Thought for the day:

The trouble with learning from experience is that you never graduate.

Doug Larson

If you will read no further:

One of the finest products of the past 25 years is threatened with extinction.  The Single Premium Life insurance policy is under pressure to be taken off the market until interest rates return to their long–term averages, especially the ones that will pay huge income when long-term care is needed.  That said, they are still available now and we suggest that you make a list of all clients who should have them in their portfolio.  Then get with the program to inform them of this window of opportunity.

Thought for the week:

Introducing the Financial Longevity Bond Concept

Would your clients gobble these bonds up?  These bonds are AAA rated from several major issuers.  Guaranteed for life and designed to mature to pay estate costs and/or pay a monthly tax-free income for health care costs prior to death, they can actually take the place of long-term care insurance.

Called a Financial Longevity Bond, it guarantees your lifespan by compensating your heirs in the event your death occurs earlier than expected.  Like a zero coupon bond, its interest is deferred until your death or disability.  However, it can be redeemed at any time, if desired, for its original cost.

Because of the longevity guarantee, the value at maturity varies based on your age when you purchase the bond for your portfolio as well as the time of your death.  The amount of monthly dividend payable for healthcare is a function of the maturity value.  For example: a healthy woman in her mid 60s could purchase this bond and be guaranteed a lifespan well into her 90s.  If she purchases a $100,000 bond and dies earlier than expected, say age 70 the bond will instantly mature for $195,000, tax-free under the IRS Code sec. 101.  If she lives past the longevity guarantee period of 20 years, the bond will mature for $150,000 at her death.  At anytime, if she were to need convalescent care, the bond would begin paying her a monthly tax-free income to reimburse her expenses up to $6000/month for as long as six years, a potential total of $450,000.

The older you are when you purchase the bond; your longevity risk is less valuable.  Therefore, it is best to purchase this bond as soon as you can identify money in the portfolio that will not be invested in the markets.  Certainly this is an attractive alternative to a bank CD as the yield to maturity (if never needed for income) is between 3% at 7%…and in some cases even more.  And one more thing, special tax incentives also apply.

If you are interested in how you can acquire this for yourself or your clients, send me an email at genep@westlandinc.com .  Please don’t call as I love to respond to everyone as soon as I can when I can – even in the middle of the night.  Phone calls and voice mail messages just make it more difficult.