Selling systems

Nov 24, 2018

  1. Allen Trent
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    Allen Trent Guru

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    Are you still suggesting a trust to own the life insurance as much today as in the past? With the current estate tax exemption & automatically doubling of the exemption for a spouse, I would be curious as to why you are suggesting a trust own it. I assume you are talking about an ILIT. Just curious if the cost to administer the trust annually & costs to issue crummy letters are worth it if the person doesnt face an estate tax.

    Or do you have another reason for suggesting the life insurance be trust owned?
     
  2. Golfnut2112
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    Golfnut2112 Guru

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    There is no cost other than the initial set up which may have already been paid years ago and there are always other assets in the trust. The purpose of the trust is to protect the assets from a nursing home. Most of the people in my area could never afford a nursing home policy with the average cost of care around $7,500 per month. A few months ago I got a quote for my wife and I and it was $720 per month and are 54. Most of my clients doing this are in their 70’s, the ironic thing is I used to sell a lot of nursing home policies in the early 90’s and people could actually afford them, one of the things I pointed out was the ability to go where you want as a private pay patient.
     
    Last edited: Nov 26, 2018
  3. somarco
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    somarco That Medicare Guy

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    Same is true for a lot of things . . .
     
    somarco, Nov 26, 2018
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  4. Allen Trent
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    Allen Trent Guru

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    Ok. I assumed it was for a different reason than Estate Taxes. I am sure you already know this, but a trust must be irrevocable to avoid the Medicaid spend down and there is a 5 year look back for assets placed in trust for the Medicaid spend down.

    Completely agree with you that there has been a huge change in costs & carriers in the stand alone LTC market. I think that is why you have seen explosive growth in the hybrid LTC/ Chronic illness riders & policies because the consumers still have interest in some protection. But they are not willing to pay the current costs of a stand alone LTC.
     
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