Insuring a Non-Working Spouse

Presented by Jim Linn

Have you ever considered the cost to replace a stay-at-home spouse?  According to an article on http://www.businessinsider.com/value-of-stay-at-home-moms-2013-5 that value is in excess of $100,000 per year. 

Consider the fact that the role of a stay-at-home spouse encompasses cooking, cleaning, errand running, chauffeuring and child care along with a list of additional daunting day to day tasks.  In the absence of this individual, the surviving spouse would be faced with the costs to hire someone to assume these duties.  Life insurance can provide a lump sum benefit that can provide the needed income to cover these costs.  Even though the non-working spouse does not receive a pay check there is still value in what they do and insurance carriers recognize that.  The amount of life insurance that can be placed on a non-working spouse varies by carrier and is anywhere from half of the working spouses amount of coverage up to 100% of the working spouses coverage.  As you meet with families that have a non-working spouse be sure to educate your clients on the value of a non-working spouse.  As always, your life marketing managers are here to assist with any questions you may have.  You can reach them at 1-800-397-9999.

Providing LTC Coverage for an Uninsurable Spouse

Presented by Tim Dreher

Long Term Care awareness month is November and I wanted to expand on my last blog where I wrote about adding an insurable spouse/partner to take advantage of the substantial discounts that the carriers provide. In most cases the combined premium when adding the spouse/partner at minimum benefits, is less than if the one applied for coverage by themselves.

So what can be done in a situation where a spouse/partner is uninsurable? This can be a challenge to even the most seasoned producer. Many times the prospect will abruptly end the conversation when it is determined that there is an uninsurable spouse/partner.

It is important to point out to the prospect that what we see frequently happen, is the healthy spouse/partner becomes the care giver for that uninsurable spouse/partner. Many times that can happen much sooner than what anyone anticipated. As a result of being that caregiver, the health of the insurable spouse/partner declines rapidly due to the stresses of being that caregiver. It has been reported that up to 60% of caregivers were unprepared for the physical demands of being that caregiver.1 There is probably not a better argument for the healthy spouse/partner to consider and purchase LTCi.

Mutual of Omaha’s MutualCare LTCi policy has a very unique rider, called the Security Benefit Rider that can be added to an LTC policy to provide a solution for just such a situation.

If the insured spouse/partner requires long term care services after the policy is in effect, the Rider can be activated to provide additional funds to help pay for the cost of providing care for the uninsurable spouse/partner. Up to 60% of the insured’s monthly reimbursement benefit is made available to help pay for approved care for the uninsured spouse/partner. There is no medical underwriting required for this Rider, and the additional benefits paid out for the approved care do not reduce the insured’s policy limits. It is a separate benefit for an uninsurable spouse.

Unfortunately, there will be times when a producer will find themselves in a situation where couples/partners apply for coverage and one is declined. When this happens, we often will hear “If we both can’t get it, than we don’t want it”. You might want to consider this rider, as it might just be the answer to saving the sale.

This unique feature when understood, can be a great relief for uninsurable spouses/partners.

Talk with one of the LTCi marketing specialists at Financial Brokerage about more details on how this rider works.

  1. Transamerica LTC study 2015

Insuring a Spouse For Free with LTCi, (well almost)

Presented by Tim Dreher

Nearly every day while working with insurance producers, I get a request to run an LTCi illustration for an individual quote for a person whom is either married or has a domestic partner. In these situations, I always ask why we are not quoting the other spouse/partner. The answers that I normally hear are either the spouse/partner is uninsurable or that the other spouse/partner is just not interested in purchasing LTCi.

I have noticed that the majority of these situations is a wife wanting LTC protection and a husband that either does not see the need or doesn’t want it because “I’ll never need it, I’ll drop dead first”.

Let’s face it, most caregivers in a long term care situation are women whom have seen it happen to a friend or maybe have even been a caregiver themselves and understand the value and need for LTC insurance.

Many of the LTC carriers we work with at Financial Brokerage offer a substantial discount for couples or domestic partners when both apply for coverage.

In those cases where the spouse/partner is insurable, I will suggest adding the spouse/partner to the quote at the minimum benefits available in order to take advantage of the spousal/partner discount.

It has been my experience that adding the spouse/partner at the minimum benefits results in a premium that is less for both spouses/partners than the cost for a policy where only one is applying.

For example, let’s look at a couple, female and male, both age 55, looking at a plan with a $5,000 per month benefit for her, 5 year benefit duration, and a 90 day elimination period with 3% compound inflation protection where the female wants coverage but the husband does not. I ran the illustrations with 3 of our most competitive carriers.

By adding the husband at minimum benefits ($1,500 per month for 2 years, with a 90 day elimination period and no inflation) the resulting savings were between 13% up to a whopping 37% savings over the price of quoting the female only. That is giving the benefit quoted above for the female spouse and the male (at minimum protection) for under the premium of what it would have been for her plan only.

The savings for a 3 year benefit (everything else the same) resulted in premium savings of between 21% on the low end to 30% savings on the high end.

LTC insurance carriers like couples and their premiums reflect it.

So the next time you’re in a situation similar to the one above, show your clients a great idea on how you can save them money on their LTCi premium while at the same time giving a reluctant spouse some coverage too.

MYTH: “I won’t need life insurance when I retire.”

Presented by Brian Leising

Four responses you can use with your clients.

2- Really? So, that means you are not married or don’t love your spouse?

If you’re not married or don’t plan to be when you die, stop reading this. Most couples don’t realize when one spouse dies their social security check dies with them. What if the first one to go had the larger Social Security check? Can your spouse maintain the same standard of living without that lost income? It’s time to analyze the consequences and determine how much life insurance is needed to replace your lost social security income.

See response #3 next week.

Protection for the stay-at-home spouse?

Presented by Donna Ries

 

Few carriers allow disability income insurance protection for the homemaker due to lack of income.  Another alternative to consider is a critical illness plan.

In the case of a major event such as cancer, heart attack or stroke, a lump sum payment may help the family cope with such a situation.  To qualify for critical illness, there is typically limited income restrictions, limited occupational analysis and an easy solution to a huge potential financial burden on the family.

The hidden cost of major health crisis is something we don’t give much thought to.  Transportation, housing and time off of work all become big issues if care is being received away from where a person lives.  Health insurance policies don’t pay for the non-medical cost of care.

“Cancer, heart attacks and strokes happen at all ages and most people are not prepared for either the emotional or financial cost,” explains Jesse Slome, Executive Director of the Industry Trade Organization.  “Nearly two-thirds of U.S. bankruptcies are the result of medical expenses and 78 percent of those filing for bankruptcy had health insurance when they were first diagnosed.”

A lump sum payment may be the answer to help the affected spouse to concentrate on recovery.  Your Financial Brokerage marketer is here to help you place more of this business.  Give us a call today at 800-397-9999 to discuss the plans available.