Planit:Long-Term Care Calculator Exercise Answer Key

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Contents 1 Question One: 1.1 Answer: 2 Question Two: 2.1 Answer: 3 Question One: 3.1 Answer: 4 Question Two: 4.1 Answer: 5 Question One: 5.1 Answer: 6 Question Two: 6.1 Answer: 7 Question One: 7.1 Answer: 8 Question Two: 8.1 Answer: 9 Question One: 9.1 Answer: 10 Question Two: 10.1 Answer: 11 Question One: 11.1 Answer: 12 Question Two: 12.1 Answer: 13 Question One: 13.1 Answer: 14 Question Two: 14.1 Answer: 15 Question One: 15.1 Answer: 16 Question Two: 16.1 Answer: 17 Question One: 17.1 Answer: 18 Question Two: 18.1 Answer: 19 Question One: 19.1 Answer: 20 Question Two: 20.1 Answer: 21 Question One: 21.1 Answer: 22 Question Two: 22.1 Answer: 23 Question One: 23.1 Answer: 24 Question Two: 24.1 Answer: 25 Question One: 25.1 Answer: 26 Question Two: 26.1 Answer: 27 Question One: 27.1 Answer: 28 Question Two: 28.1 Answer: 29 Question One: 29.1 Answer: 30 Question Two: 30.1 Answer: 31 Question One: 31.1 Answer: 32 Question Two: 32.1 Answer: 33 Question One: 33.1 Answer: 34 Question Two: 34.1 Answer: Question One: Jesse Jones wants to purchase long-term care insurance to fund home care expenses and facility care expenses from his age 75 and 85 respectively. However, he is electing to insure 70% as opposed to complete self-insurance or full 100% insurance. Jesse’s detailed information is below: Current Age: 55 Retire By: 55 Mortality: 90 Inflation: 3.0% Rate of Return: 9.0% Marginal Tax Rate: 20% Cost of Home Care/Month: $1500 Cost of Facility Care/Month: $3500 How much is the present value of the cost to self-insure these expenses? $_____ How much is the present value of insuring 70% of these expenses? $______ How much is the present value of insuring 100% of these expenses? $_____ Answer: Select Long-Term Care Calculator from the calculator drop-down menu on Home page. 1. Enter age 55 into the Current Age field 2. In the Retire By field enter age 55 3. In the Mortality field enter age 90 4. Leave the Inflation assumption at the default of 3% if this is not the default then change it. 5. Change the Return assumption to 9.0% 6. Set the Marginal Tax Rate to 20% 7. Change the Percentage to Insure option to 70% Note: This percentage does not affect the calculations, but will allow you to see the results listed below if he chose to purchase insurance to cover 70% of the costs, and self-insure the remaining 30%. 8. Under Home Care Coverage, set the Estimated Costs/Month to $1500 9. Under Facility Care Coverage, set the Estimated Costs/Month to $3500 10. Click the button underneath the results section. 11. Identify and record the Present Value of Capital for the options of Self-Insured, 70% Insured and 100% Insured Question Two: Charlie wants to have an Emergency Fund for the event that he has to fund long-term care expenses himself. He does not currently have any money in this Emergency Fund, but plans to save an indexed amount of $5,000 annually. Given that Charlie wants to self-insure as much as possible, within his savings limits, what percentage of the expenses would you elect him to insure – 0%, 50% or 100%? Current Age: 40 Retire By: 55 Mortality: 90 Inflation: 3.0% Rate of Return: 9.0% Marginal Tax Rate: 35% Home Care Expenses/Month: $1500 Home Care Starting Age: 80 Facility Care Expenses/Month: $3500 Facility Care Starting Age: 85 Answer: Select Long-Term Care Calculator from the calculator drop-down menu on Home page. 1. Enter age 40 into the Current Age field 2. In the Retire By field enter age 55 3. In the Mortality field enter age 90 4. Leave the Inflation assumption at the default of 3% if this is not the default change it to 3%. 5. Change the Return assumption to 9% 6. Set the Marginal Tax Rate to 35% 7. Change the Percentage to Insure option to 50% 8. Under Home Care Coverage, set the Estimated Costs/Month to $1500 and the starting age to 80. 9. Under Facility Care Coverage, set the Estimated Costs/Month to $3500 and the starting age to 85. 10. Click the button underneath the results section. 11. Identify and record the Indexed Savings to Fund Difference for the options of Self- Insured, 50% Insured and 100% Insured The results should be $7,824, $3,912 and 0 respectively. 12. Identify which option is under the $5,000 savings amount your client can afford. Answer: the 50% insured option $3,912 is under the $5,000 savings amount your client can afford. Thus, he should purchase a long-term care policy to cover 50% of the long-term care expenses.

United States of America

Question One: Jesse Jones wants to purchase long-term care insurance to fund home care expenses and facility care expenses from his age 75 and 85 respectively. However, he is electing to insure 70% as opposed to complete self-insurance or full 100% insurance. Jesse’s detailed information is below: Current Age: 55 Retire By: 55 Mortality: 90 Inflation: 3.0% Rate of Return: 9.0% Marginal Tax Rate: 20% Cost of Home Care/Month: $1500 Cost of Facility Care/Month: $3500 How much is the present value of the cost to self-insure these expenses? $_____ How much is the present value of insuring 70% of these expenses? $______ How much is the present value of insuring 100% of these expenses? $_____ Answer: Select Long-Term Care Calculator from the calculator drop-down menu on Home page. 1. Enter age 55 into the Current Age field 2. In the Retire By field enter age 55 3. In the Mortality field enter age 90 4. Leave the Inflation assumption at the default of 3% if this is not the default then change it. 5. Change the Return assumption to 9.0% 6. Set the Marginal Tax Rate to 20% 7. Change the Percentage to Insure option to 70% Note: This percentage does not affect the calculations, but will allow you to see the results listed below if he chose to purchase insurance to cover 70% of the costs, and self-insure the remaining 30%. 8. Under Home Care Coverage, set the Estimated Costs/Month to $1500 9. Under Facility Care Coverage, set the Estimated Costs/Month to $3500 10. Click the button underneath the results section. 11. Identify and record the Present Value of Capital for the options of Self-Insured, 70% Insured and 100% Insured Question Two: Charlie wants to have an Emergency Fund for the event that he has to fund long-term care expenses himself. He does not currently have any money in this Emergency Fund, but plans to save an indexed amount of $5,000 annually. Given that Charlie wants to self-insure as much as possible, within his savings limits, what percentage of the expenses would you elect him to insure – 0%, 50% or 100%? Current Age: 40 Retire By: 55 Mortality: 90 Inflation: 3.0% Rate of Return: 9.0% Marginal Tax Rate: 35% Home Care Expenses/Month: $1500 Home Care Starting Age: 80 Facility Care Expenses/Month: $3500 Facility Care Starting Age: 85 Answer: Select Long-Term Care Calculator from the calculator drop-down menu on Home page. 1. Enter age 40 into the Current Age field 2. In the Retire By field enter age 55 3. In the Mortality field enter age 90 4. Leave the Inflation assumption at the default of 3% if this is not the default change it to 3%. 5. Change the Return assumption to 9% 6. Set the Marginal Tax Rate to 35% 7. Change the Percentage to Insure option to 50% 8. Under Home Care Coverage, set the Estimated Costs/Month to $1500 and the starting age to 80. 9. Under Facility Care Coverage, set the Estimated Costs/Month to $3500 and the starting age to 85. 10. Click the button underneath the results section. 11. Identify and record the Indexed Savings to Fund Difference for the options of Self- Insured, 50% Insured and 100% Insured The results should be $7,824, $3,912 and 0 respectively. 12. Identify which option is under the $5,000 savings amount your client can afford. Answer: the 50% insured option $3,912 is under the $5,000 savings amount your client can afford. Thus, he should purchase a long-term care policy to cover 50% of the long-term care expenses.

