The Benefits of Employer-Sponsored  Long-Term Care Insurance Presented to:
Overview of Multi-Life LTCi <ul><li>What is long-term care? </li></ul><ul><ul><li>Day-to-day assistance with daily activit...
How Much Does Long-Term Care Cost? <ul><li>Most of California today:  $200/day </li></ul><ul><ul><li>$72,000 - $75,000 per...
The Extent of the Risk <ul><li>Long-term care is the largest unfunded liability in the United States </li></ul><ul><li>78 ...
Impact on Employers of LTCi <ul><li>Lost productivity </li></ul><ul><ul><li>64% of caregivers are employed </li></ul></ul>...
Benefits to Employers of Offering LTCi <ul><li>Improve recruiting, retention & loyalty </li></ul><ul><li>Increase producti...
Some More Good Reasons for Employers To Offer LTCi <ul><li>Help employees protect their retirement assets using discounted...
And Even More Good Reasons for Employers to Offer LTCi <ul><li>LTCi is truly a FAMILY benefit (for parents, grandparents, ...
Multi-Life LTCi vs. True Group <ul><li>Multi-life policies are INDIVIDUAL </li></ul><ul><ul><li>Owned by employees from Da...
And one more advantage… <ul><li>LTCi enjoying unprecedented tax advantages </li></ul><ul><li>Government recognizes tremend...
Benefits to Employees <ul><li>Gets them thinking and planning for their futures about wealth & lifestyle preservation </li...
Options for Employer-Sponsored LTCi Program <ul><li>Executive Carve-Out </li></ul><ul><li>Defined benefit </li></ul><ul><u...
A Business Approach to Multi-Life LTCi <ul><li>What would happen if you gave your key employees a $30 raise per month? Not...
How You Can Approach Multi-Life LTCi <ul><li>You can: </li></ul><ul><ul><li>Protect key executives </li></ul></ul><ul><ul>...
What You Need to Begin the Process <ul><li>A Census </li></ul><ul><li>Excel format is best </li></ul><ul><li>Name, date of...
Sample of Simplified Underwriting questions <ul><li>List of major diseases Yes/No </li></ul><ul><li>Do you currently resid...
Another Reason to Offer Multi-Life LTCi At the Worksite <ul><li>Premiums for employees are 100% tax-deductible for employe...
Summary of Benefits <ul><li>Multi-Life LTCi has huge benefits for employer and employees: </li></ul><ul><ul><li>Protects e...
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Long Term Care In The Workplace

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Long Term Care In The Workplace

  1. 1. The Benefits of Employer-Sponsored Long-Term Care Insurance Presented to:
  2. 2. Overview of Multi-Life LTCi <ul><li>What is long-term care? </li></ul><ul><ul><li>Day-to-day assistance with daily activities when you’re injured, ill, or frail and need help for at least 90 days </li></ul></ul><ul><li>How likely is it that you’ll need it? </li></ul><ul><ul><li>50% of men, 75% of women over 65 </li></ul></ul><ul><ul><li>40% of long-term care claims filed pre-retirement by those ages 18 to 64 </li></ul></ul>
  3. 3. How Much Does Long-Term Care Cost? <ul><li>Most of California today: $200/day </li></ul><ul><ul><li>$72,000 - $75,000 per year </li></ul></ul><ul><li>Current rate of inflation in LTC: 5.5% </li></ul><ul><li>Who pays for long-term care? </li></ul><ul><ul><li>Personal savings and retirement accounts </li></ul></ul><ul><ul><li>Family members – current income or assets </li></ul></ul><ul><ul><li>Medicaid – if you spend down assets </li></ul></ul><ul><ul><ul><li>Just made harder with Deficit Reduction Act of 2006 </li></ul></ul></ul>
  4. 4. The Extent of the Risk <ul><li>Long-term care is the largest unfunded liability in the United States </li></ul><ul><li>78 million Boomers nearing retirement </li></ul><ul><li>Less than 10% own LTCi </li></ul><ul><li>Employer lost productivity due to employee care giving cost $15 - $30 billion annually and will only increase </li></ul>
