Prudential Long-Term Care Underwriting

1. Prudential Long-Term Care Underwriting Pat Flynn, RN, Clinical Manager, LTC Benefit Access and Underwriting

2. Underwriting Support • Hotline: 1-800-800-8542 (pre-qualifications only) • Customer Service: 1-800-732-0416 (status) • E-Mail account: LTCUnderwriting@Prudential.com • Newsletter: FrontRunner • Personal point of contact: assigned underwriter • Medical conditions guidelines: revised September 2006 • BrainShark:web based training

3. Underwriting Guidelines • Eligible Population: 18 - 79 • Use current age at time of application signature • Do not backdate application • Age automatically saved within 30 days of birthdate • Do not request to “save age” if applicant has turned 80 by date of application

4. Primary Requirements

5. Underwriter Considerations • Cognitive status • Functional capacity-ability to perform ADL’s, IADL’s • Medical conditions – may result in need for care (falls, fractures, c/o pain/weakness) • Multiple medical conditions - in combo are more significant (DM with Heart Disease, CHF with angina) • Multiple changes in medication • Lab results

6. Underwriter Considerations (Cont’d) • Treatment plans - PT/OT • Cardiac rehab, steroid injections, planned or recommended procedures • Chronological age vs. physiological age • App may seem younger or older than actual age • Frailty - more susceptible to illness/disease • Independence factors • Working, married with spouse in good health, active, driving and travel independently

7. Determining Successful Applicant Questions • Unsteadiness or limping? • Tremors (hands or face)? • Shortness of breath while speaking or walking? • Use of assistive devices? What type? • Do spouses share in conversation or does one speak for the other? • Can he handle his IADL’s independently? • Shopping, laundry, cooking, check book, transportation, etc.

8. Hip/Knee: 3 mos CABG-6 mos: 12-DM Angioplasty: 3 mos, 12-DM Pacemaker: 3mos, 12-DM Defibrillator: 12 mos Heart valve: 6 mos, 12-DM Endarterectomy:3 mos, 12-DM Back/Spine: 6 mos Fractures: 3 mos Pelvic fracture: 12 mos Surgery anticipated-Postpone Determining Successful Applicant-AgentSurgery Waiting Period Assumes completely recovered, no limitations to functionality or underlying disease

9. Underwriting Risk-Low • Stable medical conditions • Predictable clinical course • No ADL/cognitive deficits • Met stability interval-time from end of treatment until signing of application • Generally speaking low probability of having significant ADL loss next 4-5 years

10. Underwriting Risk-High • Unpredictable medical conditions • Condition threatening to functional independence • Current ADL deficits • Current Cognitive deficits • Likely to require human assistance with ADL’s within next 4-5 years

11. UW Classes-Preferred • 15% discount • Reward for good habits and lifestyles • Must answer “no” to: smoking past 36 months • May not use multiple medications • Must fall within Preferred height to weight Guidelines (pg 83) • Leeway 5 - 8 lbs with no other medical history • Must answer “no” to: any history of specific medical conditions (pg 81-82)

12. Underwriting Classes: Standard I • Generally ALL medical conditions that meet stability indicators • Specifically, minimum length of time required from completion of any / all treatment for condition to the time an application is submitted • Diabetes controlled by diet and exercise ONLY • Height to weight within guidelines • Smoking less than one pack per day & have no associated cardiac, respiratory or vascular/ circulatory conditions

13. Congestive heart failure Hodgkin’s Disease Leukemia Lymphoma Diabetes/ daily medication Chronic Obstructive Pulmonary Disease/ daily meds Emphysema/ daily meds Smoking one pack or more a day Underwriting Classes: Standard II These are the ONLY conditions that should be rated STANDARD II

14. Disclosure / Appeals Process • Will consider appeal within 60 days of decline decision • To request an appeal: • Send name, policy #, SS#, DOB and reason for appeal request and/or access to records to LTC Underwriting Appeal: • Fax: 877-773-9515 • Mail: 2101 Welsh Road Dresher, PA 19025 • Request for disclosure of specific reason for decline is sent ONLY to applicant or physician • Appeal of decision may require supportive medical information from physician • After 90 days of original decline date requires new application if decision reversed