Argentina

Question One: Jesse Jones wants to purchase long-term care insurance to fund home care expenses and facility care expenses from his age 75 and 85 respectively. However, he is electing to insure 70% as opposed to complete self-insurance or full 100% insurance. Jesse’s detailed information is below: Current Age: 55 Retire By: 55 Mortality: 90 Inflation: 3.0% Rate of Return: 9.0% Marginal Tax Rate: 20% Cost of Home Care/Month: $1500 Cost of Facility Care/Month: $3500 How much is the present value of the cost to self-insure these expenses? $_____ How much is the present value of insuring 70% of these expenses? $______ How much is the present value of insuring 100% of these expenses? $_____ Answer: Select Long-Term Care Calculator from the calculator drop-down menu on Home page. 1. Enter age 55 into the Current Age field 2. In the Retire By field enter age 55 3. In the Mortality field enter age 90 4. Leave the Inflation assumption at the default of 3% if this is not the default then change it. 5. Change the Return assumption to 9.0% 6. Set the Marginal Tax Rate to 20% 7. Change the Percentage to Insure option to 70% Note: This percentage does not affect the calculations, but will allow you to see the results listed below if he chose to purchase insurance to cover 70% of the costs, and self-insure the remaining 30%. 8. Under Home Care Coverage, set the Estimated Costs/Month to $1500 9. Under Facility Care Coverage, set the Estimated Costs/Month to $3500 10. Click the button underneath the results section. 11. Identify and record the Present Value of Capital for the options of Self-Insured, 70% Insured and 100% Insured Question Two: Charlie wants to have an Emergency Fund for the event that he has to fund long-term care expenses himself. He does not currently have any money in this Emergency Fund, but plans to save an indexed amount of $5,000 annually. Given that Charlie wants to self-insure as much as possible, within his savings limits, what percentage of the expenses would you elect him to insure – 0%, 50% or 100%? Current Age: 40 Retire By: 55 Mortality: 90 Inflation: 3.0% Rate of Return: 9.0% Marginal Tax Rate: 35% Home Care Expenses/Month: $1500 Home Care Starting Age: 80 Facility Care Expenses/Month: $3500 Facility Care Starting Age: 85 Answer: Select Long-Term Care Calculator from the calculator drop-down menu on Home page. 1. Enter age 40 into the Current Age field 2. In the Retire By field enter age 55 3. In the Mortality field enter age 90 4. Leave the Inflation assumption at the default of 3% if this is not the default change it to 3%. 5. Change the Return assumption to 9% 6. Set the Marginal Tax Rate to 35% 7. Change the Percentage to Insure option to 50% 8. Under Home Care Coverage, set the Estimated Costs/Month to $1500 and the starting age to 80. 9. Under Facility Care Coverage, set the Estimated Costs/Month to $3500 and the starting age to 85. 10. Click the button underneath the results section. 11. Identify and record the Indexed Savings to Fund Difference for the options of Self- Insured, 50% Insured and 100% Insured The results should be $7,824, $3,912 and 0 respectively. 12. Identify which option is under the $5,000 savings amount your client can afford. Answer: the 50% insured option $3,912 is under the $5,000 savings amount your client can afford. Thus, he should purchase a long-term care policy to cover 50% of the long-term care expenses.

Brazil

Question One: Jesse Jones wants to purchase long-term care insurance to fund home care expenses and facility care expenses from his age 75 and 85 respectively. However, he is electing to insure 70% as opposed to complete self-insurance or full 100% insurance. Jesse’s detailed information is below: Current Age: 55 Retire By: 55 Mortality: 90 Inflation: 3.0% Rate of Return: 9.0% Marginal Tax Rate: 20% Cost of Home Care/Month: $1500 Cost of Facility Care/Month: $3500 How much is the present value of the cost to self-insure these expenses? $_____ How much is the present value of insuring 70% of these expenses? $______ How much is the present value of insuring 100% of these expenses? $_____ Answer: Select Long-Term Care Calculator from the calculator drop-down menu on Home page. 1. Enter age 55 into the Current Age field 2. In the Retire By field enter age 55 3. In the Mortality field enter age 90 4. Leave the Inflation assumption at the default of 3% if this is not the default then change it. 5. Change the Return assumption to 9.0% 6. Set the Marginal Tax Rate to 20% 7. Change the Percentage to Insure option to 70% Note: This percentage does not affect the calculations, but will allow you to see the results listed below if he chose to purchase insurance to cover 70% of the costs, and self-insure the remaining 30%. 8. Under Home Care Coverage, set the Estimated Costs/Month to $1500 9. Under Facility Care Coverage, set the Estimated Costs/Month to $3500 10. Click the button underneath the results section. 11. Identify and record the Present Value of Capital for the options of Self-Insured, 70% Insured and 100% Insured Question Two: Charlie wants to have an Emergency Fund for the event that he has to fund long-term care expenses himself. He does not currently have any money in this Emergency Fund, but plans to save an indexed amount of $5,000 annually. Given that Charlie wants to self-insure as much as possible, within his savings limits, what percentage of the expenses would you elect him to insure – 0%, 50% or 100%? Current Age: 40 Retire By: 55 Mortality: 90 Inflation: 3.0% Rate of Return: 9.0% Marginal Tax Rate: 35% Home Care Expenses/Month: $1500 Home Care Starting Age: 80 Facility Care Expenses/Month: $3500 Facility Care Starting Age: 85 Answer: Select Long-Term Care Calculator from the calculator drop-down menu on Home page. 1. Enter age 40 into the Current Age field 2. In the Retire By field enter age 55 3. In the Mortality field enter age 90 4. Leave the Inflation assumption at the default of 3% if this is not the default change it to 3%. 5. Change the Return assumption to 9% 6. Set the Marginal Tax Rate to 35% 7. Change the Percentage to Insure option to 50% 8. Under Home Care Coverage, set the Estimated Costs/Month to $1500 and the starting age to 80. 9. Under Facility Care Coverage, set the Estimated Costs/Month to $3500 and the starting age to 85. 10. Click the button underneath the results section. 11. Identify and record the Indexed Savings to Fund Difference for the options of Self- Insured, 50% Insured and 100% Insured The results should be $7,824, $3,912 and 0 respectively. 12. Identify which option is under the $5,000 savings amount your client can afford. Answer: the 50% insured option $3,912 is under the $5,000 savings amount your client can afford. Thus, he should purchase a long-term care policy to cover 50% of the long-term care expenses.

