One of the biggest frustrations that I experience is when I hear that producers follow the path of least resistance and accept a “cookie cutter” plan with streamlined underwriting when a better solution exists for their client (and themselves). Here is the scenario – it happens all the time.
Al the advisor meets with his clients Sam and Diane who are both 65 and in good health. After a discussion regarding their concerns surrounding how an extended healthcare event could impact their retirement plan, the conclusion is utilize an asset based LTC solution. Al recommends that Sam & Diane reposition $200,000 into a solution that calls for each to purchase an individual policy that provides roughly $6,000 per month of LTC benefit for up to 6 years with a death benefit of around $145,000.
It makes sense – $6,000 per month for up to 6 years if they need LTC and if it is not used, the death benefit will be paid.
Total Premium: $200,000
| Sam | Diane | |
| Death Benefit | 143,699 | 148,500 |
| Monthly LTC | 5,987 | 6,173 |
| LTC Duration | 72 mos. | 72 mos. |
THERE IS A BETTER SOLUTION!!!!!!
Consider this: That same $200,000 is used to purchase an Asset Care I policy that provides a lifetime monthly LTC benefit of $7,406 for Sam and Diane. That is $7,406 each! Should the policy not be used for LTC benefits, a tax free death benefit of $246,891 will be paid.
Total Premium: $200,000
| Sam & Diane | |
| Death Benefit | 246,891 |
| Monthly LTC | 7,406 |
| LTC Duration | Lifetime |
If you were the consumer, would you want a policy offering a monthly benefit for 6 years of $6,000 or a monthly benefit of $7,400 that they cannot outlive?
With the fiduciary rule rolling off everyone’s tongues, we need to become more diligent with all of our recommendations. At a minimum, share both solutions and let the consumer decide.
Click here to run an illustration for yourself.
For more information about Care Solutions, contact Kevin fisher at (678) 512-9627 or at kevin.fisher@oneamerica.com.