The document discusses the growing importance of elder life planning for banks to strengthen customer relationships and sales in the senior market, particularly as the population aged 65+ is increasing rapidly. It highlights the financial strategies banks can implement, such as offering long-term care insurance and reverse equity mortgages, to assist maturing consumers and retain deposits amidst rising care costs. With 85% of the workforce expected to take on elder care responsibilities, banks must provide knowledgeable guidance and a comprehensive marketing approach to tap into this expanding market.

1. Elder Life Planning for Banks ______________________________ A Comprehensive Approach to Establishing Stronger Customer Relationships And Increasing Sales Of Senior Market Financial Products

2. People are living longer Fastest growing segment of our population -people over 85 At age 65, people can now expect to live 16-19 years longer Today there are 34 million seniors, by 2030 there will be 70 million Last year, Social Security mailed over 400,000 checks to people OVER 100 years old

3. Senior Markets Are Growing Rapidly The 25 to 40 Age Group Will Decline Steadily Over the next seventeen years the over fifty market will increase by approximately 50%. Those under fifty will increase by only 1%. The current 50+ population is 80 million strong, and will grow to 97 million in just 5 years. Every day 6,000 Americans turn 65.

4. The Senior Market is Critical to Banks The aging of America requires fundamental and continuous changes in how financial institutions interact with their customers. Consumers are scrutinizing products and services more closely than before. They are changing the way they look at their bank. Consolidations have left many customers feeling alienated and even abandoned.

5. Elder Life Planning: Financial Protection Develop financial strategy for managing costs Applicability of third party sources Suitability of financial alternatives including long term care insurance, reverse equity mortgages and life settlements Money management and professional bill paying services

6. HOW IMPORTANT IS THE AGING OF AMERICA TO BANKS? Maturing consumers (aging baby boomers and older consumers) are the wealthiest; best educated and most sophisticated purchasers ofany age group. Those over age 50 now control more than 70% of the total net worth of American households. The data shows that discretionary income rises and reaches its peak in the fifty-five to sixty-four-age bracket

7. 3 significant market segments in the overall “Mature Market”. GROUP 1. The 65+ market contains many who are living longer and healthier than ever before. They are more active and more affluent, than any previous generation of “elders”. At age 65, healthy people can now expect to live 16-19 additional years.

8. GROUP 2: Age 85 + While blessed with more longevity this group is also more likely to face severe disabilities. They are likely to require assistance with everyday activities, either to stay at home, move to a retirement community or, in some cases, move to a nursing home. Because long term or “custodial” care is expensive and not covered by Medicare, these costs can result in a significant drain on savings

9. Group 3:The 45 to 65-age group Most of these folks are still working, and a significant percentage will continue to work well past the age of 65. They are not, as a group, as concerned about their own health and disability issues. They are very worried, however, about those in the first 2 groups, their parents and grandparents.

10. WHY IS GROUP 3 WORRIED ABOUT GROUPS 2 & I? Eighty-five percent of the American work force expects to have some form of elder care responsibilities within the next 15 years. 40% expect to take on elder caregiving responsibilities within the next 5 years. There are 25 million caregivers in the US. Over 60% of these caregivers have been providing care for more than 5 years. More than 80% of caregiving is done at home. 47% of caregivers are employed. .

11. Banks can take an active role in educating their maturing depositors Otherwise the staggering costs of long term care will result in a steady stream of deposits leaving the bank to pay for home care, nursing homes and other expensive forms of care. With the proper advice and assistance; significant savings in the costs of care can be achieved.

12. Banks Can Benefit Instead of Losing A well thought out marketing plan combined with effective customer service training in elder care issues, will generate significant new revenues from the sale of long term care insurance and other senior market financial products and provide the bank with a competitive advantage.

13. To Be Dominant in the Changing Senior Market, Banks must Develop a Seamless Senior Market Strategy Across ALL Units Bank personnel at all levels need access to a knowledgeable, strategic, systematic and integrated approach to securing, serving and retaining maturing consumers With an integrated marketing strategy, banks can dominate Insurance, Employee Benefits, Reverse Equity Mortgages & Retirement Planning Markets

14. The Menu of Senior Market Products Banks Can Offer Reverse Equity Mortgages Long Term Care Insurance Annuities Critical Illness Insurance Pre-need Funeral Planning Life Settlements Medicare Supplement Insurance

15. Reverse Equity Mortgage Payment stream is literally reversed - instead of the borrower making monthly payments to the lender, the lender makes payments to the borrower based on the amount of equity held in the home. No ongoing payments required from borrower. Payments are made to the borrower. Payment to lender comes due when the home is sold

16. Reverse Equity Mortgage Market Today Eligibility is age 62…Most applicants are 75 + Healthy homeowners wary of reverse mortgage. Reluctant to spend home equity on themselves for “non-essentials Will see explosive growth over next 5 years Term of the loan for 75 Plus age is shorter, and therefore more profitable, due to early "maturity“.