United Kingdom

Question One: Jesse Jones wants to purchase long-term care insurance to fund home care expenses and facility care expenses from his age 75 and 85 respectively. However, he is electing to insure 70% as opposed to complete self-insurance or full 100% insurance. Jesse’s detailed information is below: Current Age: 55 Retire By: 55 Mortality: 90 Inflation: 3.0% Rate of Return: 9.0% Marginal Tax Rate: 20% Cost of Home Care/Month: £1500 Cost of Facility Care/Month: £3500 How much is the present value of the cost to self-insure these expenses? $_____ How much is the present value of insuring 70% of these expenses? $______ How much is the present value of insuring 100% of these expenses? $_____ Answer: Select Long-Term Care Calculator from the calculator drop-down menu on Home page. 1. Enter age 55 into the Current Age field 2. In the Retire By field enter age 55 3. In the Mortality field enter age 90 4. Leave the Inflation assumption at the default of 3% if this is not the default then change it. 5. Change the Return assumption to 9.0% 6. Set the Marginal Tax Rate to 20% 7. Change the Percentage to Insure option to 70% Note: This percentage does not affect the calculations, but will allow you to see the results listed below if he chose to purchase insurance to cover 70% of the costs, and self-insure the remaining 30%. 8. Under Home Care Coverage, set the Estimated Costs/Month to £1500 9. Under Facility Care Coverage, set the Estimated Costs/Month to £3500 10. Click the button underneath the results section. 11. Identify and record the Present Value of Capital for the options of Self-Insured, 70% Insured and 100% Insured Question Two: Charlie wants to have an Emergency Fund for the event that he has to fund long-term care expenses himself. He does not currently have any money in this Emergency Fund, but plans to save an indexed amount of £5,000 annually. Given that Charlie wants to self-insure as much as possible, within his savings limits, what percentage of the expenses would you elect him to insure – 0%, 50% or 100%? Current Age: 40 Retire By: 55 Mortality: 90 Inflation: 3.0% Rate of Return: 9.0% Marginal Tax Rate: 35% Home Care Expenses/Month: £1500 Home Care Starting Age: 80 Facility Care Expenses/Month: £3500 Facility Care Starting Age: 85 Answer: Select Long-Term Care Calculator from the calculator drop-down menu on Home page. 1. Enter age 40 into the Current Age field 2. In the Retire By field enter age 55 3. In the Mortality field enter age 90 4. Leave the Inflation assumption at the default of 3% if this is not the default change it to 3%. 5. Change the Return assumption to 9% 6. Set the Marginal Tax Rate to 35% 7. Change the Percentage to Insure option to 50% 8. Under Home Care Coverage, set the Estimated Costs/Month to £1500 and the starting age to 80. 9. Under Facility Care Coverage, set the Estimated Costs/Month to £3500 and the starting age to 85. 10. Click the button underneath the results section. 11. Identify and record the Indexed Savings to Fund Difference for the options of Self- Insured, 50% Insured and 100% Insured The results should be £7,824, £3,912 and 0 respectively. 12. Identify which option is under the £5,000 savings amount your client can afford. Answer: the 50% insured option £3,912 is under the £5,000 savings amount your client can afford. Thus, he should purchase a long-term care policy to cover 50% of the long-term care expenses.

Russia

Question One: Jesse Jones wants to purchase long-term care insurance to fund home care expenses and facility care expenses from his age 75 and 85 respectively. However, he is electing to insure 70% as opposed to complete self-insurance or full 100% insurance. Jesse’s detailed information is below: Current Age: 55 Retire By: 55 Mortality: 90 Inflation: 3.0% Rate of Return: 9.0% Marginal Tax Rate: 20% Cost of Home Care/Month: R1500 Cost of Facility Care/Month: R3500 How much is the present value of the cost to self-insure these expenses? $_____ How much is the present value of insuring 70% of these expenses? $______ How much is the present value of insuring 100% of these expenses? $_____ Answer: Select Long-Term Care Calculator from the calculator drop-down menu on Home page. 1. Enter age 55 into the Current Age field 2. In the Retire By field enter age 55 3. In the Mortality field enter age 90 4. Leave the Inflation assumption at the default of 3% if this is not the default then change it. 5. Change the Return assumption to 9.0% 6. Set the Marginal Tax Rate to 20% 7. Change the Percentage to Insure option to 70% Note: This percentage does not affect the calculations, but will allow you to see the results listed below if he chose to purchase insurance to cover 70% of the costs, and self-insure the remaining 30%. 8. Under Home Care Coverage, set the Estimated Costs/Month to R1500 9. Under Facility Care Coverage, set the Estimated Costs/Month to R3500 10. Click the button underneath the results section. 11. Identify and record the Present Value of Capital for the options of Self-Insured, 70% Insured and 100% Insured Question Two: Charlie wants to have an Emergency Fund for the event that he has to fund long-term care expenses himself. He does not currently have any money in this Emergency Fund, but plans to save an indexed amount of R5,000 annually. Given that Charlie wants to self-insure as much as possible, within his savings limits, what percentage of the expenses would you elect him to insure – 0%, 50% or 100%? Current Age: 40 Retire By: 55 Mortality: 90 Inflation: 3.0% Rate of Return: 9.0% Marginal Tax Rate: 35% Home Care Expenses/Month: R1500 Home Care Starting Age: 80 Facility Care Expenses/Month: R3500 Facility Care Starting Age: 85 Answer: Select Long-Term Care Calculator from the calculator drop-down menu on Home page. 1. Enter age 40 into the Current Age field 2. In the Retire By field enter age 55 3. In the Mortality field enter age 90 4. Leave the Inflation assumption at the default of 3% if this is not the default change it to 3%. 5. Change the Return assumption to 9% 6. Set the Marginal Tax Rate to 35% 7. Change the Percentage to Insure option to 50% 8. Under Home Care Coverage, set the Estimated Costs/Month to R1500 and the starting age to 80. 9. Under Facility Care Coverage, set the Estimated Costs/Month to R3500 and the starting age to 85. 10. Click the button underneath the results section. 11. Identify and record the Indexed Savings to Fund Difference for the options of Self- Insured, 50% Insured and 100% Insured The results should be R7,824, R3,912 and 0 respectively. 12. Identify which option is under the R5,000 savings amount your client can afford. Answer: the 50% insured option R3,912 is under the R5,000 savings amount your client can afford. Thus, he should purchase a long-term care policy to cover 50% of the long-term care expenses.

