Long Term Care Insurance

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Long Term Care Insurance

• Preserve your Lifestyle and Help Protect Your
  Life Savings

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What is Long Term Care?

• Long term care addresses a wide range of
  supportive servicesprovided to those who lack
  capacity for self-care due to chronicillness,
  disability or cognitive disorder.
• Long term care services generally last for an
  extended period oftime. Levels of care range
  from skilled services to assistance withthe
  basic routines of daily life.
• A small percentage of long term care services
  provide skilled services in nursing facilities,
  but most long term care is custodial, provided
  either in facilities or at home.

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Activities of Daily Living (ADLs)

• Bathing
• Dressing
• Eating
• Toileting
• Transferring
• Continence

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Cognitive Impairment of

• Memory
• Orientation
• Reasoning

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Where is Long Term Care Provided?

• At Home
• Assisted Care Facilities 1
• Nursing Homes
• Adult Day Care 2
• Alzheimers Facilities

1. In California, Residential Care Facility 2. In
Idaho and Oregon, Adult Foster Care
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The Crisis in Long Term Care

• Growing Numbers, Needs and Costs

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An Aging Population

• By the year 2030, the older populationwill more
  than double to about 70 million.

Source A Profile of Older Americans 2001
Administration on Aging, US Dept of Health and
Human Services
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Anticipated Growth Percentage of 65-and-Over
Populationversus Total U.S. Population
65 and Over Population
Total U.S. Population
18
16
14
12
10
8
6
4
2
0
Note Data for the years 2000 to 2050 are
middle-series projections of the
populationReference population These data refer
to the resident population.
Source U.S. Census Bureau Decennial Census Data
Population Projections, Published in Connings
Industry Insight, Issue 4, Long Term Care
Insurance, Published June 2002
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Disability Prevalence by Age
Source A Profile of Older Americans 2001
Report Administration on Aging, www.aoa.gov
12/21/2001
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Changing Family Structures

• Fewer children
• Families living far apart
• Women in the workforce

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More than half of all women and a thirdof all
men who survive to age 65 are expectedto spend
time in a nursing home before they die.
Source Wall Street Journal, 2/21/2001
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Most people traditionally have gotten long term
careat home, usually from a family member. But
today, theres often no one nearby to help out
a result of high divorce rates, smaller families,
and more mobility.
Source US News World Report, 5/21/01
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The Crisis in Long Term CareGrows out of
Increasing Costs

• The national average cost of a yearin a nursing
  home is 54,900

Source GE Long Term Care Insurance Nursing Home
Survey, 3/4/2002
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Financing Long Term Care

• Who Pays for Nursing Home and Home Health Care?

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Who Pays for Nursing Home Care?
Private Health Insurance
Other Private Funds
7.5
4.0
Medicare
10.8
25.1
Out-of-Pocket
2.3
OtherPublic Funds
50.3
Medicaid
Source Centers for Medicare Medicaid Services,
Office of the Actuary, 2003 Projected
Expenditures Data Released, January
2002 http//cms.hhs.gov/statistics/nhe/projection
s-2001/proj2001.pdf
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Who Pays for Home Care?
Private Health Insurance
19.7
Other Private Funds
4.7
18.6
Out-of-Pocket
32.1
Medicare
5
OtherPublic Funds
19.9
Medicaid
Source Centers for Medicare Medicaid Services,
Office of the Actuary, 2003 Projected
Expenditures Data Released, January
2002 http//cms.hhs.gov/statistics/nhe/projection
s-2001/proj2001.pdf
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Self-Insuring

• Are You Willing to Take the Risk?

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Public Programs Will Not Resolve the Long Term
Care Crisis
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Long Term Care Insurance

• Long Term Care Insurance Policies Sold

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Estimated Number of In-Force Policies
(numbers in millions)
Source Connings Industry Insight, Long Term Care
Insurance, June 2002.
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You and Your Family are Insured for theOther
Major Risks to Your Financial Security

• Health Insurance
• Home Insurance
• Auto Insurance
• Life Insurance

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Reasons for Purchasing Long Term Care Insurance

• Help Protect Assets
• Help Preserve Independence
• Avoid Depending Upon Family
• Quality of Care Choices

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Is Long Term Care Insurance Appropriate for You?
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Selecting a Long Term Care Insurance Policy

• Outline of Coverage
• Benefit Triggers
• Coverage of all Levels of Care
• Inflation Protection Option

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Important Features and Options ofthe Individual
Policy that You Select

• Premium
• Daily Benefit Amount
• Lifetime Maximum
• Tax Qualified
• Care Coordinator

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As Many as 130 to 140 CompaniesCurrently Sell
Long Term Care Insurance

• How Can You Choose the Right One?

Connings Industry Insight, Long Term Care
Insurance, p7, June 2002.
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Selecting a Long Term Care Insurance Company
Select a company that has a longstanding national
reputation for product quality and customer
service. Ask for the insurance companys
financial rating.1 Investigate the companys
financial strength and claims paying ability by
checking its ratings with the A.M. Best rating
service and the Standard and Poors Rating. These
ratings result from analyses of a companys
financial records.1 Make sure the company you
select has been in the long term care insurance
business for more than 15 years. The number of
years a company has been selling LTC insurance is
an indicator of their experience with stabilizing
premium rates. Select a company with a large
number of policies sold. The greater the number
of policies, the larger the risk pool from which
a company pays its claims. Finally, make sure
that the agent selling the policy has long term
care insurance expertise.
1 Health Insurance Association of America (HIAA),
A Guide to Long Term Care Insurance, 2002.
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Long Term Care Insurance

• Help Preserve Your Independence
• Help Protect Your Assets