Money manager made the following comments to Financial Planning Team.
What our analysis seems to indicate is that there is far greater downside risk for not much lost in upside potential. With the re-position for MoneyGuard protection, your values at age 100 for the older spouse show $8,700,000 Net Worth with or without our hypothetical LTC event. While NOT putting in place protection shows only about 6% more in upside potential to an expected $9,200,000 Net Worth at age 100. The RISK however, is a 32% potential loss to $6,300,000 if our hypothetical LTC event happened. So again, the question is; do you give up a potential gain of about $600,000 to eliminate a potential loss of about $3,000,000?
Here is another way of looking at this. You are betting $3,600,000 (today’s portfolio value) and are expecting a $8,700,000 pay off if we re-position the $140,000 today. Or do we bet $3,600,000 and might get $9,200,000 if we win (no ltc event) or $6,300,000 if we lose (having hypothetical ltc event). By the way… it is about a 70% chance that you lose and 30% chance that you win.
What will most clients be more appreciative of? If you help them prevent taking a big hit or squeezing out a little more yield?
I sincerely understand though that this couple should be just fine no matter the decision.
Sorry to carry on…
If you do not have the time to commit for doing insurance work, then assign insurance work to an associate or allow Westland to assist. What would you pay an associate? 50%? Westland will be your associate for 25% or less depending on your role. Best of all you are keeping it all in your control and not allowing any competition to creep into your practice. We just become part of your practice just like an associate.