paramed, it’s just a questionnaire and uh and going through. But yes, uh it’s um I would say it’s not as dependent on qualification. Uh so I would agree with you on that. Hopefully I have your information. If you’re looking for a little bit more, let’s dig into that question a little bit. I would love to have that conversation with you. Uh but let’s see. I think that is all the questions for now. Thank you so much everybody for your time. We’re just right at an hour here. So thank you for your time and attention tonight. If you did say yes, I look forward to speaking with you very soon and we’ll dig into your specific situation. I look forward to speaking with you. Thank you all. Have a great rest of the night.