Thought for the day:

“Do, or do not.  There is no try”                

Yoda

 

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Next year PEARLS will be a biweekly publication with broader array of financial planning topics that will include additional creative uses for insurance and annuity products as well as timely information around retirement planning. You can receive notice of this BLOG as well as access to prior issues by subscribing now below.  You will also be encouraged to weigh in with your own reaction and ideas about the topics that we all must address as we help our clients navigate through the issues facing them in preparing for, and living through their financial lives.

 

Thought for the week:

We are receiving a growing number of calls from advisors trying to find long-term care policies for their aging clients who are coming to accept the elevated chance that they will need long-term care someday.  This usually occurs as they are experiencing some chronic illness that convinces them of their own mortality and the likely need to pay for the expensive care that often precedes death.  Now they would like to have insurance; but they are too old and/or too sick to get it. 

Some planners are seeing the light and using this situation as an opportunity to help others, specifically the heirs of these clients.

Dorothy is an 84 year old client who has inquired to her advisor about long-term care insurance.  Unfortunately, her arthritis has become more serious and because of that and her advanced age, LTCi is not possible.  Fortunately, she has enough money to pay for her care; it’s just that it will put a significant dent in her estate.  She was disappointed we could not help her; but she understood.

We suggested to her advisor that this might be a good opportunity to do something to preclude this from happening to her son and his wife.  Since she was now aware of what the financial impact can be on one’s wealth, we suggested that Dorothy help her son and his wife prepare for long-term care by purchasing a joint linked-benefit life insurance policy on them.  He’s 59 and she is 55.  Both are in good health. 

Dorothy will not be giving away her money to do this.  But she sees the value in moving $150,000 from a couple of bank accounts into the joint policy on the “kids”.  She will be the owner of the policy and they are the insureds.  So she continues to control the money and will have easy access to it if she needs it for her own care…or anything else for that matter.  If not, the ownership of the policy will pass to the kids when she dies; and just as important…they will have significant long-term care protection so that when they are in their 80’s and become sensitive to the issue, they will not have to be concerned about the source of income to pay for it like their mom.  In the meantime, she still owns and controls the money; it is just safely tucked away in the insurance policy securing significant benefits for the parents of her grandchildren.

This is just one example of the many ways to use life insurance to add guarantees and predictability to the portfolio to benefit your clients and their families.  We believe the more you understand the many applications of insurance in a financial planning context, the more your clients will benefit.  Call us with questions and cases with which we may be of assistance.