Planning & Paying for Long Term Care


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This workshop features three parts:

Secret #1: Converting Life Insurance to a Life Care Benefit Plan. There is $500 billion in life insurance death benefit in the hands of senior citizens 65 years or older in the US today, yet 88% of all policies will either lapse or be surrendered for little of no value. Find out if converting this benefit into a Life Care plan benefit is available to you.
Secret #2: Accessing Veterans Benefits. Veterans and surviving spouses can qualify for over $2,000 per month in long-term care services. Find out how.
Secret #3: Utilizing Long-Term Care Insurance or other Third Party Payors. Navigate your policy and uncover other local community payment relief options.

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Planning & Paying for Long Term Care

  1. 1. “Planning & Paying for Long-Term Care” Webinar Workshop
  2. 2. Housekeeping & Q/A Enter in your questions or comments throughout the webinar Important Avoid sharing any information that you would not want others to see
  3. 3. This is not tax, legal, or insurance advice • Griswold Home Care and partner presenters and their respective firms are not a law firm. We do not offer legal advice. Information contained within this webinar, website, our publications, our client agreements, client communications, and oral communications are not, nor intended to be, legal advice. • Griswold Home Care and partner presenters and their respective firms are not a tax advice experts. We are not offering tax advice. Information contained within this webinar, website, our publications, our client agreements, client communications, and oral communications are not, nor intended to be, tax advice. • Griswold Home Care and partner presenters and their respective firms makes no representations, warranties, or assurances as to the accuracy, currency or completeness of the content contain on this website or any sites linked to this site. Limitation of Liability • The materials on this webinar and at this site are provided “as is” without any express or implied warranty of any kind including warranties of merchantability, no infringement of intellectual property, or fitness for any particular purpose. In no event shall Griswold Home Care or its agents or officers be liable for any damages whatsoever (including, without limitation, damages for loss of profits, business interruption, loss of information, injury or death) arising out of the use of or inability to use the materials, even if Griswold Home Care has been advised of the possibility of such loss or damages.
  4. 4. Our Goal for Today • Frame the cost and impact of Long-Term Care planning • Uncovering Options to Pay For Long-Term Care – Life Insurance – Veterans Benefits – Long-Term Care Insurance – Other Third-Party Payors
  5. 5. Presented by: Patricia Servaes Founder of Elder Resource Benefits Consulting Don Poole Co-Founder and Chief Marketing Officer Life Care Funding, LLC Matt Murphy President Financial Health Services, LLC
  6. 6. What is Long Term Care? Long-term care is a range of services and supports you may need to meet your personal care needs. Most long-term care is not medical care, but rather assistance with the basic personal tasks of everyday life, sometimes called Activities of Daily Living (ADLs), such as: Bathing Dressing Using the toilet Transferring (to or from bed or chair) Caring for incontinence Eating 70 percent of people over the age of 65 will need long term care services at some point in their lifetime
  7. 7. Cost of Long Term Care • Cost can easily be the single largest lifetime expense of an individual • Tool:
  8. 8. Impact of LTC on Care Recipient Genworth Cost of Care Survey 2013 – ‘Beyond Dollars’ - The True Impact of Long Term Caring Report. • 88% of Care Recipients said their household income was reduced by an average 34% due to their long term care event • 63% Reduced their savings by an average 61% • 49% Of care recipients had never considered the possibility of needing long term care
  9. 9. Impact of LTC on Primary Caregiver Genworth Cost of Care Survey 2013 – ‘Beyond Dollars’ - The True Impact of Long Term Caring Report. • 83% of Primary Caregivers Contributed financially to their loved-ones long term care — an average $8,800 for out-of-pocket care expenses (excludes cost of facility care) • 42% of Primary Caregivers reported the care recipient lived in their home for 3 or more years • 63% of Primary Caregivers reported lost income — an average of 23% of household income
  10. 10. Beyond the Dollars “My wife had to be available 24/7. She also became my chauffeur and needed to help me shower and dress — to help me move at all, really. It impacted her freedom and her lifestyle.” “Anger at my sister and Brother for not helping more with our mom... Stress with my Husband over how much of ‘our personal time’ taking care of mom is taking up from our own lives.”
  11. 11. Paying for Long Term Care • ‘Long term care can be expensive — and, typically, it's an out-of-pocket expense.’ • ‘The more you know about the options, however, the better choices you can make.’
