Thought for the day:

Behind every great man is a woman rolling her eyes.   –Jim Carrey

 

If you will read no further:

On a typical day in 2009, 42million family caregivers nationwide were providing care for an adult with LTSS needs, with women being the vast majority of unpaid caregivers. When you do not insist upon a sound plan to pay for long-term care, you may be essentially advising your clients to possibly go to work as a caregiver in order to earn again what has been accumulated in the estate to support him/herself once their loved one is deceased.

Thought for the week:

Believe it or not, there are other things happening on Capitol Hill besides the budget, debt ceiling and Obama Care.

Most PEARLS readers will not be reading the Commission on Long-Term Care Report to Congress, submitted on Sept.18, 2013; yet it delves into one to the most significant issues affecting our clients and by association, should be of concern to all advisors. So from time to time over the next several weeks I shall endeavor to impart some of the more important (as I see them) pearls from this 114 page report. Hopefully you will find the information interesting and useful. If not, there is still the “Delete” button.

• The new government acronym is LTSS, Long-Term Services and Supports and encompasses everything from (paid and unpaid) human assistance with activities of daily living (ADLs) to the systems, institutions, facilities and technologies involved.

• About half of the physical functional impairments associated with LTSS needs of older adults have onset after age 65 and are caused primarily by arthritis, heart condition and diabetes. An additional 22% of older adults suffer from Dementia (60-80% Alzheimer’s disease) and stroke. One in 8 Americans over age 65 has Alzheimer’s and the disease affects 42.5% of Americans over 85. That includes families responsible for provide the care or paying the bills. All numbers are expected to increase as the boomers (our clientele) reach 65 and above.

• Currently, the majority of care is provided by family members due to the cost of professional care and lack of sufficient financial resources to pay for it. But too often they do not have training in the medical/nursing tasks they need to perform this function, making the entire process an even greater burden.

• Currently there is no comprehensive community-based approach to care coordination for individuals and caregivers. Absent the commercial insurance system, services and support may not be provided in the most appropriate setting by the most appropriate provider, the individual’s needs and preferences may not be met and their caregivers may experience substantial stress trying to arrange for or provide care…..putting individuals at risk for injuries and or adverse health consequences requiring additional medical attention.

If you have been following these pages for some time, you are probably aware of most of this information. But it is good to be reminded of the specifics, especially when confirmed by an in-depth study such as this; all the more reason to seriously counsel your clients on long-term care planning. The assistance that is provided by an LTCi carrier at the time of need is an invaluable service to both you and your client. And no benefit such as the extra income available from a quality insurance solution is more valuable and appreciated at a most difficult time.

Thought for the day:

Wisdom is the reward you get for a lifetime of listening when you’d have preferred to talk.

 Doug Larson

 

 

If you will read no further:

When allocating money in the portfolio for future health emergencies or for loss of retirement income due to the death of a spouse, the best, most predictable rate of return will probably be realized by using a life insurance policy for that purpose.

 

 

Thought for the week:

I was recently visiting with a prospective client who attended one of my workshops on long-term care.  I was showing him how to use life insurance to provide extra monthly income to pay for any care he might need while providing extra security for his wife to replace lost social security income if he was fortunate enough to dodge that bullet.

Because he is still interested in building his estate for the future (he is 55 and his wife is 10 years younger) he is always on the lookout for impressive investment strategies.  He understands investing in a managed portfolio of stocks, bonds and alternative investments; and he has an investment advisor taking care of that.  But he was intrigued by my approach of using life insurance to pay LTCi bills and was interested in what else it might do that he wasn’t aware of.  So I showed him a universal life policy that would provide $500,000 to his wife when he dies; or if he ever needed convalescent care, he could tap it for $10,000 per month of tax free income to pay for an in-home caregiver for over 4 years.

