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LTC: A Possible Solution for Your Client's "Rainy Day" Funds

Posted by Partners Advantage on Tue, Sep 26, 2017 @ 11:00 AM

While many people have a “rainy day” fund, a lot of times it can be in a form of a savings or checking account at the local bank. The question becomes what will this money be used for? Vacation, second home, charity, etc. Insurance professionals should review their clients’ portfolios to make sure they have enough protection in case of death and/or health issues.


Let’s take Jack and Diane for an example:

"Jack and Diane are your typical retirees. They worked hard their entire lives, saved, and addressed the obstacles to an enjoyable retirement – except one. Jake and Diane have not prepared for the risk of needing long-term care (LTC). Should LTC become a reality, they have decided that bank type accounts or non-qualified assets they own, could be an alternative option to help pay for LTC expenses in the future. They have made the decision to be “self-funded.”

The Cost and Benefits of LTC

The issue with self-funding LTC comes with its high price tag. Jack and Diane, in all likelihood do not have enough to pay these costs. Whether it’s just Jack needing care or possibly both needing care in the future, there needs to be something rather than nothing to help cover costs.

A combination of life insurance + LTC and annuity + LTC benefits offering a potentially valuable, and often overlooked retirement tool which can offer opportunity for insurance professionals to help prepare clients for retirement concerns such as:

    • Living a long life
    • Covering LTC costs
    • Helping with asset accumulation
    • Assisting with wealth transfer

These contracts also offer:

    • Premiums that never increase*
    • Benefits even if LTC is never used
    • Flexibility of either a single or two-person contract

Asset-based long-term care policies work by leveraging existing assets to help pay for LTC expenses when needed or offering the flexibility of passing the asset to a named beneficiary, family or charity as a death benefit. Consider these products as part of your clients’ overall financial strategy.

One of the biggest untapped opportunities for you as financial professional is leveraging all the technological advances available to you such as social media, video production services and web-based leads. To be successful in today’s technology-driven world, you need to have a compelling online presence for your financial services business. If you are ready to learn how you can use technology to drive interest in your financial services business, you need a to get a copy of this eBook.

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Tags: long term care



This content is for informational and educational purposes only and is not designed, or intended, to be applicable to any person's individual circumstances. It should not be considered as investment advice, nor does it constitute a recommendation that anyone engage in (or refrain from) a particular course of action.

For financial professional use only. Not for public distribution.

As your clients' personal situations change (i.e., marriage, birth of a child or job promotion), so will their life insurance and retirement income needs. 

Care should be taken to ensure these products are suitable for their individual needs. They should weigh any associated costs before making a purchase. 
Life insurance has fees and charges associated with it that include costs of insurance that vary with such characteristics of the insured as sex, health and age, and has additional charges for riders that customize a policy to fit their individual needs. 

* Riders are additional features that may be available with some insurance products, are generally optional and could come with additional costs. Life insurance and annuity policies and/or associated riders and features may not be available in all states, and policy terms and conditions may vary by state.