1. Planning for Your Long-Term Care Needs
Helping Make Sense of It All
Gardner Sherrill, CFP
Sherrill Wealth Management, LLC

2. Today’s Agenda
 What is Long-Term Care (LTC)?
 What are the chances of needing LTC?
 What are the costs associated with LTC?
 What are the funding sources to pay for LTC?
 Is LTC insurance right for me?

3. What is Long-Term Care (LTC)?
Long-Term Care is the type of assistance you would
need if you were unable to handle some of the basic
activities of daily living or if you require substantial
supervision due to a cognitive impairment

4. What are Activities of Daily Living (ADLs)?
Activities of Daily Living include:
 Eating
 Bathing
 Dressing
 Toileting
 Continence
 Transferring (from bed to chair)

5. What is a Cognitive Impairment?
A condition that leads you to require substantial
supervision to protect yourself or others from dangers
to health and safety
Supervision due to Alzheimer’s disease, brain injury
or stroke

6. Where Can I Get Long-Term Care Services?
 Your home
 Adult day care facility
 Assisted living facility
 A facility for people who can live somewhat independently,
but need assistance with basic activities of daily living
 Nursing Home
 Hospice care
 Care provided for a terminally ill patient; can be provided in
the home or at a facility

7. What are the chances…
…that YOU could need long-term care services?

8. Long-Term Care is a Reality
1) Source: National Clearinghouse for Long Term Care Information, U.S. Department of Health and Human Services:
Planning for LTC. Date accessed, January 18, 2012.
2) Source: American Association for Long-Term Care Insurance, 2010 LTCi Sourcebook
3) Source: Genworth Cost of Care 2012 Survey; April, 2012
3.8years2
Average length of
majority of long
term-care claims
4-8years3
Average life
expectancy after
Alzheimer's
diagnosis after age 65
70%Of people over age
65 will require
long-term care1¹

9. Not Just For Seniors
 40% of Americans who need long-term care are
between the age of 18 and 604
 Causes include auto accidents, sports and work-related
injuries, diseases and strokes
4) Life and Health Insurance Foundation for Education, http://www.lifehappens.org/who-needs-long-term-care-
insurance; 2012

10. Your Long-Term Care Experiences
 Who?
 Where?
 How was it paid for?
 Who provided the care?
 How long did the person need care?
 Was the care expected or unexpected?
 How did long-term care affect the family?

11. The Cost of Long-Term Care
National Average cost of care per year:
 Nursing Home (Private room): $81,0303
 Nursing Home (Semi-private room): $73,0003
 Assisted Living Facility: $39,6003
3) Source: Genworth Cost of Care 2012 Survey; April, 2012

12. The Cost of Long-Term Care
Average/ Median Cost of Care3
 Home health care - $18 per hour
 Annual cost (based on 40 hours of care): $41,184
 Average need of 4.5 years could total: $185,328
 Specialized HHC - $19 per hour
 Annual cost (based on 40 hours of care): $43,472
 Average need of 4.5 years could total: $195,624
 Adult Day Care averages $61 per day
 50 weeks, 5 days a week: $15,250
3) Source: Genworth Cost of Care 2012 Survey; April, 2012

13. Who Pays for LTC Services?
 Private/Company Health Insurance
 Medicare
 Medicaid
 Personal Assets
 Family
 LTC Insurance

14. Skilled Care vs. Custodial Care
Skilled Care
 Patient shows sign of improvement
 Has nothing to do with severity of illness or injury
 Is determined by the services received
 Is short-term to help recover from something
 Health Insurance and Medicare will pay
 Possible qualified treatment
 Short-term IVs or tube feeding
 Physical therapy – with improvement
 Speech therapy – with improvement

15. Skilled Care vs. Custodial Care
Custodial Care
 Patient does not show progress
 Respiratory therapy for emphysema
 Catheter maintenance
 Colostomy drain
 Chronic care can include care for strokes, paralysis and comas
 Help with bathing, dressing, other activities of daily living

16. Covering the Cost of LTC
 Private/company health insurance
 Skilled acute care only
 Not designed to pay for long-term chronic/custodial care

17. Medicare
 Deductible of $1,156 must be met first services are
covered.
 Medicare pays a maximum of 150 days for Hospital
Care6
 First 60 days are covered
 Days 61-90 require a copay of $289 per day
 Days 91-150 require a copay of $578 per day
 Medicare pays a maximum of 100 days for Skilled
Care6
 Covers skilled care, not custodial care
 First 20 days are provided at no cost
 Days 21-100 require a copay of $144.50 per day
6) The Official US Government Website for Medicare: http://medicare.gov; September, 2012

18. Medicaid
 Medicaid is for the impoverished7
 Welfare program that pays for skilled or chronic care
 Assets must be $2,000 or less (amount varies by state)
 With new five-year look-back period, giving away assets is
complicated
 Lose control over options for care – must be a Medicaid approved
facility
 Medicaid uses nursing homes first, not as a last resort
7) National Clearinghouse for Long-term Care Information, U.S. Department of Health and Human Services,
http://www.longtermcare.gov (2010).

