“WealthCare ”

1. “WealthCare” By Pampel & Associates, Inc. Eric J. Pampel Portfolio Manager

2. Pampel & Associates, Inc. We do not think that Social Security is the biggest issue facing Americans. We think the biggest issue is the cost of healthcare.

3. Pampel & AssociatesPresents: What You Should Know About Long Term Care Living A Long Life Is A Near Certainty Planning For A Long Life Is Now A Necessity June 19 2008

4. Risks and Costs Risks of needing long term care: For persons who turn 65 in 1990, 43% will enter a nursing home at some point in their lives. Women are at higher risk than men, with slightly more than half entering a nursing home at some point in their lives. Single persons are five times more likely to need nursing home care than are married persons. Of those who enter a nursing home, 55% will need care for at least one year. One in five will need care for five or more years.

5. Risks and Costs Cost of long term care: The average cost of nursing home care in Indiana is $126 per day or $46,892 per year. With an average length of stay of 2.5 years, the average cost for a nursing home stay is more than $110,000. Medicare pays less than 10% of nursing home costs. Medicare was not designed to pay for long term care. Therefore strict requirements exist in order to qualify for Medicare coverage for nursing home care. (a) be in a hospital 3 days prior to discharge before being admitted to the nursing home (b) be admitted to a Medicare-certified facility (c) be placed in a Medicare-certified bed (d) need daily skilled care (care provided by a licensed nurse or therapist)

6. Risks and Cost Risks of needing long term care: (cont.) Should a person meet these requirements, Medicare will pay 100% for the first 20 days of nursing home care. From day 21 to day 100, Medicare pays everything except for $124 per day in 2007 (this figure usually increases each year) which the person must pay. Medicare stops paying after day 100. More than one-third of all nursing home care is paid for by individuals directly out-of-pocket.

7. Risks and Cost Risks of needing long term care: (cont.) Although half of all nursing home care is paid for by Medicaid, an individual must “spend down” his/her assets to the poverty level ($1,500 in Indiana) to qualify for assistance. Over 8.26 million long-term care insurance policies have been purchased through December, 2001. The most frequently cited reason for an individual purchasing long-term care insurance is to maintain independence andchoice.

8. Three Ways To Pay • Out of pocket • Public Funds: Medicare Medicaid • Insurance / Private

10. What is the Indiana Partnership? • State of Indiana Initiative • 1987 Enabling Legislation • Public – private partnership • One of 4 programs nationwide

11. Who are the “Partners”? • Indiana Department of Insurance • Indiana Long Term Care Insurance Program (Insurance Dept/OMPP) • Private Insurance Companies • Insurance Producers

12. What is its Purpose Incentives to purchase LTCI Containing Medicaid LTC Expenditures Improved, More Affordable Products Public Education

13. Indiana Long Term Care Insurance Program Special Program Features • Indiana Residents • Policy Types • Inflation Protection • Standardized Eligibility (Benefit Triggers) • Consumer Protection Features • Tax Breaks

14. Indiana Resident Only Indiana Residents may purchase a Partnership policy A resident is an individual who has an Indiana address

15. Policy Types Comprehensive Facility Only Minimum Benefits

16. Benefit Triggers Tax-Qualified Non-Tax Qualified

17. Consumer Protection Features • Win-Win-Win • Required Minimum Benefits • Pot of Dollars • Case Management • Contact Designee • Step Down Coverage Protection • Portability • Reciprocity

18. Other Partnership Policy Features • Indiana Residents • Indiana Partnership policies may only be sold to Indiana residents. However, insurance policy benefits will be paid regardless of the state in which the policyholder is receiving care. • The exception is the Medicaid Asset Protection • feature.

19. Other Partnership Policy Features • Two Policy Types • All participating insurance companies must offer a “comprehensive” policy containing nursing home and home & community-based benefits. • Insurance companies may choose to offer a “long term care facility” policy. This type of policy provides coverage primarily for institutional care. • There are also federally tax-qualified versions of • both policy types available.

20. Other Partnership Policy Features • Inflation Protection Feature • All Indiana Partnership policies contain an inflation protection feature. • With the inflation protection feature, both the daily benefit and the maximum benefit within the policy increase annually at a 5% compounded rate.

21. Other Partnership Policy Features • Benefit Triggers • In Indiana Partnership policies, participating companies must use the benefit triggers and definitions selected by the State. • With all Partnership policies paying out benefits for the same event, it makes it easier for the consumer to comparison shop.

22. Other Partnership Policy Features THIS POLICY QUALIFIES UNDER THE INDIANA LONG TERM CARE INSURANCE PROGRAM FOR MEDICAID ASSET PROTECTION. THIS POLICY MAY PROVIDE BENEFITS IN EXCESS OF THE ASSET PROTECTION PROVIDED IN THE INDIANA LONG TERM CARE INSURANCE PROGRAM.

23. Indiana Partnership Companies and Agents • Any company can participate as long as it obtains approval from the Indiana Department of Insurance for a policy that meets the Indiana Partnership standards. • All participating companies offer both traditional long term care insurance policies and Indiana Partnership policies. • Before an agent can market an Indiana Partnership policy, he/she must have first completed a 7-hour course about the Indiana Partnership Program.

24. Indiana Partnership Statistics (through December, 2006) • Sales • 47,000 applications received • 39,774 policies purchased • 32,616 policies in force • Purchasers • 56.9% female • 78.3% married • 94.7% first time buyer • Average age: 61 • Age range: 18 - 89

25. Indiana Partnership Statistics (Through December, 2006) • Policy Features • 89.1% of policies purchased include home health care • 77% of policies qualify for total asset protection • Common daily benefits chosen: $120 nursing home; $120 home health • Common elimination periods chosen: 30, 90, or 100 days

27. *Tax-Qualified LTC Policies: premiums (up to certain limits) may be deducted on a federal tax return AS PART OF the standard medical expense deduction. The benefits received from (federally) Tax-Qualified LTC polices will not be considered taxable income. Federal law requires Tax-Qualified policies to offer the option of purchasing a non-forfeiture benefit (a guarantee of some amount of benefit should the policyholder cancel the policy after owning it for a minimum number of years). This law also provides some guidance to the companies in determining the benefit triggers to use in their policies. “Medical Necessity” cannot be used as a benefit trigger in Tax-Qualified policies. Note: Indiana Law and Insurance Regulation require ALL types of long term care insurance policies in Indiana to offer a 30-day free look, prohibit the requirement of prior hospitalization in order to receive benefits in policies sold after July 1991, prohibit waiting periods of longer than 6 months for pre-existing conditions, and require policies to be either guaranteed renewable or noncancellable.

28. To Learn More: • Call toll-free 1-866-234-4582 for a free information packet on Indiana Partnership policies. • Visit www.longtermcareinsurance.IN.gov. • For specific company or policy information, schedule an appointment with an Indiana Partnership certified agent.

29. Savings vs. buying LTC insurance Example: Married couple, both age 55, purchase a Generation protector ll policy $150 daily benefit 5 year benefit period 90 calendar day elimination period 5% compound COLA 100% Home Care Benefit Preferred Risk Class Spousal discount

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