Protection Products

Why Self-Fund if You Don’t Have To?

• Tarama Wallen
• 01/23/2019

The best planning for long-term care is to amass long-term wealth, correct? Not really. If your clients are considering self-funding, you need to walk them through the numbers.

Take, for example, a 65-year-old married female in Texas. By repositioning $100,000 of her assets today, she can create a total pool of $507,819 in 20 years to spend on qualified long-term care expenses. P.S. Those benefits are tax free.  

To me, this is a no-brainer!

Why would a client choose to use their own money when they could leverage it with insurance? Why pay full price when you can pay the discount amount? Do you self-insure your car? No, because why pay 100 percent of the costs if you don’t have to?!

Let’s not forget: Self-funding means leaving not much, if anything, to the loved ones left behind.

For a more in-depth conversation around leveraging your assets to fund LTC – Just Ask. Use my calendar link to schedule a time that’s convenient for us to talk.

Why Spouses May Want to Consider Joint LTC

• Tamara Wallen
• 01/16/2019

Spouses share a lot of things – house, cars, kids, bank accounts. Why not long-term care insurance? Yes, spouses can choose a long-term care policy with SHARED coverage, giving them a pool of benefits they can split.

One of the unknowns with long-term care is predicting how long you will need benefits. While the average need for care is about three years, your clients could die before needing care. Or just the opposite, they could have a long-lasting condition, such as Alzheimer’s, and need care for much longer.

Sharing benefits is a great way to hedge bets when deciding on a benefit period. It may make a couple more comfortable with purchasing a shorter duration and can save them quite a bit of money.

On the other hand, a lifetime benefit pool covers both short and long-term risks and ensures both spouses are covered no matter the timeframe of coverage needed. Of course, this is a bit pricier. Your clients will have to consider the risks they’re willing to take – together.

For more information on sharing benefits, JUST ASK. Use my calendar link to schedule a time that’s convenient for us to talk.

Linked Benefit Explained in 1-2-3

• Tamara Wallen
• 01/09/2019

Most advisor aren’t experts in long-term care. So it’s understandable if you struggle to explain the concept of linked benefit, let alone convince someone to purchase it. Especially when you’d rather be doing something else. Anything else!

But because long-term care can be so challenging, that’s exactly the reason it’s crucial to take the time to explain all options available. That may mean taking the time to educate yourself first.

Since linked benefit plans combine both life insurance or annuities with long-term care, you might think they’re complicated. However, that is not the case. 

Essentially, a linked-benefit policy has three components:

1. LIVE - An income-tax-free benefit pays for long-term care expenses, which could include home care, adult day care, assisted living and/or skilled nursing care. The policy is issued with a monthly benefit that is paid for a specific number of years, based on the policy design and riders purchased. Some policies offer benefits that can last for up to seven years.
2. DIE - The life insurance pays an income-tax-free death benefit. The death benefit is reduced by any loans, withdrawals and/or benefits the insurer has already paid. Many policies also offer a residual death benefit, usually 10-20 percent of the initial amount of insurance, if the entire benefit has been consumed by long-term care expenses.
3. QUIT – The policy’s cash value earns a set rate of return. Once all the planned premiums have been paid, the policy can be surrendered for the actual cash value, which is often 80-100 percent of the premium paid. Policy surrenders are subject to any vesting schedule and adjusted for any claims, loans or cash withdrawals.

It's an easy conversation to have if you’re a long-term care marketer like me, but not so much if this is not your everyday focus. Avoiding the conversation doesn’t have to be your default plan. If you have questions, JUST ASK! Use my calendar link to schedule a time that’s convenient for us to talk.

3 Reasons to Love Indemnity Policies

• Tamara Wallen
• 01/02/2019

Indemnity or reimbursement – that is the question. For long-term care policies, traditional reimbursement policies pay benefits based upon the actual expenses you incur. An indemnity policy, however, pays you a monthly CASH benefit, regardless of expenses incurred.

As you may have guessed by the title, there are three reasons why I love indemnity policies.

1. You don’t have to keep track of receipts. Now, I don’t know about you, but I can barely keep track of my tax papers, let alone every medical bill or receipt I would be required to keep track of for long-term care.

2. You don’t have to use a qualified provider. Aunt Susie can come over and help! I would much rather it be Aunt Susie seeing all my business than some guy who looks like my mailman. No thank you!

3. Money, Money, Money, Moneyyy! What better way is there to dip into the carrier’s pocket faster? Cash can be used for care, travel expenses, prescriptions, medical equipment, meals – whatever you want!

Case Study

• 65-year-old female, married
• $5,000 monthly benefit, 6-year duration, no inflation
• She goes on claim but only needs $2,000 a month for care; after two years, she passes away
• With a reimbursement policy, her spouse would be reimbursed her care costs: $48,000
• With an indemnity policy
  • If she received the same care as above, her spouse would pocket $72,000 cash after her bills are paid
  • Keep in mind she can receive care from Aunt Susie; because she is family, she doesn’t charge as much. The spouse could net $120,000.

I know every situation is different, but so many people see the big number on the paper and think a reimbursement is the way to go. Just make sure you have all the facts. If you don’t – Just Ask! Use my calendar link to schedule a time that’s convenient for us to talk.