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 Needs Analysis: A top financial adviser called to discuss a case where the couple did not have any life insurance and wasn’t sure even if life insurance was necessary. After some discussion we had him run a couple of what if strategies using his financial planning software.
What if husband died today – Calculate expected net worth of his surviving wife at her age 100
What if wife died today – Calculate expected net worth of her surviving husband at his age 100.
Even though their plan looked solid with both living a long life, as individuals not so much.
We found that with his passing the hypothetical took her to her mid 90’s – we could accept this risk with their real estate equity as a backstop.
We found that with her passing, the hypothetical only took him to about age 81 and then the plan failed. This was due to her Social Security and single life pension that would cease.
We then ran, various scenarios to place an affordable term life insurance amount on her that might make sense. We found that if we put a 20 year $500,000 term on her and she passes anytime in the 20 year period, his plan succeeds. If she passed after the 20 year term with no insurance proceeds for him, then his plan still succeeds through his mid 90’s. This was an acceptable risk with their real estate equity as a back stop.
Luckily this couple already had a LTC protection program in place, otherwise a significant LTC event for either of them would have been devastating.
Your Westland Team