Here we go again – the discussion of addressing the extended healthcare (aka long term care) funding issue. For many, self-funding ends up being the answer. By default or by decision, people elect to bear the full burden of the cost associated with an extended healthcare event and not elect an insurance-based solution.
So, here is a question.
If there is an extended healthcare event that occurs, is your client’s money truly allocated to address the funding needs?
You’ve got to be honest.
If those funds are carved out and dedicated specifically for care, congratulations. Otherwise, you have some planning to do.
Rather than come at it from the monthly benefit perspective, let’s think about it as a pool of money.
To some, that pool will be a couple hundred thousand dollars. For others, it may be in excess of a million dollars. It all depends on what the client’s perspective – which is typically based upon personal experience.
The long and the short of it is this – making a recommendation based on industry averages and talking points provides a solution but is it the solution that reflects your client’s needs and wants?
Be honest – do you have that conversation?
Let’s assume that conversation determines that they want a pool of $1 million available for extended healthcare costs. Their options are to allocate specific funds and try to grow them into that $1 million pool, reposition $1 million of existing assets to fund that potential need, leverage their money using an insurance based solution, or some combination of the three.
This is the whole point of the conversation – determine which strategy that they find most comfortable and comforting.
If your client is willing to forego an insurance solution and opt to self-fund, do they want to do that in the most tax-friendly way?
The Care Solutions portfolio can do that.
That’s the beauty of it – the Care Solutions portfolio is not a “one size fits all solution” which means that it can be utilized as a primary part of the funding strategy or a secondary component of a strategy or a catastrophic solution.
It all depends on what the clients want.