Thought for the Day:

Thanksgiving dinners take eighteen hours to prepare.  They are consumed in twelve minutes.  Half-times take twelve minutes.  This is not a coincidence.                       Erma Bombeck

 

If you will read no Further:

In honor of the final week of LTCi Awareness Month (aren’t you glad I spared you the other three?) we present our partners Tom Rieske Jr. and Steve Cain in a special webcast titled “Top 10 Things We’ve Learned From Industry Meetings This Year”.  One item you might find most interesting is that among affluent investors, being able to afford health care (including long-term care) is the issue that concerns them the most. 

Unfortunately, experience tells us they will seldom bring it up until they are faced with a serious health event that puts the issue front and center for them.  And that is when it is probably too late for you to help them do some serious planning.  Experience also tells us that if you bring up the subject seriously as part of their retirement planning; and you do a credible job of framing the issue with planning options, they gladly consider your recommendations and usually accept them.

Contact us about doing client workshops to explain their options and possible solutions.  To view Tom and Steve’s entire presentation go to http://www.screencast.com/t/lUD17DFdbL

 

Thought for the week:

Insurance is a complex product, not because of what it does, but for how it must be contractually formed to protect the client’s rights to benefits and protect the company from abuse.  Combine the legalese of the contract with the salesperson’s attempt to explain the benefits and confusion is sure to reign. Now add the distastefulness of the subject matter,( death, disability, illness, long-term care) and it is no surprise that most clients are woefully underinsured.  How can you expect insurance to be purchased when neither the client nor the advisor is interested in discussing it.  Yet incurring a huge loss when you could have/should have purchased insurance, costs even more money and makes one feel stupid.

When it comes to life insurance, most advisors younger clients have life insurance equal to less than half the value of their potential lost future income. A head of household who earns $150k per year is insured for a $million or less when clearly his future earning expectancy is will over $3million.  They would not think of insuring their home for 1/3 it value.

Planners take great pains to manage a retiree’s portfolio against losses in down markets by investing some of the money in safer assets that will not appreciate as much, but will be less likely to go down as well.  We know that if we ignore that strategy, the downturns and recessions that we experience every 6 to 10 years can destroy much of what we have achieved in the interim.  Yet what is the difference if we ignore a 60% risk of paying up to $1/4million or more for nursing care?  Either way, the money is lost to the client and the estate.   That is exactly why we developed linked-benefit life.  We created a place to safely store some of the portfolio wealth in a liquid cash value account to minimize volatility and reduce portfolio risk while leveraging its value 3 to 5 times if the client ever needs to pay for long-term care. 

Financial Planners and Investment Advisors, who excel at leading their clients thru the maze of options to grow their wealth, must not keep insurance as secondary in importance.  When the client is unlucky and under-insured the results can be devastating to the spouse and family; and no amount of investment expertise can make up for it.

The cost of insurance can seem excessive.  The cost of not having it can be devastating.