China

Question One: Jesse Jones wants to purchase long-term care insurance to fund home care expenses and facility care expenses from his age 75 and 85 respectively. However, he is electing to insure 70% as opposed to complete self-insurance or full 100% insurance. Jesse’s detailed information is below: Current Age: 55 Retire By: 55 Mortality: 90 Inflation: 3.0% Rate of Return: 9.0% Marginal Tax Rate: 20% Cost of Home Care/Month: ¥1500 Cost of Facility Care/Month: ¥3500 How much is the present value of the cost to self-insure these expenses? $_____ How much is the present value of insuring 70% of these expenses? $______ How much is the present value of insuring 100% of these expenses? $_____ Answer: Select Long-Term Care Calculator from the calculator drop-down menu on Home page. 1. Enter age 55 into the Current Age field 2. In the Retire By field enter age 55 3. In the Mortality field enter age 90 4. Leave the Inflation assumption at the default of 3% if this is not the default then change it. 5. Change the Return assumption to 9.0% 6. Set the Marginal Tax Rate to 20% 7. Change the Percentage to Insure option to 70% Note: This percentage does not affect the calculations, but will allow you to see the results listed below if he chose to purchase insurance to cover 70% of the costs, and self-insure the remaining 30%. 8. Under Home Care Coverage, set the Estimated Costs/Month to ¥1500 9. Under Facility Care Coverage, set the Estimated Costs/Month to ¥3500 10. Click the button underneath the results section. 11. Identify and record the Present Value of Capital for the options of Self-Insured, 70% Insured and 100% Insured Question Two: Charlie wants to have an Emergency Fund for the event that he has to fund long-term care expenses himself. He does not currently have any money in this Emergency Fund, but plans to save an indexed amount of ¥5,000 annually. Given that Charlie wants to self-insure as much as possible, within his savings limits, what percentage of the expenses would you elect him to insure – 0%, 50% or 100%? Current Age: 40 Retire By: 55 Mortality: 90 Inflation: 3.0% Rate of Return: 9.0% Marginal Tax Rate: 35% Home Care Expenses/Month: ¥1500 Home Care Starting Age: 80 Facility Care Expenses/Month: ¥3500 Facility Care Starting Age: 85 Answer: Select Long-Term Care Calculator from the calculator drop-down menu on Home page. 1. Enter age 40 into the Current Age field 2. In the Retire By field enter age 55 3. In the Mortality field enter age 90 4. Leave the Inflation assumption at the default of 3% if this is not the default change it to 3%. 5. Change the Return assumption to 9% 6. Set the Marginal Tax Rate to 35% 7. Change the Percentage to Insure option to 50% 8. Under Home Care Coverage, set the Estimated Costs/Month to ¥1500 and the starting age to 80. 9. Under Facility Care Coverage, set the Estimated Costs/Month to ¥3500 and the starting age to 85. 10. Click the button underneath the results section. 11. Identify and record the Indexed Savings to Fund Difference for the options of Self- Insured, 50% Insured and 100% Insured The results should be ¥7,824, ¥3,912 and 0 respectively. 12. Identify which option is under the ¥5,000 savings amount your client can afford. Answer: the 50% insured option ¥3,912 is under the ¥5,000 savings amount your client can afford. Thus, he should purchase a long-term care policy to cover 50% of the long-term care expenses.

Malaysia

Question One: Jesse Jones wants to purchase long-term care insurance to fund home care expenses and facility care expenses from his age 75 and 85 respectively. However, he is electing to insure 70% as opposed to complete self-insurance or full 100% insurance. Jesse’s detailed information is below: Current Age: 55 Retire By: 55 Mortality: 90 Inflation: 3.0% Rate of Return: 9.0% Marginal Tax Rate: 20% Cost of Home Care/Month: RM1500 Cost of Facility Care/Month: RM3500 How much is the present value of the cost to self-insure these expenses? $_____ How much is the present value of insuring 70% of these expenses? $______ How much is the present value of insuring 100% of these expenses? $_____ Answer: Select Long-Term Care Calculator from the calculator drop-down menu on Home page. 1. Enter age 55 into the Current Age field 2. In the Retire By field enter age 55 3. In the Mortality field enter age 90 4. Leave the Inflation assumption at the default of 3% if this is not the default then change it. 5. Change the Return assumption to 9.0% 6. Set the Marginal Tax Rate to 20% 7. Change the Percentage to Insure option to 70% Note: This percentage does not affect the calculations, but will allow you to see the results listed below if he chose to purchase insurance to cover 70% of the costs, and self-insure the remaining 30%. 8. Under Home Care Coverage, set the Estimated Costs/Month to RM1500 9. Under Facility Care Coverage, set the Estimated Costs/Month to RM3500 10. Click the button underneath the results section. 11. Identify and record the Present Value of Capital for the options of Self-Insured, 70% Insured and 100% Insured Question Two: Charlie wants to have an Emergency Fund for the event that he has to fund long-term care expenses himself. He does not currently have any money in this Emergency Fund, but plans to save an indexed amount of RM5,000 annually. Given that Charlie wants to self-insure as much as possible, within his savings limits, what percentage of the expenses would you elect him to insure – 0%, 50% or 100%? Current Age: 40 Retire By: 55 Mortality: 90 Inflation: 3.0% Rate of Return: 9.0% Marginal Tax Rate: 35% Home Care Expenses/Month: RM1500 Home Care Starting Age: 80 Facility Care Expenses/Month: RM3500 Facility Care Starting Age: 85 Answer: Select Long-Term Care Calculator from the calculator drop-down menu on Home page. 1. Enter age 40 into the Current Age field 2. In the Retire By field enter age 55 3. In the Mortality field enter age 90 4. Leave the Inflation assumption at the default of 3% if this is not the default change it to 3%. 5. Change the Return assumption to 9% 6. Set the Marginal Tax Rate to 35% 7. Change the Percentage to Insure option to 50% 8. Under Home Care Coverage, set the Estimated Costs/Month to RM1500 and the starting age to 80. 9. Under Facility Care Coverage, set the Estimated Costs/Month to RM3500 and the starting age to 85. 10. Click the button underneath the results section. 11. Identify and record the Indexed Savings to Fund Difference for the options of Self- Insured, 50% Insured and 100% Insured The results should be RM7,824, RM3,912 and 0 respectively. 12. Identify which option is under the RM5,000 savings amount your client can afford. Answer: the 50% insured option RM3,912 is under the RM5,000 savings amount your client can afford. Thus, he should purchase a long-term care policy to cover 50% of the long-term care expenses.

