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Extended Care Planning “ Tackling the 800 Pound Gorilla”

Extended Care Planning “ Tackling the 800 Pound Gorilla”. John Clarkson Allstate Insurance Agency. Disclaimer.

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Extended Care Planning “ Tackling the 800 Pound Gorilla”

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  1. Extended Care Planning“Tackling the 800 Pound Gorilla” John Clarkson Allstate Insurance Agency

  2. Disclaimer These materials are provided for educational purposes only and do not constitute the solicitation of an insurance product to the public. Not to be used with securities-registered products or for products funded by distributions from or owned within an IRA or employee benefit plan. Products and programs offered through Crump are issued by various insurance companies and may not be available in all states. Policy terms, conditions and limitations will apply. Not all applicants will qualify for coverage. You can obtain more information about insurance products by contacting your insurance agent. Crump makes no representation regarding the suitability of a particular insurance product to your needs. Neither Crump nor the insurance carriers provide tax or legal advice regarding these products or programs. You should consult your own tax, legal and other advisors before purchasing an insurance product.

  3. WhyPlan for Extended Care?

  4. Those who have been caregivers Those who currently are caregivers Those who will be caregivers Those who will need caregivers.” - Rosalynn Carter*, 1997 *Carter, Rosalynn. Speech given as Honorary Chair of Last Acts, National Program of the Robert Woods Johnson Foundation, 13 February 1997. “There are only four kinds of people in this world…

  5. This is not a discussion about the risk of you needing care, since you may never need it. However, it is essential to have a discussion about the consequences on those you love and promised to take care of, if you ever did need care.

  6. Research Shows Average National Costs: • Nursing home - $6,844 (semi-private), $7,698 (private) per month • Assisted living facility - $3,628/month • Home health aide services - $20.25/hour • 3%+ - average inflation in nursing home costs since 2011 • Doesn’t Medicare pay for Long Term Care costs? Genworth – “Cost of Care” app, 2017

  7. What is Average?

  8. Who Provides Care? How Would The Extended Care Be Paid?

  9. Ways to Pay for LTC Costs • Self Fund • Risk is in the hands of the owner • Timing may be a concern • Traditional Long Term Care • Ongoing premiums – not guaranteed, no return of premium • “Pay as you go” or “Lose it if you don’t use it” • Partnership Protection • Less Expensive • Hybrid LTC Policy (Asset Based Investment) • Guaranteed benefits, no additional premium requirements • Combined protection and control – live, die, quit All guarantees are subject to the claims paying ability of the issuing insurer. Details of product used available upon request.

  10. Tax implications • Market timing • Liquidity • Loss of future income possibilities Self Fund • It’s true, wealthy clients may be able to cover the cost of care, however have they considered these factors? Possible Concern with Timing

  11. Traditional LTC Policy • Monthly/daily benefit • Benefit duration • Inflation protection • Shared Care Rider • Services - home healthcare, assisted living, nursing home care, adult day care, hospice • Potential tax-advantaged LTC premium and benefits Disadvantages: Use it or Lose it Premium not guaranteed Highly Customizable – Flexible Design (You Choose)

  12. Hybrid LTC Policy(Asset Based Investment) • LTC policy + death benefit = leverage • Premiums payment method (1,3,5,7,10 years) • Potential tax-advantaged LTC benefits • Tax-free death benefit • Enhanced surrender value endorsement • Inflation options available • Services - home healthcare, assisted living, nursing home care, adult day care, hospice • Reallocation of assets Combined (Linked Benefits) – Live, Die, Quit Solution

  13. Consider This What is your current plan or strategy to pay for the cost of health care in retirement? …What does that plan look like? What would the impact be to you, your spouse/family, business and your retirement income―if you needed help to get through your day? If I gave you a sticky note, what asset would you write on that note that you would use first to pay for the care?

  14. Questions?

  15. Next Steps…

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