  5. 5. Impact on Employers of LTCi <ul><li>Lost productivity </li></ul><ul><ul><li>64% of caregivers are employed </li></ul></ul><ul><ul><li>Most caregivers provide 36 or more hours per week of care </li></ul></ul><ul><ul><ul><li>Lost work time </li></ul></ul></ul><ul><ul><ul><li>Increased stress, depression, anxiety </li></ul></ul></ul><ul><ul><ul><li>Refused promotions and relocations </li></ul></ul></ul><ul><ul><ul><li>Lost wages and opportunities </li></ul></ul></ul><ul><ul><ul><li>Decreased productivity while at work </li></ul></ul></ul><ul><ul><ul><li>Impacts other employees on caregivers’ team </li></ul></ul></ul>
  6. 6. Benefits to Employers of Offering LTCi <ul><li>Improve recruiting, retention & loyalty </li></ul><ul><li>Increase productivity </li></ul><ul><ul><li>LTCi can be offered to spouses, parents, grand-parents (helps keep employees fully employed vs. distracted by care giving) </li></ul></ul><ul><li>Provide protection for employee’s retirement savings: LTC is the key reason retirees go broke! </li></ul><ul><li>Protect their bottom line </li></ul><ul><li>Hedge against reduction in health benefits </li></ul>
  7. 7. Some More Good Reasons for Employers To Offer LTCi <ul><li>Help employees protect their retirement assets using discounted dollars (10-cent dollars or less) </li></ul><ul><li>Multi-Life LTCi plans are Individual, so completely portable </li></ul><ul><ul><li>No ERISA, COBRA or conversion plan administration! </li></ul></ul><ul><li>Can carve out employees by class, role, tenure, etc. </li></ul><ul><li>Take advantage of tax deductibility of premiums for employees where applicable </li></ul>
  8. 8. And Even More Good Reasons for Employers to Offer LTCi <ul><li>LTCi is truly a FAMILY benefit (for parents, grandparents, siblings, etc.) </li></ul><ul><li>LTCi is a non-inflationary benefit: rates are set at employee’s age at enrollment & don’t increase annually </li></ul><ul><li>Retirement plans teach employees Wealth Accumulation: LTCi teaches employees Wealth Preservation </li></ul><ul><li>Employees who start early will have a better chance of not going broke in retirement </li></ul>
  9. 9. Multi-Life LTCi vs. True Group <ul><li>Multi-life policies are INDIVIDUAL </li></ul><ul><ul><li>Owned by employees from Day 1 </li></ul></ul><ul><ul><li>No ERISA, conversion or COBRA administration </li></ul></ul><ul><ul><li>Completely portable and customized to employee </li></ul></ul><ul><ul><li>Benefits can be offered to non-dependent relatives (parents, grandparents, siblings) </li></ul></ul><ul><ul><li>Rates increases are not automatic, need regulatory approval </li></ul></ul><ul><li>True Group </li></ul><ul><ul><li>Usually costs less (for a reason) AT FIRST </li></ul></ul><ul><ul><li>Potential for SIGNIFICANT rate increases: experience-rated and not subject to Rate Stabilization </li></ul></ul><ul><ul><li>Employer is the policyholder </li></ul></ul><ul><ul><li>Experience-rated as a group </li></ul></ul><ul><ul><li>Benefits cannot be customized as easily </li></ul></ul><ul><ul><li>Doesn’t solve care giving problem for employer </li></ul></ul>
  10. 10. And one more advantage… <ul><li>LTCi enjoying unprecedented tax advantages </li></ul><ul><li>Government recognizes tremendous unfunded liability if Boomers don’t buy it </li></ul><ul><ul><li>Group disability insurance: benefits taxable </li></ul></ul><ul><ul><li>LTCI: benefits are NOT taxable </li></ul></ul>