He thought that the $6000 per year premium investment was certainly doable, but wanted to know how the return (IRR) compared to the 7.7% that his planner had been averaging over the years.  I showed him how the rate of return on his “investment” would depend on when he (or his wife) ended up receiving the money.  For example, if he was unfortunate at age 75 and collected a benefit (long-term care for himself or the death benefit to his wife,) the tax-free rate of return would be 12.04%.  At 85 it would be 5.82%.  His comment to me was, “ya know?…after taxes and fees about what I’m getting now”.  I suggested that if he wanted to max out the IRR all he had to do was die soon!  He smiled, but I don’t think he thought it was very funny.  He actually had another thought in mind.  His 80+ year old mother would probably need long-term care someday and he is planning on taking care of it; but if something happened to him before then, it would be nice to have this money for mom’s care.

While we were filling out an application for the insurance policy, he commented that he wondered why his financial advisor had never suggested anything like this.  I told him I couldn’t answer that, but I had recently read an article in an investment news publication that a survey by The Futures Company, an industry research and consulting organization, found that a majority of middle aged folks admitted they were underinsured and that most were very open to discussing how to fix it. 

It has been my experience that when they know what these modern products can do, they are much more interested in putting one in their portfolio.  Why not make an early New Year’s Resolution to consider what role life insurance can play to address the various issues that concern each of your clients and call Randy or Nancy here at Westland (800)238-8144 to assist you with a strategy for them.

 

Thought for the day:

“Leadership is a potent combination of strategy and character.  But if you must be without one, be without strategy.”                              Norman Schwarzkopf

If you will read no further:

There is a reason why our annuity sales are growing each month.  More and more advisors are discovering that their clients want to minimize the uncertainty they face day to day in retirement. The only way to maximize retirement income is to be able to spend all of their assets by the day they die.  Since no individual advisor can guarantee to accomplish that, we must rely on the insurance companies (the only institution that knows statically when death will occur) to get the job done.  It’s called a pension (also known as an annuity).  I guarantee if given a choice between certain results and uncertainty more and more of our clients will be opting out of the latter.

Thought for the week:

Last week we reflected on the increase we are seeing in life insurance, particularly Index Life Insurance set up to provide an amazing alternative to a Roth IRA; max funding a life insurance policy where the cash value crediting rate is equal to the annual increase in the S&P (up to 13%) each year so that a young family can have significant life insurance protection and our client can look forward to significant tax free retirement income.

But now what to do with clients who have a modest portfolio and must retire with sufficient income to cover their basic living costs now and in the future.  This is also the client probably least interested in much risk and volatility as they have little downside margin to play with.  If your practice is primarily funded by gathering assets, you might have a slight dilemma here as you want to take charge of his portfolio, but it’s difficult (impossible?) to guarantee the results. You need the most income at the lowest risk.  Enter the Annuity Ladder.  Read more

Assume we have a couple ages 65 that have accumulated $600k in their retirement portfolio.

Step one is to determine the monthly shortfall between their social Security income, Pension income (if any), and basic living expenses; housing, insurance, utilities, transportation and food….and taxes. I don’t think I am going out on a limb to assume most people prefer a monthly income that will cover that amount free of risk or uncertainty.  Suppose that shortfall is $1,500 per month.  The chart at the left says that they can receive about 7% per year income, guaranteed for life. So $250k to $300k of their assets should be used to purchase a joint annuity.  That leaves $300k that can be invested in a managed portfolio designed to grow in a manner commensurate with their risk tolerance.

At age 75, the portfolio (which certainly you can grow at 6% net) will now be worth $537k. If needed/desired, another $150k can be used to purchase a new annuity to provide another $14,000 per year of income.  The remaining $380,000 can continue to grow so that by age 85($680k) they can use $180k to purchase yet another annuity that will add $20,000 more per year.  Total annuity income by then will be $52k per year, up from an original amount of $18k at age 65.

Over their retirement years their portfolio has generated $665,000 of secure, no stress income and left a legacy of $638,000.   All income is 100% risk free*

Of course all these numbers except the annuity rates are hypothetical, and each situation would be done a little differently.  The idea is to use part of the retirement portfolio to get as much secure income as possible.  Then you can invest the rest of the money for future needs and inflation.  Investing some of the money in a linked-benefit policy for long-term care would be perfect for these folks and on policy could cover both of them.

By the way, if you think getting 6% net for the client is a little too ambitious, I wouldn’t argue with you.  That is all the more reason why they need a layered Annuity Strategy.