Singapore

Question One: Jesse Jones wants to purchase long-term care insurance to fund home care expenses and facility care expenses from his age 75 and 85 respectively. However, he is electing to insure 70% as opposed to complete self-insurance or full 100% insurance. Jesse’s detailed information is below: Current Age: 55 Retire By: 55 Mortality: 90 Inflation: 3.0% Rate of Return: 9.0% Marginal Tax Rate: 20% Cost of Home Care/Month: $1500 Cost of Facility Care/Month: $3500 How much is the present value of the cost to self-insure these expenses? $_____ How much is the present value of insuring 70% of these expenses? $______ How much is the present value of insuring 100% of these expenses? $_____ Answer: Select Long-Term Care Calculator from the calculator drop-down menu on Home page. 1. Enter age 55 into the Current Age field 2. In the Retire By field enter age 55 3. In the Mortality field enter age 90 4. Leave the Inflation assumption at the default of 3% if this is not the default then change it. 5. Change the Return assumption to 9.0% 6. Set the Marginal Tax Rate to 20% 7. Change the Percentage to Insure option to 70% Note: This percentage does not affect the calculations, but will allow you to see the results listed below if he chose to purchase insurance to cover 70% of the costs, and self-insure the remaining 30%. 8. Under Home Care Coverage, set the Estimated Costs/Month to $1500 9. Under Facility Care Coverage, set the Estimated Costs/Month to $3500 10. Click the button underneath the results section. 11. Identify and record the Present Value of Capital for the options of Self-Insured, 70% Insured and 100% Insured Question Two: Charlie wants to have an Emergency Fund for the event that he has to fund long-term care expenses himself. He does not currently have any money in this Emergency Fund, but plans to save an indexed amount of $5,000 annually. Given that Charlie wants to self-insure as much as possible, within his savings limits, what percentage of the expenses would you elect him to insure – 0%, 50% or 100%? Current Age: 40 Retire By: 55 Mortality: 90 Inflation: 3.0% Rate of Return: 9.0% Marginal Tax Rate: 35% Home Care Expenses/Month: $1500 Home Care Starting Age: 80 Facility Care Expenses/Month: $3500 Facility Care Starting Age: 85 Answer: Select Long-Term Care Calculator from the calculator drop-down menu on Home page. 1. Enter age 40 into the Current Age field 2. In the Retire By field enter age 55 3. In the Mortality field enter age 90 4. Leave the Inflation assumption at the default of 3% if this is not the default change it to 3%. 5. Change the Return assumption to 9% 6. Set the Marginal Tax Rate to 35% 7. Change the Percentage to Insure option to 50% 8. Under Home Care Coverage, set the Estimated Costs/Month to $1500 and the starting age to 80. 9. Under Facility Care Coverage, set the Estimated Costs/Month to $3500 and the starting age to 85. 10. Click the button underneath the results section. 11. Identify and record the Indexed Savings to Fund Difference for the options of Self- Insured, 50% Insured and 100% Insured The results should be $7,824, $3,912 and 0 respectively. 12. Identify which option is under the $5,000 savings amount your client can afford. Answer: the 50% insured option $3,912 is under the $5,000 savings amount your client can afford. Thus, he should purchase a long-term care policy to cover 50% of the long-term care expenses.

Hong Kong

Question One: Jesse Jones wants to purchase long-term care insurance to fund home care expenses and facility care expenses from his age 75 and 85 respectively. However, he is electing to insure 70% as opposed to complete self-insurance or full 100% insurance. Jesse’s detailed information is below: Current Age: 55 Retire By: 55 Mortality: 90 Inflation: 3.0% Rate of Return: 9.0% Marginal Tax Rate: 20% Cost of Home Care/Month: $1500 Cost of Facility Care/Month: $3500 How much is the present value of the cost to self-insure these expenses? $_____ How much is the present value of insuring 70% of these expenses? $______ How much is the present value of insuring 100% of these expenses? $_____ Answer: Select Long-Term Care Calculator from the calculator drop-down menu on Home page. 1. Enter age 55 into the Current Age field 2. In the Retire By field enter age 55 3. In the Mortality field enter age 90 4. Leave the Inflation assumption at the default of 3% if this is not the default then change it. 5. Change the Return assumption to 9.0% 6. Set the Marginal Tax Rate to 20% 7. Change the Percentage to Insure option to 70% Note: This percentage does not affect the calculations, but will allow you to see the results listed below if he chose to purchase insurance to cover 70% of the costs, and self-insure the remaining 30%. 8. Under Home Care Coverage, set the Estimated Costs/Month to $1500 9. Under Facility Care Coverage, set the Estimated Costs/Month to $3500 10. Click the button underneath the results section. 11. Identify and record the Present Value of Capital for the options of Self-Insured, 70% Insured and 100% Insured Question Two: Charlie wants to have an Emergency Fund for the event that he has to fund long-term care expenses himself. He does not currently have any money in this Emergency Fund, but plans to save an indexed amount of $5,000 annually. Given that Charlie wants to self-insure as much as possible, within his savings limits, what percentage of the expenses would you elect him to insure – 0%, 50% or 100%? Current Age: 40 Retire By: 55 Mortality: 90 Inflation: 3.0% Rate of Return: 9.0% Marginal Tax Rate: 35% Home Care Expenses/Month: $1500 Home Care Starting Age: 80 Facility Care Expenses/Month: $3500 Facility Care Starting Age: 85 Answer: Select Long-Term Care Calculator from the calculator drop-down menu on Home page. 1. Enter age 40 into the Current Age field 2. In the Retire By field enter age 55 3. In the Mortality field enter age 90 4. Leave the Inflation assumption at the default of 3% if this is not the default change it to 3%. 5. Change the Return assumption to 9% 6. Set the Marginal Tax Rate to 35% 7. Change the Percentage to Insure option to 50% 8. Under Home Care Coverage, set the Estimated Costs/Month to $1500 and the starting age to 80. 9. Under Facility Care Coverage, set the Estimated Costs/Month to $3500 and the starting age to 85. 10. Click the button underneath the results section. 11. Identify and record the Indexed Savings to Fund Difference for the options of Self- Insured, 50% Insured and 100% Insured The results should be $7,824, $3,912 and 0 respectively. 12. Identify which option is under the $5,000 savings amount your client can afford. Answer: the 50% insured option $3,912 is under the $5,000 savings amount your client can afford. Thus, he should purchase a long-term care policy to cover 50% of the long-term care expenses.

