NEW – Consumer Presentation – Compare

Earlier this week, the Asset Care consumer presentation report was introduced.  The report (not available in CA) provides a narrative for agents and advisors to use to augment the conversations that they have with their clients.  And, more importantly, serves as a reminder of why they are discussing long term care planning and how it can work for them.

There is one segment of the presentation that I think is worth its weight in gold – the Asset Care Benefits section, especially when you are comparing two possible solutions for the client. 

Let me set the stage. 

The clients are a couple, both are age 63 and are looking to secure a policy with $10,000 monthly benefit growing at a rate of 3% compound every year until the policy is no longer needed.  The premium will be paid annually. 

Using  the Consumer Presentation’s cumulative benefit page, here is how the benefit scenarios work out.  (Note: in order to make this comparison, you will need to illustrate the limited duration scenario and produce the consumer presentation then illustrate the lifetime scenario and generate that report.)

REMEMBER – THIS IS A COMPARISON OF BENEFITS ASSUMING A CLAIM.

Let’s establish the baseline for the claim comparison – we are going to assume that the first claim occurs in the 17^th policy year for him and lasts to policy year 25 (consistent with an Alzheimer’s claim) then in policy year 22, a second claim occurs and lasts 3 years (consistent with an “average” claim).

So, in this scenario, regardless of whether a limited duration/pool of money or lifetime benefit, each of them will producer the same benefits for 7 years paying $1,440,857 in benefits for the couple.  That is a pretty significant amount of money provided for extended healthcare.  Unless, the claim(s) are not average.

Remember, in this scenario, both are alive in year 24 (they will be 87) and they will both be receiving benefits for a couple more years.  The longer they live the more it will cost and the more the policy will pay.  So, looking at year 24, while both are on claim, the amount of benefit paid for the longest claim will have eclipsed the total pool of benefits available in the limited duration/pool of money scenario.

Now, let’s add a wrinkle to this.  The annual premium for the pool of money strategy is: $31,540.  The annual premium for the unlimited pool of money strategy is: $37,180.  Over the 17 years between when the policy is issued and the first claim begins, the difference in premium for an unlimited pool is $95,880.  Remember, with Asset Care, premiums are waived when a claim occurs.

In year 22, when both are on claim, the monthly benefits from the policy are $19,161 per insured.  That equates to an annual benefit for the couple for one year of $459,862.  And remember, it will only get continue to grow because this represents the first year of the second claim.

I’m willing to bet that some of you absolutely hate what I shared and how I ran the scenario. If you don’t like the parameters for this scenario, all you have to do is change them in the consumer presentation. Make it work the way that you want.  In this particular scenario, I am using my grandparents claims scenario to illustrate the duration of time. While the cost of care is not the same as what happened in my family, the circumstances are very real.

Want to learn more?  There are resources available to help you learn more. This link to our Asset Care Consumer Presentation Resource Page will lead you to a quick “how to” video (which we recommend you to review) along with other helpful resources.  Remember, the report can be delivered and used in more than one format.  To remind you, it can be a static printed report or a static .pdf report or an interactive presentation that can be accessed via url. 

The consumer presentation is unique to the client and the illustration for that client.

Please, if you have questions – contact my internal Justin Fox directly at justinfox.isp@oneamerica.com or (844) 658-3725.

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Here is another shameless plug for the million dollar annuity strategy. If you have clients who are over 75 and own annuities, they can secure long term care insurance by simply rolling those monies into a PPA compliant annuity and receive the money out of that annuity tax-free when it is used for long term care services.   Learn more about it at  https://fridayswithfisher.com/million-dollar-annuity/. 

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