  12. 12. Featured Speaker Don Poole Co-Founder and Chief Marketing Officer Life Care Funding, LLC
  13. 13. (888) 670-7773
  14. 14. Life Care Funding Allows Seniors to Convert a Life Insurance Policy into a Life Care Benefit Plan which is paid directly to the care provider of their choice. -Private Duty Home Care -Home Health Care -Assisted Living -Independent Living -Skilled Nursing -Related Services
  15. 15. According to Conning & Company: "There are 150 million life insurance policies in-force in the United States of which senior citizens own up to $500 Billion worth of policies.” 88% of all policies issued will lapse or be surrendered for little or no value. According to a 2007 GAO study: 38% of Medicaid applicants owned a life insurance policy that needed to be liquidated to qualify.
  16. 16. A Life Insurance Policy is legally protected as personal property by the US Supreme Court and the policy holder has the guaranteed right to use it to pay for Senior Care. “A Life Insurance Policy is personal property just like a home or stocks.” Supreme Court case Grigsby v. Russell (1911) -Justice Oliver Wendell Holmes
  17. 17. Life Insurance needs are based on Insurable Interest Q: What was the Insurable Interest you were trying to protect when you bought your Life Insurance Policy? A: If a policy owner needs in home care and no longer needs or can not afford their Life Insurance Policy, then converting it to pay for Senior Living should be considered.
  18. 18. Seniors have few options if they do not need or can no longer afford their Life Insurance Policies: - Continue paying premiums, keep policy in-force so beneficiaries can collect Tax Free, Probate Free Death Benefit. - Surrender the Policy back to the Life Insurance Company: Average Cash Surrender Value 4-6% of face; well below the potential present day value. - Stop paying premiums, Lapse or Abandon the Life Insurance Policy for No Value.
  19. 19. Key Components: •Preserves Death Benefit over the course of the spend down period •Balance of Benefit paid to family if senior dies before payout period •Funds paid to care provider through an FDIC Insured, Irrevocable Benefit Account •Keeps people off Medicaid, Qualified Medicaid Spend-Down of unprotected asset •Any type/size Life Insurance policies •No cost or obligation to apply •30 to 45 days to qualify Life Care Funding Allows Seniors to Convert a Life Insurance Policy into a Life Care Benefit Plan which is paid directly to the care provider of their choice.
  20. 20. Life Care Benefit Enrollment Example #1 Case Study: 14793181H Policy owner: 70 Male Policy value: $250,000 (term) Lapse Value: $0 Cash Value: $0 Life Care Benefit: $150,000 or 60% of death benefit
  21. 21. Case Study: 27785691A Policy owner: 73 Female Policy value: $100,000 (UL) Lapse Value: $0 Cash Value: $0 Life Care Benefit: $35,000 or 35% of death benefit Life Care Benefit Enrollment Example #2
  22. 22. Seniors and their families need to know that if they own a Life Insurance Policy they can use it pay for Private Duty Home Care.
  23. 23. Policy Conversion Bills Based on Life Care Funding Program Introduced to Legislatures as of September, 2013: CA- SB 214 NY- A 7952 FL- HB 535 NJ- A 4168 KY- HB 314 LA- HB 545 ME- LD 1092 Legislative Activity to Educate and Inform Texas HB2383 Signed into Law by Gov. Rick Perry June 14, 2013 Bills grant authority to the state Medicaid Departments to educate citizens about the option to convert a life insurance policy into a specifically configured Long Term Care Benefit Plan as part of a Medicaid spend-down.
  24. 24. • Consumer: Use an asset they own and paid for over years of premium payments to fund their Senior Care by converting it into a Life Care Benefit Plan to help them stay safely and comfortably in their homes, while preserving a portion of the death benefit for the family. • Senior Care Provider: Private Duty Home Care service provider receives private pay funding for services over a guaranteed time frame without disruption. (Increase Revenue) • Tax Payers: Keeps people private pay and off Medicaid. Qualified spend-down of Life Insurance Policy to keep a person private pay and delay entry onto Medicaid generating considerable savings for tax payers. Who Benefits and How?