India

Question One: Jesse Jones wants to purchase long-term care insurance to fund home care expenses and facility care expenses from his age 75 and 85 respectively. However, he is electing to insure 70% as opposed to complete self-insurance or full 100% insurance. Jesse’s detailed information is below: Current Age: 55 Retire By: 55 Mortality: 90 Inflation: 3.0% Rate of Return: 9.0% Marginal Tax Rate: 20% Cost of Home Care/Month: Rs1500 Cost of Facility Care/Month: Rs3500 How much is the present value of the cost to self-insure these expenses? $_____ How much is the present value of insuring 70% of these expenses? $______ How much is the present value of insuring 100% of these expenses? $_____ Answer: Select Long-Term Care Calculator from the calculator drop-down menu on Home page. 1. Enter age 55 into the Current Age field 2. In the Retire By field enter age 55 3. In the Mortality field enter age 90 4. Leave the Inflation assumption at the default of 3% if this is not the default then change it. 5. Change the Return assumption to 9.0% 6. Set the Marginal Tax Rate to 20% 7. Change the Percentage to Insure option to 70% Note: This percentage does not affect the calculations, but will allow you to see the results listed below if he chose to purchase insurance to cover 70% of the costs, and self-insure the remaining 30%. 8. Under Home Care Coverage, set the Estimated Costs/Month to Rs1500 9. Under Facility Care Coverage, set the Estimated Costs/Month to Rs3500 10. Click the button underneath the results section. 11. Identify and record the Present Value of Capital for the options of Self-Insured, 70% Insured and 100% Insured Question Two: Charlie wants to have an Emergency Fund for the event that he has to fund long-term care expenses himself. He does not currently have any money in this Emergency Fund, but plans to save an indexed amount of Rs5,000 annually. Given that Charlie wants to self-insure as much as possible, within his savings limits, what percentage of the expenses would you elect him to insure – 0%, 50% or 100%? Current Age: 40 Retire By: 55 Mortality: 90 Inflation: 3.0% Rate of Return: 9.0% Marginal Tax Rate: 35% Home Care Expenses/Month: Rs1500 Home Care Starting Age: 80 Facility Care Expenses/Month: Rs3500 Facility Care Starting Age: 85 Answer: Select Long-Term Care Calculator from the calculator drop-down menu on Home page. 1. Enter age 40 into the Current Age field 2. In the Retire By field enter age 55 3. In the Mortality field enter age 90 4. Leave the Inflation assumption at the default of 3% if this is not the default change it to 3%. 5. Change the Return assumption to 9% 6. Set the Marginal Tax Rate to 35% 7. Change the Percentage to Insure option to 50% 8. Under Home Care Coverage, set the Estimated Costs/Month to Rs1500 and the starting age to 80. 9. Under Facility Care Coverage, set the Estimated Costs/Month to Rs3500 and the starting age to 85. 10. Click the button underneath the results section. 11. Identify and record the Indexed Savings to Fund Difference for the options of Self- Insured, 50% Insured and 100% Insured The results should be Rs7,824, Rs3,912 and 0 respectively. 12. Identify which option is under the Rs5,000 savings amount your client can afford. Answer: the 50% insured option Rs3,912 is under the Rs5,000 savings amount your client can afford. Thus, he should purchase a long-term care policy to cover 50% of the long-term care expenses.

