Long Term Care Insurance

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LTCI02-51
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Long-term care is

• Care at home
• Adult day care
• Care at an alternate care facility
• Care at a long-term care facility

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80 of long-term care services are provided
outside of a nursing home, either at home, in an
assisted living facility or adult day care.
Source Life Health Financial Services Edition,
National Underwriter, Paying for LTC a Big
Concern Survey. May 5, 1997.
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Why long-term care?

• Family
• Finances
• Independence
• Choices

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Ill depend on family.
Common misunderstandings about long-term care
According to the National Council on Aging, LTC
expenses drive about7 out of 10 senior families
into federal poverty levels within four months of
beginning institutionalized care.
Why the LTC Market is Heating Up National
Council on Aging, Best Review, May 1997.
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I am too young to consider long-term care now.
Fact 40 of people in nursing homes are under
age 65.
GAO Analysis of information from the Department
of Health and Human Services and the Institute
for Health Policy Studies at the University of
California, San Francisco. As cited in,
Long-term Care Current Issues and Future
Directions, General Accounting Office Report to
the Chairman, Special Committee on Aging, U.S.
Senate. (GAO/HEHS-95-109), April 13, 1995 pg.
7.
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I wont need long-term care!
Fact After age 65, you have a71.8 chance of
needing some form of home health care.
Lewin Group estimates based on the Brookings-ICF
Long-term Care Financing Model, 1992. As cited
in, Long-term Care Knowing the Risk, Paying
the Price. Health Insurance Association of
America, 1997 pg. 12.
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Sources Historical fire loss statistics, State
Farm Fire Actuarial Department, June 2001
Historical auto loss statistics, State Farm Auto
Actuarial Department, January 2002 Long-Term
Care Knowing the Risk, Paying the Price.
Health Insurance Association America. 1997
pg.12.
Chances of Loss
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Ill let Medicaid pay.

• Limited choices
• Asset and income limitations
• Loss of retirement savingsand legacy

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Ill let Medicare pay.
Fact Nationally, Medicare pays only 18 of
long-term care costs.
Source Calculated from, 1998 National Health
Expenditures. Centers for Medicare and Medicaid
formerly known as Health Care Financing
Administration, Office of Actuary, National
Health Statistics Group. Table 9.
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Ill pay for it myself.
153 per day 56,000 per year
Source Estimates fromCenters for Medicare and
Medicaid formerly known as Health Care
Financing Administration, Office of the Actuary,
National Health Statistics Group. As presented
in Nursing Homes. AARP Public Policy Institute
Fact Sheet. February 2001 pg. 3.
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How long could you afford this?
Source Estimates from Centers for Medicare and
Medicaid formerly known as Health Care
Financing Administration, Office of the Actuary,
National Health Statistics Group. As presented
in Nursing Homes. AARP Public Policy Institute
Fact Sheet. February 2001 pg. 3.
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What are your choices?

• Pay for it yourself
• Spend down your assets and let the government pay
  for it
• Purchase a long-term care insurance policy

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Why consider long-term care insurance?

• Long-Term Care Insurance
• helps you

• Protect your assets
• Protect your dignity
• Preserve your choices
• Maintain control

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What to look for when buyinglong-term care
insurance

• Benefit amounts appropriate for the cost of care
  in your area
• Options for care in the setting of your choice
• Proper inflation coverage
• Rate stability

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What to look for when buying long-term care
insurance

• Financial stabilityof the insurance company
• A knowledgeable agent or advisor you are
  comfortable asking questions

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If you wait to consider yourlong-term care
options

• Future alternatives for your care may be limited
• Choices that you have to make could be
  unsatisfactory
• The financial and emotional strain may be greater
  than you ever imagined

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Cost of Waiting

• Buy Today Wait 10
  Years Wait 20 years
  (Costs below adjusted to keep pace with
  inflation)
• 55 65
  75
• Daily Benefit 125
  200 325
• Annual Premium 1,265
  3,434 13,413
• Daily Benefit at age 85
• with inflation increase 540
  531 529
• Total Benefit
• at age 85 985,943
  968,454 966,138
• Total Premium
• at Age 85 37,950
  68,680 134,128
• Cost of Waiting due to
• difference in premium N/A
  -30,730 -96,178

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Summary

• You stand a very good chance of needing long-term
  care
• Long-term care costs more than most of us can
  afford to pay
• Long-term care insurance could allow you to stay
  at home

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For more information on Long-Term Care
Insurance contact your State Farm Agent
This policy is not connected with or endorsed by
the U.S. Government or the Federal Medicare
program. State Farm Mutual Automobile Insurance
Company Home Office Bloomington, Illinois
Statefarm.com