Avoid The Portfolio Killer

By | Life Insurance, LTC Insurance, What's Trending | No Comments

Did you know that married couples retiring at age 65 will average $260,000 in healthcare costs? Even more will be needed if a chronic illness care is required! This makes healthcare the second largest expense in retirement.

Many clients’ portfolios are not prepared for the impact of a long-term care need. Instead of carving out a sliver of assets to cover this event, many Financial Advisors will watch their clients’ portfolios dwindle as they spend down those investments year after year to pay for long-term care expenses.

Let’s look at an example:

An FA in Pittsburgh had a client with sizable nest egg worth around 2 million. The FA never thought about covering this client in the event of a long-term care need, as the client had enough assets to “self-insure” if the situation came up.  Fast forward several years. The client was diagnosed with dementia and was confined to a nursing home for over 12 years. The client’s children were forced to spend down over $1.5 million dollars. Not only were the heirs out $300,000 per child, but the advisor lost their potential investment too. When the client passed away, her children took what little assets were left in her portfolio and moved them to another FA, their trust in the first advisor having been destroyed. Don’t be this advisor!

If the FA had simply suggested the client carve out a sliver of their assets to purchase the LTC rider, the clients’ portfolio may not have been depleted. The beneficiaries’ trust would have stayed with the FA, and their assets could have gone to the FA too!

Resources

Long Term Care Benefits vs. Chronic Illness Benefits

By | Life Insurance, LTC Insurance | No Comments


Did you know that an average couple that retires at age 65 today should expect to spend, on average, $220,000 for out-of-pocket medical expenses during their retirement years?  AIG created an informative marketing piece that provides an in-depth look at the Long Term Care vs. Chronic Illness Riders available to help supplement those expenses.

Long Term Care Benefits vs. Chronic Illness Benefits

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