  11. 11. Benefits to Employees <ul><li>Gets them thinking and planning for their futures about wealth & lifestyle preservation </li></ul><ul><li>Protects the retirement plan they’re building through 401Ks, other assets </li></ul><ul><li>Benefits are tax-free (compared to a salary increase which is taxed) </li></ul><ul><li>Simplified underwriting and discounts </li></ul><ul><li>Can cover parents, spouses, siblings which will protect their own and their relatives’ future, family, and finances </li></ul><ul><li>Most requested benefit in 2006 - 2007 </li></ul>
  12. 12. Options for Employer-Sponsored LTCi Program <ul><li>Executive Carve-Out </li></ul><ul><li>Defined benefit </li></ul><ul><ul><li>Core benefit paid by employer </li></ul></ul><ul><ul><li>Employees can buy up w/payroll deduction </li></ul></ul><ul><li>Defined contribution </li></ul><ul><ul><li>Package of options </li></ul></ul><ul><ul><li>Employer pays defined amount monthly </li></ul></ul>
  13. 13. A Business Approach to Multi-Life LTCi <ul><li>What would happen if you gave your key employees a $30 raise per month? Not much – tax impact, barely noticeable </li></ul><ul><li>What would happen if you gave your key employees a $30 benefit that will protect their future and their retirement, and will help them be more productive at work? </li></ul>
  14. 14. How You Can Approach Multi-Life LTCi <ul><li>You can: </li></ul><ul><ul><li>Protect key executives </li></ul></ul><ul><ul><li>Pay for key employees </li></ul></ul><ul><ul><li>Give starter plan to others with buy-up options </li></ul></ul><ul><ul><li>Do carve-out for key employees and voluntary plan for others </li></ul></ul>
  15. 15. What You Need to Begin the Process <ul><li>A Census </li></ul><ul><li>Excel format is best </li></ul><ul><li>Name, date of birth, marital status </li></ul><ul><li>Spouse/Partner’s DOB if applying </li></ul><ul><li>Annual salary if available </li></ul><ul><li>Any major health conditions in the group? (doesn’t have to be by individual) </li></ul>
  16. 16. Sample of Simplified Underwriting questions <ul><li>List of major diseases Yes/No </li></ul><ul><li>Do you currently reside in or have you been advised to enter a residential care or nursing facility? Yes/No </li></ul><ul><li>Do you require human help or supervision for the basic Activities of Daily Living? </li></ul><ul><li>Underwriting is off the application versus from medical records </li></ul><ul><li>Limited offers often made if an applicant cannot qualify: limited benefits </li></ul>
  17. 17. Another Reason to Offer Multi-Life LTCi At the Worksite <ul><li>Premiums for employees are 100% tax-deductible for employer </li></ul><ul><li>Owners’ premiums are deductible based on type of business (C-Corp, S-Corp, LLC, etc.)* </li></ul><ul><li>Benefits to policy holders are tax-free </li></ul><ul><li>All early-pay options are available to individuals (10-pay, paid at age 65, etc.) </li></ul><ul><li>* Employers must consult their personal tax advisors for details: we cannot give tax or accounting advice </li></ul>
  18. 18. Summary of Benefits <ul><li>Multi-Life LTCi has huge benefits for employer and employees: </li></ul><ul><ul><li>Protects employer bottom line by keeping employees focused on work versus care-giving (by offering to family members) </li></ul></ul><ul><ul><li>Protects retirement funds employees work so hard to build </li></ul></ul><ul><ul><li>Provides security, peace of mind, and assurance of help when needed </li></ul></ul><ul><ul><li>Provides tax benefits to employers far beyond the premium dollars invested, compared to equal salary increase </li></ul></ul><ul><ul><li>Helps recruit and retain top-notch employees, who are aware of the LTC need and appreciate assistance in obtaining it </li></ul></ul>

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