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- #21
Jack,
I'm new to insurance and appreciate your point of view. Nonetheless, if the potential client is "not educated", shouldn't the agents job be to educate the client on the product and how it may/may not fit into her needs? She may be in good health, but not want to spend time in a Medicaid facility should she need some form of extended care. Maybe a small short term care product would be suitable, or an annuity? Who knows as it is tough to guess, but I would never recommend someone to dump off 2/3rds of their liquid assets into a product like that.
I would like your input on the idea of bringing in a child. To me, bringing in a child may not always be a great idea. The child may have an ulterior motive for his or her recommendations to the parent and said ideas may not be in the best interest of the parent. A small annuity might be a good fit in this situation, but the child might object to this idea(or any other ideas) not because they are a good alternative, but rather that they could cut into his expectancy of mothers estate. I am hesitant to bring in a third party unless I really think that the third party would be a neutral party.
Nonetheless, my past life has taught me the value of documentation and I absolutely agree that, if one were to sell a product in the situation above, that some form of full disclosure is signed.
I always believe in bringing in adult children to the table, if the relationship between parent and child warrants it. Down the road, the child will manage the claim should it occur. Makes sense to meet them today.
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LTCI is about protecting assets. She has no assets to protect.
If she uses 57% of her income to fund a traditional policy at $2k/m as you suggested (that would
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Traditional policy would have been 7-10% of income, but even if an adviser keeps premium to 7% of income threshold there is still inflation and rate increase risk to address. At end of day as Arthur stated the client will wind up on Medicaid. Or the policy will lapse.