PS.  If you read all the way down to here, that is great.  I trust you enjoyed it.  Pleasee sure to subscribe to our blog if you haven’t already. You will be notified whenever something is posted.  You will also be able to respond and comment on the things I post.  That way I can learn something with this as well.

Thought for the day:

“You know you’re old if they have discontinued your blood type”

Phyllis Diller

 

If you will read no further:

One in 9 – The number of Americans age 65 living with Alzheimer’s Disease.*

One in 3 – The number of victims age 85 and over.*

Five million – The total number of Americans currently living with Alzheimer’s disease. *

Sixteen million – The projected number of victims in 2050.*

                                    *According to the Alzheimer’s Association

Add to that Heart disease, Cancer, Respiratory Diseases and strokes (the top four causes of death) how can you not encourage your clients to adopt a long-term care strategy while they are still young enough and healthy enough to choose from all their options?

 

Thought for the week:

RETIREMENT STRATEGIES INVOLVING INSURANCE EVERY PLANNER SHOULD UNDERSTAND. 

Not all clients will have enough money in retirement to provide their desired income and protect themselves against the exorbitant cost of long-term care. For the client who still has time before he/she retires, one should make a concerted effort to offer the new life insurance products that pay for long-term care. Many clients carry insurance policies (or at least they should) to provide financial protection for their family should they die prematurely. Some use term insurance designed to expire when they reach their middle 60’s or even before….inexpensive but limited.

The most popular life insurance policies today include accelerated benefit riders that pay the death benefit early for long-term care. Having a life insurance policy in force today for, say, $500k that could pay $10,000 per month for long-term care is much more useful than one that only pays at death. Whether it’s term insurance or Universal Life, your clients should be converting their coverage to one of these products. This is not the same as MoneyGuard or the other products we offer as a specific strategy for LTCi. Instead they offer the opportunity to grow the equity in the policy over the younger years so that at retirement, long-term care is addressed with a policy that is paid up, or at least requires little to maintain it in force.

We suggest that your clients pay a little more and purchase a UL policy that will build cash value so they will be able to utilize it in retirement for long-term care protection and not have to deal with that issue at a much higher cost. Almost every company offers these new riders, but only a few provide their benefits under Section 7702B of the code and pay true long-term care benefits vs. Sec.101(g) plans which are more limited in their ability to address long-term care. Of course we offer both to give the greatest flexibility when addressing the particular needs of your client.

In order to better understand what I am talking about, pick a couple of clients in their 40’s or 50’s who own (or should own) existing insurance policies and call Nancy Woo or Randy Masciarelli (both are at 800-238-8144), tell them the age, sex, health status, the amount of insurance they currently own and how much they are paying for it. We will show you how little it will cost to upgrade their coverage and take a major LTCi issue off the table for them in retirement. You will be amazed at what a great service you will be doing for your client.

NEXT WEEK, ANOTHER STRATEGY DESIGNED TO MAKE SURE THEIR PORTFOLIO PROVIDES AS MUCH SECURE RETIREMENT INCOME AS POSSIBLE

Quote of the week:

“Why wouldn’t everyone do this?”

A question from a new client who heard my presentation about linked-benefit life.

 

If you will read no further:

Read this short article in the Wall Street Journal (9/13/13) then consider what your self-insuring client must do if suddenly he has a serious stroke and requires eighteen hour per day care in his home like a friend of mine did for 3 ½ years before he died. Trust me, his wife won’t last 3 months doing that. How would $10,000 to $12,000 per month in expenses impact the portfolio you are managing? Now project it out at 5% (historical increase) per year for the next ten years and you are facing $16,000 per month. Now add the fact that you are competing with thousands of other patients for these services. You think the price isn’t going even higher?

Under those circumstances wouldn’t you feel better knowing that you (successfully) advised your clients to create an additional $5,000 or $6,000 per month to add some needed flexibility to their financial resources at the time of need.

 

Thought for the week:

You probably are tired of me talking about long-term care. I get it. You give investment advice.  You are not an insurance agent. But you need to hear me out (or at least read to the end of this piece) because, like most advisors, you are under the misimpression that many (even most) of your clients can self-insure. They have plenty of money, and they probably won’t need to pay for care anyway, because they are “in good health”.

