Sovereign Retirement SolutionsPaul Tarins, RICP®Retirement Income Planner941 West Morse BlvdSuite 100Winter Park, FL 32789407-645-5804paul@sovereignretirementsolutions.comwww.SovereignRetirementSolutions.com

Five Questions about Long-Term Care

August 30, 2015

1. What is long-term care?Long-term care refers to the ongoing services andsupport needed by people who have chronic healthconditions or disabilities. There are three levels oflong-term care:

• Skilled care: Generally round-the-clock care that'sgiven by professional health care providers suchas nurses, therapists, or aides under a doctor'ssupervision.

• Intermediate care: Also provided by professionalhealth care providers but on a less frequent basisthan skilled care.

• Custodial care: Personal care that's often given byfamily caregivers, nurses' aides, or home healthworkers who provide assistance with what arecalled "activities of daily living" such as bathing,eating, and dressing.

Long-term care is not just provided in nursinghomes--in fact, the most common type of long-termcare is home-based care. Long-term care servicesmay also be provided in a variety of other settings,such as assisted living facilities and adult day carecenters.

2. Why is it important to plan forlong-term care?No one expects to need long-term care, but it'simportant to plan for it nonetheless. Here are twoimportant reasons why:

The odds of needing long-term care are high:

• Approximately 70% of people will need long-termcare at some point during their lifetimes afterreaching age 65*

• Approximately 8% of people between ages 40 and50 will have a disability that may require long-termcare services*

The cost of long-term care can be expensive:

For many, the cost of long-term care can beexpensive, absorbing income and depleting savings.

Some of the average costs in the United States forlong-term care* include:

• $6,235 per month, or $74,820 per year for asemi-private room in a nursing home

• $6,965 per month, or $83,580 per year for aprivate room in a nursing home

• $3,293 per month for a one-bedroom unit in anassisted living facility

• $21 per hour for a home health aide

*U.S. Department of Health and Human Services,December 1, 2014

3. Doesn't Medicare pay for long-termcare?Many people mistakenly believe that Medicare, thefederal health insurance program for older Americans,will pay for long-term care. But Medicare providesonly limited coverage for long-term care services suchas skilled nursing care or physical therapy. Andalthough Medicare provides some home health carebenefits, it doesn't cover custodial care, the type ofcare older individuals most often need.

Medicaid, which is often confused with Medicare, isthe joint federal-state program that two-thirds ofnursing home residents currently rely on to pay someof their long-term care expenses. But to qualify forMedicaid, you must have limited income and assets,and although Medicaid generally covers nursinghome care, it provides only limited coverage for homehealth care in certain states.

4. Can't I pay for care out of pocket?The major advantage to using income, savings,investments, and assets (such as your home) to payfor long-term care is that you have the most controlover where and how you receive care. But becausethe cost of long-term care is high, you may havetrouble affording extended care if you need it.

Long-term care is notjust provided in nursinghomes--in fact, the mostcommon type oflong-term care ishome-based care.

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Prepared by Broadridge Investor Communication Solutions, Inc. Copyright 2015

IMPORTANT DISCLOSURES

Broadridge Investor Communication Solutions, Inc. does not provide investment, tax, or legal advice. The information presented here is notspecific to any individual's personal circumstances.

To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purposeof avoiding penalties that may be imposed by law. Each taxpayer should seek independent advice from a tax professional based on his or herindividual circumstances.

These materials are provided for general information and educational purposes based upon publicly available information from sources believedto be reliable—we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any timeand without notice.

Investment advisory services are offered through a separate entity, Portfolio Medics, a registered investment advisor. Sovereign RetirementSolutions and Portfolio Medics are not affiliated. Sovereign Retirement Solutions provides insurance services to clients through Paul M TarinsLLC.

5. Should I buy long-term careinsurance?Like other types of insurance, long-term careinsurance protects you against a specific financialrisk--in this case, the chance that long-term care willcost more than you can afford. In exchange for yourpremium payments, the insurance company promisesto cover part of your future long-term care costs.Long-term care insurance can help you preserve yourassets and guarantee that you'll have access to arange of care options. However, it can be expensive,so before you purchase a policy, make sure you canafford the premiums both now and in the future.

The cost of a long-term care policy depends primarilyon your age (in general, the younger you are whenyou purchase a policy, the lower your premium willbe), but it also depends on the benefits you choose. Ifyou decide to purchase long-term care insurance,here are some of the key features to consider:

• Benefit amount: The daily benefit amount is themaximum your policy will pay for your care eachday, and generally ranges from $50 to $350.

• Benefit period: The length of time your policy willpay benefits (e.g., 2 years, 4 years, lifetime).

• Elimination period: The number of days you mustpay for your own care before the policy beginspaying benefits (e.g., 20 days, 90 days).

• Types of facilities included: Many policies covercare in a variety of settings including your ownhome, assisted living facilities, adult day carecenters, and nursing homes.

• Inflation protection: With inflation protection, yourbenefit will increase by a certain percentage eachyear. It's an optional feature available at additionalcost, but having it will enable your coverage tokeep pace with rising prices.

Your insurance agent or a financial professional canhelp you compare long-term care insurance policiesand answer any questions you may have.

Deductions for Long-Term CareInsurance Premiums: 2014 & 2015

Age 2014 Limit 2015 Limit

40 or under $370 $380

41-50 $700 $710

51-60 $1,400 $1,430

61-70 $3,720 $3,800

70+ $4,660 $4,750

Understandably, manypeople put off planningfor long-term care. Butalthough it's hard to facethe fact that healthproblems may somedayresult in a loss ofindependence, if youbegin planning now,you'll have more optionsopen to you in the future.

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