Caribbean

Jamaica   Question One: Jesse Jones wants to purchase long-term care insurance to fund home care expenses and facility care expenses from his age 75 and 85 respectively. However, he is electing to insure 70% as opposed to complete self-insurance or full 100% insurance. Jesse’s detailed information is below: Current Age: 55 Retire By: 55 Mortality: 90 Inflation: 3.0% Rate of Return: 9.0% Marginal Tax Rate: 20% Cost of Home Care/Month: $15000 Cost of Facility Care/Month: $35000 How much is the present value of the cost to self-insure these expenses? $_____ How much is the present value of insuring 70% of these expenses? $______ How much is the present value of insuring 100% of these expenses? $_____ Answer: Select Long-Term Care Calculator from the calculator drop-down menu on Home page. 1. Enter age 55 into the Current Age field 2. In the Retire By field enter age 55 3. In the Mortality field enter age 90 4. Leave the Inflation assumption at the default of 3% if this is not the default then change it. 5. Change the Return assumption to 9.0% 6. Set the Marginal Tax Rate to 20% 7. Change the Percentage to Insure option to 70% Note: This percentage does not affect the calculations, but will allow you to see the results listed below if he chose to purchase insurance to cover 70% of the costs, and self-insure the remaining 30%. 8. Under Home Care Coverage, set the Estimated Costs/Month to $15000 9. Under Facility Care Coverage, set the Estimated Costs/Month to $35000 10. Click the button underneath the results section. 11. Identify and record the Present Value of Capital for the options of Self-Insured, 70% Insured and 100% Insured Question Two: Charlie wants to have an Emergency Fund for the event that he has to fund long-term care expenses himself. He does not currently have any money in this Emergency Fund, but plans to save an indexed amount of $50000 annually. Given that Charlie wants to self-insure as much as possible, within his savings limits, what percentage of the expenses would you elect him to insure – 0%, 50% or 100%? Current Age: 40 Retire By: 55 Mortality: 90 Inflation: 3.0% Rate of Return: 9.0% Marginal Tax Rate: 35% Home Care Expenses/Month: $15000 Home Care Starting Age: 80 Facility Care Expenses/Month: $35000 Facility Care Starting Age: 85 Answer: Select Long-Term Care Calculator from the calculator drop-down menu on Home page. 1. Enter age 40 into the Current Age field 2. In the Retire By field enter age 55 3. In the Mortality field enter age 90 4. Leave the Inflation assumption at the default of 3% if this is not the default change it to 3%. 5. Change the Return assumption to 9% 6. Set the Marginal Tax Rate to 35% 7. Change the Percentage to Insure option to 50% 8. Under Home Care Coverage, set the Estimated Costs/Month to $15000 and the starting age to 80. 9. Under Facility Care Coverage, set the Estimated Costs/Month to $35000 and the starting age to 85. 10. Click the button underneath the results section. 11. Identify and record the Indexed Savings to Fund Difference for the options of Self- Insured, 50% Insured and 100% Insured The results should be $78240, $39120 and 0 respectively. 12. Identify which option is under the $50000 savings amount your client can afford. Answer: the 50% insured option $39120 is under the $50000 savings amount your client can afford. Thus, he should purchase a long-term care policy to cover 50% of the long-term care expenses. Trinidad and Tobago   Question One: Jesse Jones wants to purchase long-term care insurance to fund home care expenses and facility care expenses from his age 75 and 85 respectively. However, he is electing to insure 70% as opposed to complete self-insurance or full 100% insurance. Jesse’s detailed information is below: Current Age: 55 Retire By: 55 Mortality: 90 Inflation: 3.0% Rate of Return: 9.0% Marginal Tax Rate: 20% Cost of Home Care/Month: $1500 Cost of Facility Care/Month: $3500 How much is the present value of the cost to self-insure these expenses? $_____ How much is the present value of insuring 70% of these expenses? $______ How much is the present value of insuring 100% of these expenses? $_____ Answer: Select Long-Term Care Calculator from the calculator drop-down menu on Home page. 1. Enter age 55 into the Current Age field 2. In the Retire By field enter age 55 3. In the Mortality field enter age 90 4. Leave the Inflation assumption at the default of 3% if this is not the default then change it. 5. Change the Return assumption to 9.0% 6. Set the Marginal Tax Rate to 20% 7. Change the Percentage to Insure option to 70% Note: This percentage does not affect the calculations, but will allow you to see the results listed below if he chose to purchase insurance to cover 70% of the costs, and self-insure the remaining 30%. 8. Under Home Care Coverage, set the Estimated Costs/Month to $1500 9. Under Facility Care Coverage, set the Estimated Costs/Month to $3500 10. Click the button underneath the results section. 11. Identify and record the Present Value of Capital for the options of Self-Insured, 70% Insured and 100% Insured Question Two: Charlie wants to have an Emergency Fund for the event that he has to fund long-term care expenses himself. He does not currently have any money in this Emergency Fund, but plans to save an indexed amount of $5,000 annually. Given that Charlie wants to self-insure as much as possible, within his savings limits, what percentage of the expenses would you elect him to insure – 0%, 50% or 100%? Current Age: 40 Retire By: 55 Mortality: 90 Inflation: 3.0% Rate of Return: 9.0% Marginal Tax Rate: 35% Home Care Expenses/Month: $1500 Home Care Starting Age: 80 Facility Care Expenses/Month: $3500 Facility Care Starting Age: 85 Answer: Select Long-Term Care Calculator from the calculator drop-down menu on Home page. 1. Enter age 40 into the Current Age field 2. In the Retire By field enter age 55 3. In the Mortality field enter age 90 4. Leave the Inflation assumption at the default of 3% if this is not the default change it to 3%. 5. Change the Return assumption to 9% 6. Set the Marginal Tax Rate to 35% 7. Change the Percentage to Insure option to 50% 8. Under Home Care Coverage, set the Estimated Costs/Month to $1500 and the starting age to 80. 9. Under Facility Care Coverage, set the Estimated Costs/Month to $3500 and the starting age to 85. 10. Click the button underneath the results section. 11. Identify and record the Indexed Savings to Fund Difference for the options of Self- Insured, 50% Insured and 100% Insured The results should be $7,824, $3,912 and 0 respectively. 12. Identify which option is under the $5,000 savings amount your client can afford. Answer: the 50% insured option $3,912 is under the $5,000 savings amount your client can afford. Thus, he should purchase a long-term care policy to cover 50% of the long-term care expenses. Barbados   Question One: Jesse Jones wants to purchase long-term care insurance to fund home care expenses and facility care expenses from his age 75 and 85 respectively. However, he is electing to insure 70% as opposed to complete self-insurance or full 100% insurance. Jesse’s detailed information is below: Current Age: 55 Retire By: 55 Mortality: 90 Inflation: 3.0% Rate of Return: 9.0% Marginal Tax Rate: 20% Cost of Home Care/Month: $1500 Cost of Facility Care/Month: $3500 How much is the present value of the cost to self-insure these expenses? $_____ How much is the present value of insuring 70% of these expenses? $______ How much is the present value of insuring 100% of these expenses? $_____ Answer: Select Long-Term Care Calculator from the calculator drop-down menu on Home page. 1. Enter age 55 into the Current Age field 2. In the Retire By field enter age 55 3. In the Mortality field enter age 90 4. Leave the Inflation assumption at the default of 3% if this is not the default then change it. 5. Change the Return assumption to 9.0% 6. Set the Marginal Tax Rate to 20% 7. Change the Percentage to Insure option to 70% Note: This percentage does not affect the calculations, but will allow you to see the results listed below if he chose to purchase insurance to cover 70% of the costs, and self-insure the remaining 30%. 8. Under Home Care Coverage, set the Estimated Costs/Month to $1500 9. Under Facility Care Coverage, set the Estimated Costs/Month to $3500 10. Click the button underneath the results section. 11. Identify and record the Present Value of Capital for the options of Self-Insured, 70% Insured and 100% Insured Question Two: Charlie wants to have an Emergency Fund for the event that he has to fund long-term care expenses himself. He does not currently have any money in this Emergency Fund, but plans to save an indexed amount of $5,000 annually. Given that Charlie wants to self-insure as much as possible, within his savings limits, what percentage of the expenses would you elect him to insure – 0%, 50% or 100%? Current Age: 40 Retire By: 55 Mortality: 90 Inflation: 3.0% Rate of Return: 9.0% Marginal Tax Rate: 35% Home Care Expenses/Month: $1500 Home Care Starting Age: 80 Facility Care Expenses/Month: $3500 Facility Care Starting Age: 85 Answer: Select Long-Term Care Calculator from the calculator drop-down menu on Home page. 1. Enter age 40 into the Current Age field 2. In the Retire By field enter age 55 3. In the Mortality field enter age 90 4. Leave the Inflation assumption at the default of 3% if this is not the default change it to 3%. 5. Change the Return assumption to 9% 6. Set the Marginal Tax Rate to 35% 7. Change the Percentage to Insure option to 50% 8. Under Home Care Coverage, set the Estimated Costs/Month to $1500 and the starting age to 80. 9. Under Facility Care Coverage, set the Estimated Costs/Month to $3500 and the starting age to 85. 10. Click the button underneath the results section. 11. Identify and record the Indexed Savings to Fund Difference for the options of Self- Insured, 50% Insured and 100% Insured The results should be $7,824, $3,912 and 0 respectively. 