But if you read this article and think about it, you will soon discover that you and your clients are leaving out a very important factor in your thinking about their future. LTCi options are going to become scarcer as the millions of boomers consume available resources.  This means that the cost of the kind of care your clients would come to expect will rise to levels that are not even conceivable right now.  Most planners advise their clients to self-insure but without a strategy like linked-benefit insurance it may become almost impossible to “self-insure” the level of care at an acceptable cost. 

Consider what your self-insuring client must do if suddenly he has a serious stroke and requires eighteen-hour-per-day care in his home like a friend of mine did for 3½ years before he died. Trust me, his wife won’t last 3 months doing that. What would $10,000 to $12,000 per month in expenses affect the portfolio you are managing? Now project it out at increases in cost at 5% (historical increase) per year for the next ten years and you are to $16,000 per month. Now add the fact that you are competing with thousands of other patients for these services. You think the price isn’t going even higher?

I’m not suggesting you purchase an insurance policy to cover all the expenses to provide a free long-term care experience. I’m just suggesting that if I were their advisor, I would sure want to have advised them (successfully) to create an additional $5,000 or $6,000 per month to add some needed flexibility to his financial resources at the time of need.

Having an asset in their portfolio that can add $thousands to their monthly income will be a godsend to even the wealthier clients.  Accomplishing this without spending money for insurance premiums just may be viewed in retrospect as a “genius strategy”. Certainly it should be an “automatic” for clients who can afford to allocate 10% of their assets not needed to support their lifestyle to a strategy that will create this additional income.

We continue to present the linked-benefit concept to clients in seminars with amazing acceptance. If you think your clients don’t want this, it’s probably because you have not presented it so they understand the issues and how easily they can be addressed. Call us. We can help.

Thought for the day:

The difference between a meeting and a funeral is that you know why you are at a funeral. Unknown

 

If you will read no further:

When the next “crash” occurs, most of our clients will see their accounts drop by $10,000 or $20,000 or more.  Probably temporary, but a drop non-the-less.  Take $20,000 now and purchase a long-term care “stop-loss” instead of a long-term care policy… one time, paid up, even tax deductible. In some cases it is totally paid for with tax free income.  Now you have protected several hundred thousand dollars of their estate from a very high risk, high cost event.  Read on for specifics or call me or your marketing director for details.

 

Thought for the week:

Do you sometimes wonder just what it takes to get people to adopt you as their advisor; or once committed, to actually agree to move on your advice?  A recent “Fear of Financial Planning Study” conducted by Nationwide Financial showed that 83% of adults over 18 are afraid of another financial crisis and 62% are scared of investing in the stock market.  Only 58% fear death and 57% fear public speaking.

As financial planners we sometimes lose sight of the fact that part time observers of the markets (our clients and prospects) will never have the deep understanding of how it all works that you do.  When you mix that lack of understanding with the fear of losing their money, then add a little of that greed that we all have, it makes it very difficult to make decisions that are ultimately in their best interest.

I had a prospect recently that was interested in (and could afford) a linked-benefit annuity with a long-term care rider for her 68 year old husband.  He has type 2 diabetes and a metal plate in his head from an accident 6 years ago and she believes that he is a strong candidate for eventually needing long-term care. I was able to confirm for her that no conventional long-term care insurance would be available.

She approached me about linked-benefit (which was more appealing to her anyway) and after being told by the underwriters that they would be interested in considering such a risk, I showed her how she could move $100k into an annuity that would grow at current rates of 1.5% if she ever wanted to cash out and 2% if they needed the money for long-term care.  Attached to that would be a pretty inexpensive rider that would pay substantial (one might even say “impressive”) benefits.  I explained to her that the $100k would be in a safe A+ rated company and although there is a 6.5% surrender charge the first year, by the end of the 4^th year her money would be over 100% refundable. Since the money had to reside somewhere when it came time to pay for her husband’s long-term care, putting it here would possibly give her access to insurance coverage not available anywhere else. By choosing the annuity to store some savings, she could purchase the LTCi rider (available from no other source) for a one-time payment of $23,000 that would pay for as much as $150K to $300K of tax free income.  Pretty good, huh?   But all that didn’t motivate her to move forward. 

