Broker Check

Asset Care Solutions

CHALLENGE: Secure income that lasts a lifetime

FIVE KEY RISKS: 1) Longevity, 2) Inflation, 3) Asset Allocation, 4) Withdrawal, 5) Health Care

Concern: Long Term Care costs in the future and having enough money to live on during retirement. This is part of your total financial plan.

In the future if you are unable to perform two of the six activities of daily living (ADL) then you will need money to pay for that care whether received in your home or in a facility. Medicare does not pay for "custodial care."

There are several solutions:

  1. Self insurance using your own money
  2. Long Term Care insurance
  3. Life Insurance with Long Term Care Benefit
  4. Annuity with Long Term Care Benefit
  5. Combination of any of those above

1) SELF INSURED:

Average cost of $150 per day for full care is equal to $4,500 per month which is $54,000 per year. Given inflation of the cost of care your money may be used up too quickly. Quality of care is a major concern at the time of need. You want the best care, not the least cost plus quality of life for you and your family. You want professional care and not solely rely on your family for care.

2) PURCHASE LONG TERM CARE INSURANCE:

You pick the daily benefit dollar amount and the length of benefit period. For example: $150 per day for up to 5 years = $270,000 total benefit pool of money available.

Some options:

  • Benefit Inflation Rider
  • Shared Care Benefit
  • Nonforfeiture Benefit
  • Spousal Discount

Asset Care uses existing assets and leverages into a much greater amount for Long Term Care benefit. If Long Term Care is not needed, you still have the assets to use of pass to heirs.

What “assets” can I, or should I, use for Asset Care?

  • CDs
  • Investments
  • IRA
  • Tax free exchange of current life insurance and/or annuity

Make more efficient use of existing assets by simply moving it from one “bucket” to another. Leverage the asset into possible tax free benefit.


3) LIFE INSURANCE WITH LONG TERM CARE BENEFIT

Solution:

A. Reallocate some existing money that will provide:

  • Tax FreeBenefit for long term care
  • Tax FreeDeath Benefit if long term care is not needed
  • Option for cash if long term care or death benefit is not needed

You control the beneficiary. This will protect your money/assets in event you are sick or hurt and need long term care. This will allow current money that is earning little interest now to be reallocated to take care of several needs plus the money is still there if needed in the future for possible interest.

Each person can be insured or Long Term care benefit can be "shared" by both spouses combined.

OR

B. Guaranteed level premium for long term care benefit/life insurance benefit for lifetime coverage.

A review of current life insurance is beneficial. You may be able to do a tax free exchange into a new policy that covers both needs. Sometimes the new policy does not require any more premiums.

4) ANNUITY WITH LONG TERM CARE BENEFIT

  • Reposition current assets into tax deferred growth with Long Term Care benefits up to three times the deposit amount.
  • Long Term Care benefit is available tax free.
  • Surrender charge applies on lump sum withdrawal; waived if used for terminal illness or for long term care or death benefit; or up to 10% withdrawal each year.
  • Annuity earns interest