During the last few weeks 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?
Case 1 – Life Insurance Can make a World of Difference!
Advisor had a client age 62 still planning and needing to work another 8 years or so prior to retirement and had a $800,000 term policy that was at the end of its term. What to do to protect the family (non-working spouse)? Client had a nice home with a mortgage and good equity and a rental property also with a mortgage and good equity. He earned a good living with discretionary income available and about a $500,000 portfolio almost all in qualified funds.
After careful consideration of the mortgage balances, current good health and lifestyle we came up with two choices for consideration. A 15 year term of $700,000 or 20 year term of $500,000. The cost of which were about the same price and was still affordable to the couple.
Clients were presented with both options and after a discussion about longevity in both their families, it was recommended they take the $500,000 which would be enough to pay off the rental mortgage and still have $300,000 to provide for additional supplemental income should he happen to pass anytime soon. If he passes after retirement, Social Security, Rental income, lifetime income from an indexed annuity would all contribute to the income needs and lessen the stress of having to draw too much from the portfolio. Luckily, this couple already had long term care insurance risk covered with a traditional LTC policy purchased several years earlier.
Having the LTC already in place was a key factor to minimize the risks to their retirement planning and not having to recommend immediate changes to budget (lifestyle) today or potentially for the surviving spouse.
Case 2 – Client was the unexpected beneficiary of a large estate from a non-spouse, some of which (over $1,000,000) were in non-qualified annuities with low cost basis. We researched options and working with the Advisor, settled on a non-qualified stretch solution using a fixed indexed annuity. Researching carriers that accept this business we recommended Lincoln’s Optiblend Fixed Indexed Annuity.