This is what did it.  I pointed out that, after depositing the money in the annuity and acquiring the extension insurance, whenever she wanted, she could withdraw all but $1000 from the annuity and the “stop-loss” extension would remain in force for life.  No commitment to the annuity.  Now she can go for better returns on the principal and still have a “stop-loss” long term care policy in place with no further premiums and each year protecting hundreds of thousands of dollars of assets from being destroyed by long-term care costs.  Now that she has alternatives with which she is comfortable, she is ready to put the strategy in place.

All the financial planners your prospect/client meets can invest, allocate, diversify and grow their money.  You can provide solutions and strategies to solve their problems. Now that’s what I call financial planning.   

Products like this vary somewhat from state to state, so pick out a client that you think should consider this concept and let’s work on it together to see just how impressive a case we can make.

PS. Don’t forget to ask me how we can pay for the “stop-loss” extension rider with tax free income.

Thought for the day:

Living without assets is so much more painful than dying rich that people who have no annuity income will either draw down less than they could otherwise afford, or accept a risk that they can’t afford at all.

 

If you will read no further:

Westland has all of the top term insurance carriers with their rates and forms available on our website and Genworth just announced an average 12% decrease in their term rates. They will be available on our website here next Sunday.  You can choose either to get the quotes and forms yourself, 24/7 or proposals, advice and forms from Randy randym@westlandinc.com or Nancy nancyw@westlandinc.com .  You can call them at (800) 238-8144 and tell Peggy I told you to call. You will find that doing term insurance thru Westland is so much more satisfying.

 

Thought for the week:

When people ask me for advice on investments I find that my stress level goes up a notch, especially if I think I have to respond by saying anything but, “Don’t ask me.  I don’t have a clue.”  My sense is that most of the more knowledgeable wealth managers and investment advisors are in the same place when it comes to insurance questions.

It makes sense when you think about it.  Do you really have time to read, digest, and assimilate all the information that is available from the insurance carriers about their products, tax laws and design strategies while keeping current on the economy, stock market, investment products and COMPLIANCE?

Do you know how to increase the income your clients can receive from their retirement assets while reducing the volatility, the taxes and their stress?  Josh Ver Hoeve knows about every annuity known to man and can provide you with everything you need to know about placing annuity income in the portfolio. And he knows which is the best company to place it with at any point in time, and why.

Or when the young entrepreneur is looking for a way to increase the amount he is contributing to his IRA or Roth IRA; wouldn’t it be great to show him how to contribute to an insured fund that has the capability of earning upwards of 8% tax free with no downside risk, then pay tax-free income for life.  What a nice base to have in the retirement portfolio.  Nancy and Randy know how to do all of these things and more.  And you don’t have to call several different wholesalers to get it done.  They have all of the top carriers and the knowledge to use them appropriately.

Then there is long-term care.  You never again have to make a long-term care presentation on your own.  Call Chris and let her know you have a client who should have LTCi insurance.  We will design the case and propose the appropriate carrier based on age, sex, married status, health and financial ability.  Then we will present you with the proposal and assist in the presentation (if you like) by being available on the phone when you talk to the client.   Once the client says “yes” we will take the application, arrange for and track the underwriting and present you with the policy ready to present to the client.  Since the only other thing we could do for you is spend your commissions, I would say it doesn’t get much easier than that. 

Call us and experience the difference between talking to the “sales desk kid” at the “brokerage” and discussing your case with one of our 10 or 20 year veterans of the business.  Now that’s what I call providing professional advice.

 

One more thing:

There are only four financial scenarios possible with regard to potential long term care need.

1. Don’t have Insurance; don’t ever need LTC assistance 
2. Have LTC insurance; don’t end up ever needing LTC assistance 
3. Have LTC insurance; end up needing LTC assistance 
4. Don’t have LTC insurance; end up needing LTC assistance 

The truth is, 1, 2 & 3 will end up being okay for your client and their family; and you as their advisor.  . But the stark truth is long-term care is now costing upwards of $100,000 per year.  If you are not encouraging your clients to adopt a strategy that will take a chunk of that off the table, you will have to answer some tough questions from some distraught family members.

