How Many Assets to Self-insure?

[ltcadviser]

Well, yes. But you can pay a premium to have an insurance company give you more cash than your premium at the time of claim. Then you can use that money any way you want to pay for your care.
You can also look at the linked products, transfer a small portion of your money and leverage it to get more money if you need it. Pay $.20 on the dollar at claim time, rather than $1 for $1. In my experience, people with money didn't get it by not protecting themselves.

You are starting to sound like a marketer

 

[Nikita]

Nikki,

Outside of my HP 12C I do not have any fancy software tools, but I think your couple can self insure the risk should they elect to.

With 3M in projected liquidity, it would be terribly difficult to run out of money.
As you know, the cost of a nursing home in Iowa is $64,000 inflating at 6% per annum. In 20 years when your clients are 84/79 the cost is projected to be $205,000 year. If a $3,000,000 nest egg is generating a 4% IRR, a $205,000 annual withdrawal will take 22 years to burn through the nest egg. Granted, I did not inflate the $205,000 withdrawal by 6% per year, so it will be less than 22 years, but your clients are still projected to be in a position to pay for extended care if this is their comfort level.

The MedAmerica cash plan is a good policy. But if they are concerned about financials, just write a reimbursement model with Mass Mutual and save your clients 40% premium.

Either way, your clients will be fine.

It will not hurt your clients to have an LTC policy to take the sting out a little bit.

The LTC premium will not impact their lifestyle.

Show them the Mass Mutual reimbursement policy as an alternative to the cash policy with MedAmerica and allow them to make a choice as to what is most important to them. cash benefit, 40% more premium; reimbursement benefit, 40% savings; AAA rated company.

If they do have children and do not wish to burden the children with these issues, or wish to protect their assets somewhat as a legacy, they should buy some coverage.

Thanks, some great advice here. I was not familiar with the Mass Mutual reimbursement plan so I will investigate that. Just an update (and to complicate things) now this couple is telling me that one of their friends purchased an annuity to fund his LTC and they are thinking maybe that would be a good idea. I didn't think annuities were that popular these days for LTC given the interest rates. I'd like to hear some opinions on this. Thanks again everyone for all of your input.

 

[Tahoe Ray]

Thanks, some great advice here. I was not familiar with the Mass Mutual reimbursement plan so I will investigate that. Just an update (and to complicate things) now this couple is telling me that one of their friends purchased an annuity to fund his LTC and they are thinking maybe that would be a good idea. I didn't think annuities were that popular these days for LTC given the interest rates. I'd like to hear some opinions on this. Thanks again everyone for all of your input.

What state are you in (I'm mobile)? Lincoln and Forethought both have solid products...if they are referencing interest rates, they probably don't understand how those products work.

They (the friends) also might have purchased an indexed or variable product with an LTC rider...that will do very little for their LTC needs.

 

[Nikita]

What state are you in (I'm mobile)? Lincoln and Forethought both have solid products...if they are referencing interest rates, they probably don't understand how those products work.

They (the friends) also might have purchased an indexed or variable product with an LTC rider...that will do very little for their LTC needs.

This is in Iowa.......................................................................

 

[ltcadviser]

Thanks, some great advice here. I was not familiar with the Mass Mutual reimbursement plan so I will investigate that. Just an update (and to complicate things) now this couple is telling me that one of their friends purchased an annuity to fund his LTC and they are thinking maybe that would be a good idea. I didn't think annuities were that popular these days for LTC given the interest rates. I'd like to hear some opinions on this. Thanks again everyone for all of your input.

For healthy, younger applicants the premium leverage within LTC hybrid annuities is not as competitive as the premium leverage offered by traditional policies or hybrid LTC/life policies. They will do better outside of hybrid LTC annuities.

 

[Tahoe Ray]

For healthy, younger applicants the premium leverage within LTC hybrid annuities is not as competitive as the premium leverage offered by traditional policies or hybrid LTC/life policies. They will do better outside of hybrid LTC annuities.

I agree 100%...but co-insurance is still better than no insurance.

These clients sound like that they're already sold on a specific strategy.

This is where I would tend to position a GUL w/ chronic combined with a stand alone ltc policy.

That being said, it would be tough to have a third conversation about this...i would be very tempted to walk away.

 

[HealthGuy]

People that like to talk about 'self insuring' anything are usually a huge waste of time. They are the insurance company and their own insurance agent. NEXT

 

[billberry12]

People that like to talk about 'self insuring' anything are usually a huge waste of time. They are the insurance company and their own insurance agent. NEXT

I totally agree. They are in denial. It will never happen to them as they see it.
Total waste of time. Very hard sell at best, and unlikely to happen.