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May 12, 2014

May 12, 2014 By Mark

Thought for the day:

“As long as they are keeping score, we might as well try to win.”   -Geno Ariemma – Univ. Conn. Girls Basket Ball coach. 

 

If you will read no further:

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Family Home Auto

Which of these three are the most important to you?

Which of them are the most adequately insured?

 

So your young new client with a family and a budding career wants to get serious about his retirement and needs your advice. He’s maxing out his 401k at work but knows he needs to do more. Are you going to tell him to invest each year in a taxable managed portfolio to build retirement assets that will incur more taxes each year as he gets nearer retirement? Or will you set him up with a personal security strategy that will accumulate a tax deferred non-qualified retirement fund that will instantly mature for $1million or more if he gets sick or dies before his family is grown and he reaches retirement age.

All of our carriers offer these new style products that will predictably perform better than the typical retirement strategy, particularly when you consider current taxes, market volatility and risk and ultimately provide predictable after-tax lifetime income. Begin by getting a case design from Nancy or Randy for your young clients and compare with other alternatives you might show them. See what a great foundation plan this can be to help build family and retirement security.  

It’s certainly not your father’s life insurance anymore.

 

Thought for the week:

How long will it take you to turn $150,000 into $329,000guaranteed and tax free?  That’s a 5.4% (6 -7% tax equivalent) rate of return over 15 years.  I just placed this life insurance policy on a 73 year old man who truly believes he will avoid ever needing long-term care; but he heard about these life insurance policies that he could leave for his daughter or use for his own care if it turns out he is wrong.

What will you say when your good client calls?

“Hey John, this is Roger.  Helen had a stroke a few weeks ago and it looks like she is not going to rebound as we had hoped.  She is home now but needs a lot of care and that’s just not what I do well.  I have hired a caregiver but it looks like it’s going to cost about $4,000 per month. Do we have insurance for that?”

“No, Roger.  Remember, we agreed you could afford to pay for it yourself?” 

“Hmmm, I don’t remember that; but if you say so….  The problem is the doctors say she is going to get progressively less capable and I’ll probably have to have someone here at least 16 hours a day.  That’s going to bump the cost up to over $8000 per month.  I don’t want to put her in a nursing home.  Are you sure we can’t find some insurance for her?”

“Unfortunately, not.  We’ll just have to start liquidating your portfolio.  Hopefully it will be enough to last longer than she does.”

Had Advisor John worked with Westland to reposition a portion of Roger’s portfolio several years earlier while Helen’s health was still good, his response could have been more like….

“Oh, I’m so sorry to hear that, Roger.  But yes, we do have a plan in place.  Remember we moved those two CDs into the insurance contract several years ago?  So we can begin by submitting a claim and collect as much as $6,200 per month.  By the way, if you need some help coordinating her care, the insurance company will provide that for free.  One call and we can take care of everything.”

We have been hearing of a lot positive stories as advisors tell us of the claims they are making on the MoneyGuard and TLC policies they placed in their clients’ portfolios a few years back.

Now we have several different linked-benefit products to fit a variety of circumstances from Single Premium plans to multiple deposits to lifetime “investments”….all of which will create an impressive return to your client whether or not long-term care is actually needed some day. 

You should never have to tell your client there is no plan to help pay for their long-term care. 

Filed Under: Pearls from Pastula

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