17. Motivating Factors That Drive the R.E.M. Decision Threats to Independence Fixed income not adequate to meet living expenses. Chronic Illness of one or both spouses requires long term care. Care at home preferred over nursing home care. Most home care is expensive and not covered by Medicare

18. LONG TERM CARE INSURANCE Cost of Care is High -- So Is The Risk of Needing It 50% Americans 65+ will need Long-term care services during their lifetime. A year in nursing facility in Northeast averages more than $70,000. Home care costs can be less…OR cost more depending on the amount of care needed. The US General Accounting Office estimates that the cost of long-term care could triple in the next 20 years.

19. Long Term Care Insurance Market in 5 Years Long-term care coverage will help protect hard-earned retirement savings and independence – LTC insurance premiums are tax deductible. Long-term care coverage increasingly popular as a workplace benefit. Groupd discounts for employees and extended family. Employers can pay part of premium and deduct FULL cost. Sharp decline in public funding of care (Medicaid) will spur increase in sales of private policies

20. Critical Illness Insurance (CII) “ The United States market is beginning to appreciate that the power of Critical Illness insurance… By and large, current U.S. employer-based health care coverage does not alleviate the financial burden of a critical illness. CII bridges this gap in coverage and enables ordinary citizens who need it access to the finest medical intervention in the world.” LOMA International

21. Pre-Need Funeral Planning Individuals prepay for funerals and burials by entering into a pre-need agreement, or contract,to pay in advance for goods or services they will receive upon death "More Americans are entering into pre-need agreements to purchase funeral services prior to death. Currently, funds in pre-need agreements exceed $25 billion, up from $18 billion in 1995. In a recent AARP survey,2 two in five persons age 50 and older had been contacted about the advance purchase of funerals.” AARP Public Policy Institute Some individuals may also preplan by setting aside money in a bank account for the future purchase of funeral and burial goods and services by the appropriate survivor.

22. Medicare Supplement Insurance Older Americans are faced with many options when it comes to health care after age 65. Neither, the Medicare program nor managed care were intended to pay the entire hospital, doctor or nursing home bill. Many seniors will need supplemental insurance to pay on expenses not covered by Medicare. Supplement insurance is available from many different sources. Neither Medicare nor Medicare supplement policies cover most long-term care expenses.

23. Personal professional Solution: case management Comprehensive assessment of patient needs and care planning Analysis of most appropriate service options available On-going coordination of care provided and services received Development of financial strategy for managing cost of care

24. The Solution: suitable and timely placement Retirement housing Home care Assisted living Adult day health care A national network that will enable you to find services anywhere in the United States

25. The Solution: c onsulting and other services Elder law assistance: updating wills, power of attorney, health care proxy, disability trusts Money management and bill paying services by bonded accounting and book keeping specialists Internet access for information and services Reduce time filling out tax forms, bills and other paperwork

26. Typical What will it cost and how Questions: can you help with placement What are your fees? Fees paid are often less than the costs of lost time and travel How can you help with placement? Our on-going professional relationship with the finest facilities can help What happens after placement? We can continue to stay involved and help

27. Elder Life Planning: Peace of Mind Professional case management including needs assessment and service options On-going coordination of care and services Suitable and timely placement Special consulting services including elder law, account billing etc.

28. Elder Life Planning Alliance Informed Eldercare Decisions, Inc.(MA) Group Benefits Strategies, Inc.(MA) Sound Options, Inc (Tacoma, WA) Rona Bartelstone Associates (Ft Lauderdale) Caregivers Resource HelpLine (Atlanta)

29. Elder Life Planning: Financial Protection Develop financial strategy for managing costs Applicability of third party sources Suitability of financial alternatives including long term care insurance, reverse equity mortgages and life settlements Money management and professional bill paying services

30. Elder Life Planning Creative Solutions for Working Caregivers Informed Eldercare Decisions, Inc. 1-800-375-0595 www.elderlifeplanning.com