Thought for the day:

Tomorrow: (n) a mystical land where 99% of all human productivity, motivation and achievement is stored.

Think about it:

When creating a retirement income strategy, IRR is largely irrelevant once it is adjusted for the risk of outliving your assets. Living without assets is so much more painful than dying rich, that people who have not annuitized a portion of their retirement assets will either draw down less than they could otherwise afford (which by definition would make the IRR useless to lifestyle), or run a risk that they can’t afford at all.

Thought for the week:

Everyone is running from their bonds lately; but not from their fixed annuities.  My mom has a fixed annuity that continues to pay the same safe rate as it did four years ago.  While bonds have tanked, she just keep on clicking along….tax deferred I might add.  Her stocks have done well this year too and the overall risk in her portfolio is qulite manageable.  Conventional wisdom tells us that fixed insurance and annuity policies carry a low return and are not very efficient in a portfolio.  But studies from the Wharton School (and my mom’s personal experience) tell us that the various insurance products are just another asset class with a significant role to play in modern portfolio theory.

By properly combining these non-conforming assets with a portfolio of stocks, one can achieve the highest returns in the overall portfolio while minimizing the clients’ overall risk.  Tolerance for risk is generally (and no doubt should be) reduced among older clients; and they depend on us to manage their portfolio to last as long as they do.

Life insurance for younger clients is a great way to systematically build a basic retirement account that can be designed to create tax free accumulation and tax free retirement income that will compete very nicely with stocks and bond portfolios while addressing the risk of dying too young or living too long.

Quote of the month:

“I almost dropped my teeth”, she said.  “I mentioned to my client that we should set up a strategy for long-term care and that I had a way she could take care of it without paying premiums for insurance.

She was actually very interested.

When I explained MoneyGuard to her, I was amazed at how quickly she embraced the idea. Now she is introducing me to her bridge club.”

When you show your clients how they are actually better off with insurance than without, you will be amazed by the response.

If you are a female advisor:

Have you taken care of your own long-term care planning?  I assume you practice what you preach when it comes to investing your portfolio.  But have you set up a strategy for eventual long-term care?  Now is a great time to do this for yourself and your clients before the rates go up on conventional LTCi policies.  As I mentioned last week, rates are due to go up by as much as 30% for females beginning in September with most companies rolling them out over the next four months.

The linked-benefit products are a better deal if you have the money, but they too keep offering reduced benefits as interest rates continue to reside at historical lows.

Thought for the day:
“My choices in life were either to be a piano player in a whore house or a politician.  And to tell the truth, there’s hardly any difference.”    Harry Truman.

 

If you will read no further:

How many clients/prospective clients have you visited with this past week?  How many times did you bring up the subject of long-term care planning?  Sooner or later you will talk to each client about long-term care. But if you don’t bring it up now, the conversation will invariably be about what to do now that they are sick and looking forward to writing big checks for care.  Which conversation would you prefer to have?  What have you done about your own plans for LTCi?  Read this short newspaper article when you get a moment …just one of dozens of articles in the press each day. 

 

Thought for the day:

30% OFF SALE

ON LTC INSURANCE FOR SINGLE FEMALES.

Because females represent the majority of claims, the major LTCi carriers will begin rolling out their new gender-based pricing which will increase female rates by 20% – 40%. 

 

I just got off the phone with a friend of mine that wants to purchase some form of long-term care insurance.  She is not a client.  She has a financial planner.  She and I talked about her acquiring LTCi for herself and her husband about 2 ½ years ago when they were in their middle 50’s.  She thought it might be a good idea but kept putting it off.  This morning she told me her husband has been diagnosed with Parkinson’s and she is suffering from two broken shoulders as a result of a fall.  Why such an injury?  She has osteoporosis; didn’t know it until the fall.  Now she would like to act quickly to get insurance.  I’m thinkin’ her chances of success or slim at best.

To look at her you would never suspect any problems, but it is very likely she will end up spending the majority, (if not all) of her wealth on care someday…her words, not mine.  Over 60% of us will write checks for some form of nursing care for some period of time before we die.  The only other single life event with a greater chance of occurring… is dying.

