Our discussion for the past couple weeks has been focused on Asset Care and the Return of Premium product solution. Today, we will piggy back off of the previous discussions and I’ll share with you a conversation that I had with an advisor a short time ago.
Before we get into it, if you have not seen the January Coffee Break, you can check it out here. Or, you can catch any past episode on demand at LTCcoffeebreak.com.
Remember, a new episode premiers the second Tuesday of each month.
Remember what Niki Johnson said in her segment, the purpose for considering Asset Care Return of Premium is because the clients concern is a return OF their money rather than a return on their money.
A short time after the episode was aired, an advisor contacted me and said this, “ leverage, legacy, and long term care benefits are gained but at what cost.”
That was (and still is) a fine question. So, we pulled together a quick comparison for a male age 60, dropping in $150,000 of premium searching for the benefits that it would generate. The LTC benefits did not include inflation and the plan design was limited to the 2% acceleration (50 month base) plus the 50 month continuation of benefits rider.
Here is what we found.
Asset Care Return of Premium
| Year | Death Benefit | CSV | Mo. LTC Benefit |
| 1 | 320,907 | 150,000 | 5,365 |
| 2 | 311,371 | 150,000 | 5,365 |
| 3 | 302,218 | 150,000 | 5,365 |
| 4 | 293,447 | 150,000 | 5,365 |
| 5 | 285,032 | 150,000 | 5,365 |
| 10 | 268,245 | 150,000 | 5,365 |
| 15 | 268,245 | 173,345 | 5,365 |
Asset Care without ROP
| Year | Death Benefit | CSV | Mo. LTC Benefit |
| 1 | 294,967 | 129,408 | 5,899 |
| 2 | 294,967 | 133,372 | 5,899 |
| 3 | 294,967 | 137,410 | 5,899 |
| 4 | 294,967 | 141,519 | 5,899 |
| 5 | 294,967 | 145,696 | 5,899 |
| 10 | 294,967 | 167,636 | 5,899 |
| 15 | 294,967 | 190,614 | 5,899 |
As you would expect, the return of premium feature produces the benefits from the policy. And, you should note that the cash surrender value in year 6 of the policy without ROP exceeds the ROP product. Another note is that the death benefit for the ROP product starts higher then slides down and levelizes in year 8. This is necessary to maintain the definition of life insurance.
With this in mind, it is also important to share another obvious statement – when the wants, needs, and goals of clients are known, the right solution will emerge.
Learn more about Care Solutions by contacting me via email at kevin.fisher@oneamerica.com or at (678) 512-9627.
For illustrations and product assistance, please contact my internal Justin Fox at (844) 658-3725 or via email at justinfox.isp@oneamerica.com
And, as always, thanks for taking a little bit of time for me.
Fridays with Fisher 
You must be logged in to post a comment.