  25. 25. It’s all about Options: Educating Seniors and their families about how they can convert their Life Insurance Policy Death Benefit into a Living Benefit to remain safely and comfortably in their Homes. (888) 670-7773
  26. 26. Featured Speaker: Patricia Servaes Founder of Elder Resource Benefits Consulting
  27. 27. 27 Confidential Bringing the VA Benefit Home Elder Resource Benefits Consulting is not a Veterans Services Organization and is not affiliated with the VA
  28. 28. Veterans Administration - Aid & Attendance Pension to assist wartime veterans and their surviving spouses who: Require the Aid & Attendance of another person to assist with aspects of daily living. As of November 2012 9 Million Veterans are over age 65 – and this does not include their Surviving Spouses This tax free benefit has been available since the early 1950s. OVERVIEW 28
  29. 29. THE MAXIMUM AWARD FOR 2013  A Surviving Spouse can receive up to $1,113 per month  A Veteran can receive up to $1,732 per month  A Veteran with a Spouse can receive up to $2,054 per month  Well Veteran with an ill Spouse can receive up to $1,360 per month Once the applicant meets the disability criteria for A&A, the actual amount of the original award is determined by their Monthly Financial Means Test 29
  30. 30. WHO IS A WARTIME VETERAN? To be considered a War Time Veteran, The Veteran needs to have Served at least One Day during a Period of War Periods of war for this benefit are:  World War II – Dec. 7, 1941, thru Dec. 31, 1946. Min 90 days active service  Korean War - June 27,1950, thru January 31,1955 Min 90 days active service  Vietnam War – Min 90 days active service  From Feb. 28, 1961 thru Aug.4, 1964 – only if “in-country” of Vietnam  August 5, 1964, and ending on May 7, 1975 – no matter where in the world you served  Persian Gulf War - August 2, 1990, through date to Min 2 years active service be prescribed by Presidential proclamation or law – should be soon! 30
  31. 31. WHO IS A SURVIVING SPOUSE? Someone who was married to the Veteran at the time of his death What if the person was married to a veteran, he died and she remarried a non-veteran or divorced a veteran? 31
  32. 32. MEDICAL REQUIREMENT You must need the assistance of another person with Activities of Daily Living 32
  33. 33. THE INCOME TEST What is Income? Income, for the most part, is everything most of us think of as income – So do we all agree we know what income is? 33
  34. 34. Well That’s Not It ! Income For VA Purposes: Income MINUS Regularly Occurring, Unreimbursed Medical Expenses as long as you meet the Criteria for Aid and Attendance 34
  35. 35. THE INCOME TEST - EXAMPLE $3,000 Income per month $4,000 per month – HC cost $-1,000 income for VA Purposes - If your Income for VA purposes is $0 or Negative, there is potential for the full Monthly Amount - If the HC Cost is $2,000 your VA income is $1,000, Subtract the $1,000 from the maximum award for an approximate VA benefit 35
  36. 36. AGING IN PLACE If our Applicant had $25,000 in assets & $1,000 in additional monthly expenses - they would be out of assets in 12.5 months or 1.04 years – but with the benefit there assets would last:  2.35 years for the Surviving Spouse  3.26 years for the Well Vet ill Spouse  7.80 years for the Single Veteran  And we would have positive cash flow for our married Veteran 36
  37. 37. THE ASSET TEST  The Asset Limit is determined by each individual’s situation  The largest amount of assets that an individual had in their own name that ERBC successfully helped get the award was $248,000 – but that is a rarity!  Most people seem to be able to be between $120,000 to $150,000 – although some can only have much less The important thing to remember is this is not a Yes or No Award, it is If and When. 37
  38. 38. MYTH BUSTERS Do you know… …that there is no $80,000 asset limit? …that when a veteran or spouse is in a nursing home on Medicaid the non-Medicaid spouse may still get the full benefit at Home? …that a veteran living at home whose wife is receiving Home Care may still qualify for $1,360 per month? Thanks to ERBC, Now You Do! 38
  39. 39. Matt Murphy President, Financial Health Services, LLC Featured Speaker:
  40. 40. Our Mission Financial Health Services (“FHS”) helps seniors pay for long term care.
  41. 41.  25+ years providing services in the non- medical home care  900+ current clients (care recipients)  150+ third party payor relationships  100+ non-medical home care providers  20+ employees  HQ in Plymouth Meeting, PA About Us
  42. 42. Overview
  43. 43. Third Party Payor Services  Expertise Works with all types of third party payors e.g. long term care insurance, government, non-profit, hospice  Administrative convenience Allows care recipients and care providers to focus exclusively on care  Cash flow benefit to your clients No to little out of pocket impact Fees paid by third party payor  Ensures regulatory compliance
  44. 44. Easy Pay  Offers Administrative Convenience Overcome the 2-check objection Mitigate collection risk  FHS accepts most forms of payment i.e., ACH, Visa, MC, Check  Economics 5% of the sum of caregiver fee + the office fee
  45. 45. • Long Term Care Planning affects the entire family • The cost of Long-Term Care is high Key Takeaways