During the last week we have worked on dozens of life, long term care, disability and annuity cases working alongside our Advisers.
If you are not discussing these issues with your clients, then who will?
Westland is here to help you protect your clients, their, families, their businesses and their portfolio.
Case 1 – Guaranteed Income
A Client received some guidance from a respected source to them – a Knights of Columbus Insurance Agent. He had been their insurance agent for years. These clients were doing fine financially at ages 61 (him) and 60 (her) with almost $2,500,000 in net worth, $1,100,000 liquid and $1,400,000 in real estate equity. He was still working part time and their shortfall monthly was only about $1,500. Their financial planner was concerned because they seemed to be drawing much more than the $1,500 monthly from their Schwab account. Extra cash needed for home repairs, gifts, college tuition, etc. There just wasn’t any discipline and their plan was not showing success to age 100. They mentioned to their insurance agent friend their concern and a plan was proposed to add an annuity to guarantee income that would make up for the shortfall. They liked the new plan and then the rest of their portfolio could grow and be used for these extra unplanned activities that supported their lifestyle.
Down the road, if they needed additional funds they would tap into their rental property equity that was now standing at over $900,000. This was also their fall back position for a LTC event for one or both of them. He was uninsurable and very likely not reach age 100.
The Advisor didn’t like the plan at all and said some things that were very concerning. Stating annuities had high fees, expenses and commissions. And that he could better manage the portfolio to give them the systematic income desired and still achieve some growth, better than the annuity could.
Not all annuities have high expenses and I hope he is right about assuming the risks of the market, longevity risk and sequence of returns risk with his portfolio management abilities.
He didn’t want to take the time to do the analysis of the new plan using and indexed annuity, but only saw this as a threat to share responsibility with another outside trusted advisor. I’ll give you more details next week as we dig into the case a bit more and we’ll either support diversification to an indexed annuity or not. Stay tuned.
Case 2 – Life Replacement
Client Male age 57 had a $500,000 death benefit whole life policy that had an annual premium of $5,000. Cash Value was about $137,000. We replaced the policy with a John Hancock Protection UL including LTC and no additional premiums. The guarantee would take the client to age 90 and at current rate and costs to age 125. If needed, would provide up to $20,000 monthly for LTC costs.
Call for assistance with any LTC, Annuity, DI or Life case today.