19. Skilled Care vs. Custodial Care
 Long-Term Care:
 Is considered custodial care
 Neither chronic care nor custodial care are covered by private
insurance or Medicare
 What about Alzheimer’s or the fragility of the elderly?

20. Covering the Cost of LTC
 Personal Income and Assets
 One long-term illness may jeopardize your accumulated
retirement savings
 If the cost of care was $80,000 to $100,000 a year, how many
years of long-term care could you afford before you depleted
YOUR liquid assets?

21. Covering the Cost of LTC
 Family
 57% of primary caregivers provide care for more than 16 hours
each week; 31% more than 30 hours each week8
 83% of caregivers contributed financial (out-of-pocket), an
average of $8,800 annually8
 48% of caregivers lost their jobs or missed career opportunities
 Care was needed due to 45% for a specific illness, 42% age
related frailty, 23% for cognitive impairment, and 13% for
rehabilitation after an accident or surgery8
 Can your family afford to care for you?
 Would you want them to?
8) Beyond Dollars, The True Impact of Long Term Caring; Genworth Life Insurance; March 2012

22. The alternative that will protect your assets,
while protecting any long-term care needs you
may have…
Private Long-Term
Care Insurance

23. Preparing for Long-Term Care
 Only 17% of baby boomers have planned for long-term
care needs16
 Only 10% of adults over age 65 own a long-term care
insurance policy16
9) Sources: A Golden Opportunity: Emerging demographics, new legislature and budget shortfalls have converged to
create unprecedented long-term care insurance opportunities for both U.S. insurers and consumers, Resource,
LOMA; www.medicare.gov/LongTermCare 2/2008;
Have you thought about long-term care?

24. Advantages of Private LTC Insurance
 Avoid physical and financial dependence on family and
friends
 Protect your hard-earned assets
 Maintain choice on how and where to receive care
 Assure high-quality care, at an affordable price
 Stay at home when you need care
 Maintain your independence
Limitations may apply. Please reference policy documents for specific limitations

25. Who Should Plan for Long-Term Care?
 Who should be purchasing long-term care coverage?
 Anyone with assets to protect
 What about the wealthy?
 Self insuring possible but not cost efficient
 Middle Class concerns?
 Preserving a legacy
 Protecting healthy spouse from impoverishment

26. Self Insuring vs. LTC Insurance
Premiums Paid
Over 30 Yrs.
5% Return
Over 30 Yrs.
8% Return
Over 30 Yrs.
LTC Pool of Money
Daily Benefit
$200
Comparison based on:
• Personal savings of
$100 month with
5% and 8%
projected returns
• $100 John Hancock
LTC monthly
premium based on
Male, Age 50, NH
Resident, 90 Day EP,
15% Spousal
Discount with GPO
Inflation
• For illustrative
purposes ONLY
• Investment results
and premiums paid
will vary
0
50000
100000
150000
200000
250000
300000
350000
400000
$36,000
$82,302
$142,768
$365,000

27. Planning is Always the Best Option!
 Many often put off the decision of how they will afford
long-term care
 Too often, people wait until they critically need care. By then,
they may not qualify for insurance
 Remember: the healthier you are, the longer you are likely to live.
The longer you live, the more likely it is that you will need long-
term care
 Evaluate your situation
 Discuss the emotional and financial issues with your
family
 Explore all the options

28. Summary
 The likelihood of needing long-term care is significant
 The cost of such care can be financially devastating
 Not covered by heath insurance
 Not covered by Medicare after 100 days
 Long-term care coverage is another piece in financial
and retirement considerations
 Purchasing LTC insurance coverage may help preserve
financial well-being and provide peace of mind

29. DISCLOSURES:
The opinions voiced in this material are for general information only and not intended
to provide specific advice or recommendations for any individual. To determine which
investment (s) may be appropriate for you, consult your financial advisor prior to
investing. All performance referenced is historical and is no guarantee of future
results. All indices are unmanaged and cannot be invested into directly.
Life insurance policies contain exclusions, limitations, reductions of benefits, and
terms from keeping them in-force. Your financial professional can provide you with
costs and complete details.
[Add one of the disclosures listed in the notes (Tahoma 16) to meet compliance
requirements: IAS – IS – Bank/Credit Union - Hybrid.]

30. Thank You