It has been five years since the last stock market meltdown. We are coming up soon on the next one.  Careful investors are putting trailing stops on their stocks.  It’s only a matter of time.  Wouldn’t it be great if you took $100k off the table and “invested” it in to a linked-benefit policy, secure a significant benefit for your client and let them know that after the collapse, they can take it all back out and invest it elsewhere if that is their choice; not likely since they will have experienced the peace-of-mind knowing that they have a strategy in place to minimize the financial impact of future cost of their care.

If conventional LTCi is more appropriate for your client, you need go no further than Westland where we will design the case for you, help present it if desired, take the application and send you the policy ready for delivery.

Transamerica has announced their new product roll out beginning September 10, and we expect many of the other carriers in our portfolio to implement by year end. Now is the time to talk to your clients. The time is always short between the carrier announcement of the new product and the ability to submit applications on the current product series.  This is a one-time opportunity.  It would be a shame for people to potentially miss out on thousands of dollars of premium savings, so make your clients aware now.

 

Transamerica announces Transcare III and gender based pricing

John Hancock announces August 19 launch date for gender rates in five states

Thought for the day:

“It’s not how we fall: it’s how we get up”   Sharon Stone.

 

If you will read no further:

Reflect for a moment back to the 1980-82 recession followed by the Savings & Loan crisis in the mid ‘80s and Black Monday in October, 1987.  Then there was the recession of 1990-91 and again the dotcom bubble in 2001; followed most recently by the 2008-09 Great Recession. If you were young and earning a living and didn’t lose your job, each of these (in retrospect at least) represented an opportunity to invest for greater gains going forward.  But if you are retired when these occur and need to take income from a portfolio in decline and later as it tries to climb out of the “dumpster” it could be devastating.  And if your spouse needs care when this happens and even more is required from your portfolio to pay for it…..well, you get the idea.  And read this:  4% Rule WSJ 3/13

Buying insurance and never needing it may seem like a financial bummer.  Needing insurance and not having it can be a catastrophe.  Our clients are retiring in the most uncertain of times.  Don’t ignore the opportunity to provide them with the financial support that only insurance can achieve. 

 

Thought for the week:

Someone asked me recently how I come up with an original thought each week about insurance.  After all, PEARLS has been published each Monday for the past four years….and no repeats.  My answer is that every week I talk with financial advisers who ask questions or have situations involving insurance their clients own, or should own.  And every week there is a same theme repeated.  Nobody wants insurance when there is plenty of time to get it; and everyone wants insurance when it is too late.  That thought continually stimulates my editorial juices.

In all my years in this business I have delivered many different kinds of insurance benefits ranging all the way from modest to huge.  No one has ever told me they didn’t need or want the money; and no one has ever calculated the return on the premiums paid.  And invariably the money comes at the most opportune time.

Unfortunately, the majority of people I meet rely on their financial advisors who typically avoid advising them until they request it; and that is usually when it is too late.  Take life insurance for example; every retirement plan involves leaving a legacy.  Sometimes the clients want to leave money behind for their family.  But more importantly, they must plan to leave money behind otherwise they must plan to empty their portfolio the day before they die.  The best advisor among us cannot guarantee that strategy.

Purchasing life insurance later in life is not at all the same as it was when you were raising your family.  Then it was an expense you bore to replace lost income in case you “checked out” early. But later it becomes an investment.  Because later, it is no longer a matter of if you die, but when you die.  Every decent life insurance policy will deliver a 5% tax free return (or better) on the premiums you deposit into it if you die at life expectancy.  Want a higher return?  Die young!  On the other hand, how many of us would give up a few percentage points of return on our eventual legacy if it could buy us 6-10 more years of healthy living?

Make that life insurance product one that pays for long-term care when needed and provide the best quality of life for the insured, a heighted sense of financial security for the spouse and protect as much of the legacy as possible for the heirs.  Now what is wrong with recommending that to every client when you conduct their periodic review? And do it before they ask you about it, OK?

Oh, and one more thing.  The most difficult challenge when writing these weekly treatises, is coming up with the “Thought for the day”.