hybrid

A Debate Between Traditional Long Term Care Insurance and…

Presented by Leonard Berthelsen There seems to be quite a debate being waged between traditional LTC products and the hybrids of life and annuity products. The positive of this is the attention long term care is receiving. I read comments like “I’ll lose it if I don’t use it”. Yes, there is statistical chance that a client would pass away and not use the product’s benefits with the traditional LTC products. However, I don’t believe there actually is a large statistical chance especially with long life expectancy and the utilization of home and community care services in a traditional LTC product. Also, these plans now allow the untrained friends and family care providers to be paid for these services from the policy by many of the carriers. When all is considered, access to long term care services will probably increase. Yes, asset based LTC products offer a” lock in” when purchased and there would be no future rate increases with that product. For some consumers, this is desirable. For many other potential clients, the single premium deposit or purchase is just not in the retirement plan. Moving a large block of money to have dedicated to LTC coverage certainly is not for everyone. In certain situations, does the client understand that the first money to get used in a hybrid annuity long term care claim is their own deposit? Traditional LTC products and carriers have a much better understanding of claims, costs, and morbidity than they did five years ago and certainly better than 25 years ago. Only time will tell if the carriers have it right. When financial planners and advisors design plans for their clients using traditional LTC products, there are certainly options in those plans that reduce the risk of future rate adjustments. I have even seen comments that there is a concern that when benefits are drawn from a LTC plan, those benefits would be taxed. Since 1996 when tax qualified LTC plans became part of the LTC insurance landscape, these benefits have been paid tax free. In the 1995 legislation that gave us tax-free LTC benefits, it also made all plans sold prior to 1996 grandfathered and treated as if they were tax qualified. This issue has become somewhat of a lightning rod for justifying one design plan over the other. I’m not an advocate for one over the other, they both have their place. Advisors should recognize that clients have different needs, just as we have different products for those needs. One is not at the expense of the other. Both designs can co-exist and both plans can flourish.

Long Term Care

Facing our own Mortality: Will your Trip be Memorable?

Presented by Leonard Berthelsen The data is out there, 70 million baby boomers are entering retirement and also coming to grips with their own mortality. Will our clients be ready for this trip and will you make it a memorable one for them and their families? Retirement should be all about family, friends, faith, travel and many pleasant memories. Planning now for the possibility of a Long Term Care need erases the concerns of who will provide care, where that care will be rendered, and how often. Give your clients peace of mind and allow them to focus on the things that really matter in retirement. Long term care coverage is that peace that so many individuals and their families share in this aging trip. Have you made that available to your clients or had the conversation about this? I have discussed in other blog postings about friends and family affected by this process. The more I reflect on this issue, the more keenly aware I become that we have to have this conversation. Yes, it is the professional, ethical, and right thing to do, but sometimes this conversation can be difficult. I have come to the conclusion that in order for there to be a peaceful, memorable process for this aging trip, I need to find a way to soften the financial burden associated with it. Whether it is traditional long term care insurance, a hybrid life insurance plan or a linked benefit annuity, it doesn’t matter, something needs to be there to help our clients with this aging trip. Have you had the conversation; is your client and their family going to have a peaceful and memorable trip?

Annuities

Annuities Can Fill Investing Gaps

Presented by Richard Mangiameli Fixed Index Annuities are celebrating their 20^th anniversary. The first index annuity came out in 1995, and by 1997 there were over three dozen life insurance companies that created their own variation. Over this time frame, more than $400 Billion has been used to purchase this powerful planning product. Even today you will hear clients asking about the Hybrid Fixed Annuity. When we hear “Hybrid” we associate that with a lot of different products – we mostly hear it in the automobile industry. But today in the insurance and financial planning industry, many agents are being asked by their prospective clients about the “Hybrid” annuity, and that prospect or client is asking about the Fixed Index Annuity. What they hear and read is about “hybrid index strategies/indices” and the “hybrid income riders”. It’s time to brush up on your knowledge of Fixed Index Annuities – the Hybrid Fixed Index Annuity! For more information, give Richard Mangiameli, LUTCF, FSS of Financial Brokerage a call at 800-397-9999.

Long Term Care and Disability Insurance

Managing the Long Term Care Risk from a Different…

Presented by Leonard Berthelsen Traditional long term care insurance has been a staple in the insurance agents toolbox for twenty-five plus years. With some consumers though, it just doesn’t make sense to them to buy something that they may never use. (I think further education needs to be given for this mindset.) Sometimes it seems we kind of bang our heads against the wall trying to convince people to do something that they believe is not right for them. Managing the risk for our clients is part of a sound financial strategy that we bring to the table. Helping preserve our clients’ assets that they have accumulated as well as providing a legacy to be left behind for their loved ones is part of that strategy. That’s a difference maker! Linked products, hybrid products and products that provide asset protection against a long term care crisis while at the same time providing life insurance dollars to fund that legacy are key attributes in managing that risk. Yes, there is an ever increasing risk that long term care issues will affect our clients sooner or later – we are living longer. This can be a win-win for our clients. Traditional long term care coverage will certainly mitigate the risk. But what happens if long term care issues don’t come into the equation for our client? With these new products, the value of the life insurance is there and is able to be used just like traditional life insurance. The key to this type of product is that a benefit is going to be paid one way or the other. So the next time you run into resistance about traditional long term care coverage, think from a different viewpoint and you just might find your client receptive. Contact your sales manager at Financial Brokerage at 800-397-9999 to learn more about how these products work. Learn how to position this with your clients and they just might be open to a discussion that they previously had no interest in.

Annuities

Presented by Richard Mangiameli If you look up the definition of “hybrid”, one of the results is “anything derived from heterogeneous sources, or composed of elements of different or incongruous kinds”. We can find Hybrid Power, Hybrid Literature, Hybrid Games and of course Hybrid Vehicles. In the insurance industry, we have hybrid insurance products where insurance companies have created products that are composed of different elements; annuity or life insurance products with elements of long term care insurance. LIMRA studies show that in 2013, 67% of people were worried about having sufficient money for a comfortable retirement and 58% were concerned about paying for long-term care services, while 39% express concern about financial impacts of premature death. It’s possible to address all three concerns with many of the new hybrid products available today. Call me to learn more!