12. Identify which option is under the $5,000 savings amount your client can afford. Answer: the 50% insured option $3,912 is under the $5,000 savings amount your client can afford. Thus, he should purchase a long-term care policy to cover 50% of the long-term care expenses. Bermuda   Question One: Jesse Jones wants to purchase long-term care insurance to fund home care expenses and facility care expenses from his age 75 and 85 respectively. However, he is electing to insure 70% as opposed to complete self-insurance or full 100% insurance. Jesse’s detailed information is below: Current Age: 55 Retire By: 55 Mortality: 90 Inflation: 3.0% Rate of Return: 9.0% Marginal Tax Rate: 20% Cost of Home Care/Month: $1500 Cost of Facility Care/Month: $3500 How much is the present value of the cost to self-insure these expenses? $_____ How much is the present value of insuring 70% of these expenses? $______ How much is the present value of insuring 100% of these expenses? $_____ Answer: Select Long-Term Care Calculator from the calculator drop-down menu on Home page. 1. Enter age 55 into the Current Age field 2. In the Retire By field enter age 55 3. In the Mortality field enter age 90 4. Leave the Inflation assumption at the default of 3% if this is not the default then change it. 5. Change the Return assumption to 9.0% 6. Set the Marginal Tax Rate to 20% 7. Change the Percentage to Insure option to 70% Note: This percentage does not affect the calculations, but will allow you to see the results listed below if he chose to purchase insurance to cover 70% of the costs, and self-insure the remaining 30%. 8. Under Home Care Coverage, set the Estimated Costs/Month to $1500 9. Under Facility Care Coverage, set the Estimated Costs/Month to $3500 10. Click the button underneath the results section. 11. Identify and record the Present Value of Capital for the options of Self-Insured, 70% Insured and 100% Insured Question Two: Charlie wants to have an Emergency Fund for the event that he has to fund long-term care expenses himself. He does not currently have any money in this Emergency Fund, but plans to save an indexed amount of $5,000 annually. Given that Charlie wants to self-insure as much as possible, within his savings limits, what percentage of the expenses would you elect him to insure – 0%, 50% or 100%? Current Age: 40 Retire By: 55 Mortality: 90 Inflation: 3.0% Rate of Return: 9.0% Marginal Tax Rate: 35% Home Care Expenses/Month: $1500 Home Care Starting Age: 80 Facility Care Expenses/Month: $3500 Facility Care Starting Age: 85 Answer: Select Long-Term Care Calculator from the calculator drop-down menu on Home page. 1. Enter age 40 into the Current Age field 2. In the Retire By field enter age 55 3. In the Mortality field enter age 90 4. Leave the Inflation assumption at the default of 3% if this is not the default change it to 3%. 5. Change the Return assumption to 9% 6. Set the Marginal Tax Rate to 35% 7. Change the Percentage to Insure option to 50% 8. Under Home Care Coverage, set the Estimated Costs/Month to $1500 and the starting age to 80. 9. Under Facility Care Coverage, set the Estimated Costs/Month to $3500 and the starting age to 85. 10. Click the button underneath the results section. 11. Identify and record the Indexed Savings to Fund Difference for the options of Self- Insured, 50% Insured and 100% Insured The results should be $7,824, $3,912 and 0 respectively. 12. Identify which option is under the $5,000 savings amount your client can afford. Answer: the 50% insured option $3,912 is under the $5,000 savings amount your client can afford. Thus, he should purchase a long-term care policy to cover 50% of the long-term care expenses. Bahamas   Question One: Jesse Jones wants to purchase long-term care insurance to fund home care expenses and facility care expenses from his age 75 and 85 respectively. However, he is electing to insure 70% as opposed to complete self-insurance or full 100% insurance. Jesse’s detailed information is below: Current Age: 55 Retire By: 55 Mortality: 90 Inflation: 3.0% Rate of Return: 9.0% Marginal Tax Rate: 20% Cost of Home Care/Month: $1500 Cost of Facility Care/Month: $3500 How much is the present value of the cost to self-insure these expenses? $_____ How much is the present value of insuring 70% of these expenses? $______ How much is the present value of insuring 100% of these expenses? $_____ Answer: Select Long-Term Care Calculator from the calculator drop-down menu on Home page. 1. Enter age 55 into the Current Age field 2. In the Retire By field enter age 55 3. In the Mortality field enter age 90 4. Leave the Inflation assumption at the default of 3% if this is not the default then change it. 5. Change the Return assumption to 9.0% 6. Set the Marginal Tax Rate to 20% 7. Change the Percentage to Insure option to 70% Note: This percentage does not affect the calculations, but will allow you to see the results listed below if he chose to purchase insurance to cover 70% of the costs, and self-insure the remaining 30%. 8. Under Home Care Coverage, set the Estimated Costs/Month to $1500 9. Under Facility Care Coverage, set the Estimated Costs/Month to $3500 10. Click the button underneath the results section. 11. Identify and record the Present Value of Capital for the options of Self-Insured, 70% Insured and 100% Insured Question Two: Charlie wants to have an Emergency Fund for the event that he has to fund long-term care expenses himself. He does not currently have any money in this Emergency Fund, but plans to save an indexed amount of $5,000 annually. Given that Charlie wants to self-insure as much as possible, within his savings limits, what percentage of the expenses would you elect him to insure – 0%, 50% or 100%? Current Age: 40 Retire By: 55 Mortality: 90 Inflation: 3.0% Rate of Return: 9.0% Marginal Tax Rate: 35% Home Care Expenses/Month: $1500 Home Care Starting Age: 80 Facility Care Expenses/Month: $3500 Facility Care Starting Age: 85 Answer: Select Long-Term Care Calculator from the calculator drop-down menu on Home page. 1. Enter age 40 into the Current Age field 2. In the Retire By field enter age 55 3. In the Mortality field enter age 90 4. Leave the Inflation assumption at the default of 3% if this is not the default change it to 3%. 5. Change the Return assumption to 9% 6. Set the Marginal Tax Rate to 35% 7. Change the Percentage to Insure option to 50% 8. Under Home Care Coverage, set the Estimated Costs/Month to $1500 and the starting age to 80. 9. Under Facility Care Coverage, set the Estimated Costs/Month to $3500 and the starting age to 85. 10. Click the button underneath the results section. 11. Identify and record the Indexed Savings to Fund Difference for the options of Self- Insured, 50% Insured and 100% Insured The results should be $7,824, $3,912 and 0 respectively. 12. Identify which option is under the $5,000 savings amount your client can afford. Answer: the 50% insured option $3,912 is under the $5,000 savings amount your client can afford. Thus, he should purchase a long-term care policy to cover 50% of the long-term care expenses. Puerto Rico   Question One: Jesse Jones wants to purchase long-term care insurance to fund home care expenses and facility care expenses from his age 75 and 85 respectively. However, he is electing to insure 70% as opposed to complete self-insurance or full 100% insurance. Jesse’s detailed information is below: Current Age: 55 Retire By: 55 Mortality: 90 Inflation: 3.0% Rate of Return: 9.0% Marginal Tax Rate: 20% Cost of Home Care/Month: $1500 Cost of Facility Care/Month: $3500 How much is the present value of the cost to self-insure these expenses? $_____ How much is the present value of insuring 70% of these expenses? $______ How much is the present value of insuring 100% of these expenses? $_____ Answer: Select Long-Term Care Calculator from the calculator drop-down menu on Home page. 1. Enter age 55 into the Current Age field 2. In the Retire By field enter age 55 3. In the Mortality field enter age 90 4. Leave the Inflation assumption at the default of 3% if this is not the default then change it. 5. Change the Return assumption to 9.0% 6. Set the Marginal Tax Rate to 20% 7. Change the Percentage to Insure option to 70% Note: This percentage does not affect the calculations, but will allow you to see the results listed below if he chose to purchase insurance to cover 70% of the costs, and self-insure the remaining 30%. 8. Under Home Care Coverage, set the Estimated Costs/Month to $1500 9. Under Facility Care Coverage, set the Estimated Costs/Month to $3500 10. Click the button underneath the results section. 11. Identify and record the Present Value of Capital for the options of Self-Insured, 70% Insured and 100% Insured Question Two: Charlie wants to have an Emergency Fund for the event that he has to fund long-term care expenses himself. He does not currently have any money in this Emergency Fund, but plans to save an indexed amount of $5,000 annually. Given that Charlie wants to self-insure as much as possible, within his savings limits, what percentage of the expenses would you elect him to insure – 0%, 50% or 100%? Current Age: 40 Retire By: 55 Mortality: 90 Inflation: 3.0% Rate of Return: 9.0% Marginal Tax Rate: 35% Home Care Expenses/Month: $1500 Home Care Starting Age: 80 Facility Care Expenses/Month: $3500 Facility Care Starting Age: 85 Answer: Select Long-Term Care Calculator from the calculator drop-down menu on Home page. 1. Enter age 40 into the Current Age field 2. In the Retire By field enter age 55 3. In the Mortality field enter age 90 4. Leave the Inflation assumption at the default of 3% if this is not the default change it to 3%. 5. Change the Return assumption to 9% 6. Set the Marginal Tax Rate to 35% 7. Change the Percentage to Insure option to 50% 8. Under Home Care Coverage, set the Estimated Costs/Month to $1500 and the starting age to 80. 9. Under Facility Care Coverage, set the Estimated Costs/Month to $3500 and the starting age to 85. 10. Click the button underneath the results section. 11. Identify and record the Indexed Savings to Fund Difference for the options of Self- Insured, 50% Insured and 100% Insured The results should be $7,824, $3,912 and 0 respectively. 12. Identify which option is under the $5,000 savings amount your client can afford. Answer: the 50% insured option $3,912 is under the $5,000 savings amount your client can afford. Thus, he should purchase a long-term care policy to cover 50% of the long-term care expenses.