ALTERNATIVE LONG-TERM
CARE STRATEGIES
Date
Night
Not your
typical
“night out”
conversation.
4 KINDS OF PEOPLE
1. Those that have been caregivers.
2. Those that currently are caregivers.
3. Those that will be caregivers.
4. Those that will need caregivers.
Rosalynn Carter, 1997
PURPOSE
• Heighten Awareness
• Enhance Understanding of Options
• Assist Evaluation Process
WHY LONG-TERM CARE MATTERS
1. Provides Dignity Beyond $
2. Protect Assets
3. Helps Reduce Family Disruption
4. Plans for Care of “Healthy” Spouse
5. Supports Financial Plan
PARADIGM SHIFT
Family Care-Giving
Then
Family Care-Giving Now
CHANGING REALITIES
THEN
NOW
Hardening of the

Dementia
Arteries

Alzheimer's

Senile

Nursing Home

Rest Home

Home Health Care

Live with Family

401(k) IRA

Pension

THEN
Chevy ’57


Rely Upon Family
Self Insure – “Spend Assets”
NOW
Toyota Prius - Hybrid
1)
2)
3)
4)
Rely Upon Family
Self Insure – Rely Upon Assets
Accumulated
Long-Term Care Insurance
Hybrid Long-Term Care Concepts
SELF “INSURANCE”
What is most efficient way to spend down assets?
Example:
$500,000 – Stocks
$500,000 – IRA’s
What does long-term care cost?
LONG-TERM
CARE POLICIES EMERGE
Nursing Home
“Insurance”
 Mid ’70’s




Insure
Unknowns:
L: Longevity H: Our Health
Learning Curve for
Carriers
Today: Fewer Carriers/Steep Premiums
Jumps
LONG-TERM CARE INSURANCE

Indemnity – Insurance Company pays claim


Example:

60 year old husband/wife

Both Good Health

90 Day Elimination Period

5% Compound Inflation

$150 daily benefit

Annual Premium $3,800 and up

Premiums may increase

LTC Distribution – Tax Free
Tax Considerations – Talk To Your Tax
Consultant
This is a hypothetical illustration and does not represent an actual investment. There is no
guarantee similar results can be achieved. All guarantees are subject to the claims paying
ability of the issuing insurance company.
HYBRID
LIFE INSURANCE – LONG-TERM CARE

Example:

60 year old female, good health, non-smoker

Premium: $50,000 (Repositioning Assets)

No Elimination Period

LTC “Balance” $250,149

Reimbursement – Insurance company pays you back
after expense incurred. Monthly benefit 4 or 6
years.

Monthly Benefit $3,474 (4 Years)

Cash value accumulation

No Surrender fees

Death Benefit not taxable

LTC Distribution – tax free
This is a hypothetical illustration and does not represent an actual investment. There is no guarantee similar
results can be achieved. All guarantees, including optional benefits such as riders, are subject to the claims
paying ability of the issuing insurance company.
HYBRID
RETIREMENT ANNUITY


– LONG-TERM CARE RIDER
Example:
60 year old female, good health, non-smoker

Premium: $50,000

90 Day Elimination Period

LTC “Balance” – Rising with Age


60 - $202,767 ($2,112/mo)

80 - $259,920 ($2,708/mo)
Reimbursement – Insurance company pays you back after
expense incurred. Monthly benefit up to 8 years.

Cash value accumulation

9 Year Surrender Schedule

Death Benefit – gains are taxable to beneficiaries.

LTC Distribution – tax free

Option to convert to future income stream instead of LTC
benefit
The hypothetical case study results are for illustrative purposes only and should not be deemed a representation of
past or future results. This example does not represent any specific product, nor does it reflect sales charges or other
expenses that may be required for some products. No representation is made as to the accurateness of the analysis.
All guarantees, including optional benefits such as riders, are subject to the claims paying ability of the issuing
insurance company.
All optional benefits such as riders and bonuses are available for an additional cost. It is important to weigh the costs
against the benefits when adding such options to an annuity/life insurance contract. The cost for riders varies widely
but is generally between .15% to .75% of the account.
LONG TERM CARE AND HYBRID
BENEFITS ARE THE SAME –
COVERING:
• Home Health Care
• Adult Day Care
•Assisted Living
•Nursing Home
KEY DIFFERENCES
Long-Term Care
Hybrid
OTHER CONSIDERATIONS TO “HYBRID”
STRATEGY

Cash Value Exchanges

Pension Protection Act and Annuities

Ohio Long Term Care “Partnership”
CONCLUSION

No “Silver Bullets”

Process – “Plan Centric”

Always Have “Unknowns”

Health Care Issues Remain

Industry Adapts – New Options

Questions?
The information presented is not intended to constitute tax
or legal advice. Please consult with your attorney or
accountant for advice specific to your situation.
Securities and Investment Advisory Services offered through
NFP Securities, Inc., member FINRA/SIPC , Kehoe
Financial Advisors, LLC is not affiliated with NFP
Securities, Inc.