15. Decision Terminology • Approved: as applied for • Approved with modifications significance of risk • Reduced daily max, reduced lifetime max, increase benefit waiting period, eliminate cash rider, change rating • No additional Benefit increases allowed for 2 years • Declined: risk is too great • Declined with Reconsideration • Generally has not met stability period; an offer to review another app at a specified later date • Applicants 76 - 79 will seldom be offered reconsideration(greater possibility of decline in health)

16. Decision Terminology (continued) • No reconsiderations are communicated to agent only • Approved as applied for • NO increases permitted • Maximum benefits acceptable for risk • No requests submitted for 2 years (full underwriting, attained age)

17. Correspondence For Decline • Letter to applicant will be specific and focused based on medical condition/ impairment, results of testing, etc. • Copy of decline letter to producer as provided on application • Phone outreach

18. Long Term Care Claim and Benefit Access Presentation

19. The Definition of Long Term Care • Broad range of help one needs if unable to care for oneself due to PROLONGED illness or disability • Involves receiving assistance of another person to perform essential activities of daily living when those tasks can no longer be performed independently

20. Bathing Washing oneself by sponge bath; or in tub/ shower, including task of getting in or out of tub/ shower Dressing Putting on and taking off ALL items of clothing and any necessary braces, fasteners or artificial limbs Transferring Moving in/out of bed, chair or wheelchair Toileting Getting to & from toilet, getting on & off toilet, & performing associated personal hygiene Continence Ability to maintain control of bowel & bladder function or unable to maintain control of bowel or bladder function, ability to perform associated personal hygiene (caring for catheter or ostomy bag) Eating FEEDING oneself by getting food into body from a receptacle (plate, cup, feeding tube or intravenously) Six Activities of Daily Living

21. Defining Chronic Illness • Physical limitation preventing policyholder from performing without substantialassistance at least 2 ADL’s for at least 90 days/ Or • Severe cognitive impairment requiring substantial supervision to protect policyholder’s health or safety

22. Certifying Chronic Illness • Loss of functional capacity (physical or cognitive) suggests appropriate care and developing a “plan of care” • NOT a chronic medical condition, or medical diagnosis

23. Types of Medical Conditions • Acute • Generally resolves within 90 days, short hospital stay, rehab potential good • Chronic • Long-term, rehabilitation potential poor • Cognitive • May need redirection for safety and physical hands-on assist for ADL’s, rehab potential poor

24. Federal Law • Created and defined Tax Qualified Long-Term Care Policy • Policies must define chronically ill individual as someone certified by a Licensed Health Care Practitioner • May use Prudential LTC vendor for face-to-face assessment or own physician (Pru will provide physician with certification forms) • The chronically ill or disabled individual must need SUBSTANTIAL ASSISTANCE with 2 ADL’s, and must be expected to last at least 90 consecutive days, OR individual must have a severe cognitive impairment requiring SUBSTANTIAL SUPERVISION • Under tax qualified policy, insurers must pay claims (for qualified long term care services) pursuant to a Plan of Care • Plan of Care is a document prescribed by a licensed health care practitioner

25. How Do We Certify Chronic Illness? • Gather objective documentation/substantiation from multiple sources • Observation of physical functioning • How well performs ADLs, how managed before and why now cannot • Use standard measurements of skills • Tools and resources • Face to face assessments, medical records from hospitals, rehab facilities, nursing home assessments, care plans, service levels, chronicity guides, medical disability advisors, hospice assessments, etc.

26. Creating the Plan of Care • Maximize wellness, reduce dependency, conserve claimant’s pool of money • Type & intensity of services consistent with type & level of actual need for substantial assistance • Optimizes claimant’s ability to regain partial or full functional independence • Includes what care services are recommended, by whom, frequency, duration • Supportive community resources • Restorative services • Assistive devices that foster independence • Caregiver support

27. Summary • Determine what ADL or cognitive deficits exist and extent of deficits • Whether insured needs substantial assistance of another person • Need for substantial assistance last 90 consecutive days • Identify opportunities to restore/improve independence through ”plan of care” • Reduce dependency >reduced intensity of services >reduces claim • Protects claimants pool of money