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November 06, 2012 at 08:12 PM
What steps are you taking to ensure your high-net-worth clients are prepared for the unforeseen in their future?
As advisors, we can’t predict an uncontrollable financial crisis or when assistance will be needed, but we can help our clients mitigate the risk with long-term-care insurance (LTCI).
Three out of four Americans will have a need for extended care that is not covered by traditional health insurance or Medicare, at an average cost today of $300,000.
When clients want to self-insure against this risk, I recommend that they invest $300,000 in a vehicle with tax advantages and an inflation factor built-in. The vehicle can help the clients pre-fund their future long-term care (LTC) needs and increase the odds that the plan will keep pace with the rising cost of care.
If, however, a client is insurable, transferring the risk with insurance is more cost-effective. For younger, healthier clients, an LTC policy can create a $300,000 pool of money for a nominal premium.
The $300,000 pool grows at a guaranteed interest rate, tax-free and creditor-protected during the client’s lifetime.
The money is available immediately if needed and as many times as needed throughout the policyholder’s lifetime.
The $300,000 LTCI fund is more likely than a self-insured fund to keep pace with the rising cost of care and makes it possible for clients to keep their lifestyle intact.
