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Who will need it and for how long, how much it will cost, the state of the long-term care insurance marketplace, and the toll on caregivers.

If there’s a single unsolved problem in the retirement plans for many middle and upper-middle-income adults, it’s what to do about long-term care costs later in life.

Very high-income, high-net-worth people can plan to self-fund long-term care costs, though I’d advise them to do the math on long-term care cost inflation before getting too comfy with the idea that they’ll have enough to do so. Meanwhile, people without significant financial assets will need to rely on Medicaid-provided long-term care. That’s most people: Medicaid and other government programs cover the majority of the long-term care costs in the U.S.

Sandwiched in the middle are people with some, even significant, financial assets–just not necessarily enough to comfortably fund a $300,000 (or more) long-term care outlay at the end of their lives. For them, the choices are stark and rather unappealing. They could purchase traditional long-term care insurance and risk premium hikes. Alternatively, they could purchase one of the increasingly popular hybrid life/long-term care products and face an opportunity cost, as discussed here. Or they could forego insurance altogether, planning to self-fund care or use nonportfolio assets, such as a home sale, to cover any long-term care costs.

If you’re among the people who are still on the fence about what to do, the best way to make smart decisions is to go into the process armed with the facts. How likely are you to need long-term care and for how long? What does long-term care cost, and what does it cost to insure against it?

Click here to view the 75 Must-Know Statistics About Long-Term Care

Originally published August 20, 2018, on Morningstar

“Another loose cannon in the current lexicon of confusing popular buzzwords. Living benefits began with the first cash value policy where the consumer could access their own “investment” component while still “living.” It’s history is also littered with the bodies of any benefit that took place before the death of the primary insured from accident benefits to children’s term.

Where the confusion begins to set in is the conceptual relationship with terminal illness allowances. Just for the record: The idea of present valuing an imminent death has been around from the beginning; conversations about immediate need where the inevitable was crystal clear were entertained and facilitated at home offices. Now comes the chicken and the egg conundrum as to where the fuel for viatical vs terminal illness allowances interact. Both companies and private resources understood that a short duration between a terminal health condition and the sure and certain knowledge that remaining premiums would be paid, and a death benefit would therefore also be paid, allowed for private accommodations. All that is being suggested is that the idea of funds remaining in the building may have helped fuel this dramatic expansion of accelerated death benefits aka living benefits. Although terminal illness payments may affect Medicaid and SSI benefits, they are generally viewed as a tax-free death benefit.”

Click here to read more, originally published in the August 2019 edition of Broker World Magazine.

My partner and I have certainly earned the title of Long Term Care Insurance “Road Warrior.” We are beginning yet another educational crusade this Summer. For more than 20 years we have walked to the front of the room to rally the troops. Live training always works best and our passion for helping to solve the Care Conundrum whips us once again to the pulpit. Over the next six months we will set up our revival tent in most major metropolitan areas. Our detractors, of which there are a few, will simply suggest that the circus is coming to town. We will not be deterred.

It has been suggested that I have been giving the same speech, or for that matter writing the same column, all these years. I cannot speak for my partner, but I will freely and openly admit that is absolutely correct. I have now many hundreds of times asked only one consistent and repetitive question: “Why in the hell can’t we get this right?”

Click here to read more, originally published in the July 2019 edition of Broker World Magazine.

June Xplained: Webinar This Week PLUS It’s Life Settlement Awareness Month

Upcoming Webinar: Understanding LifeCare Xchange®
Thursday, June 13
10 to 10:30 a.m. PDT  | 12 to 12:30 p.m. CDT  |  1 to 1:30 p.m. EDT

This webinar serves as a primer to effectively add the service of life settlements into practice as a potential new profit center. You will learn how to do this with ease through GWG Life’s LifeCare Xchange® program.

REGISTER FOR WEBINAR

June is Life Settlement Awareness Month: Develop a New Profit Center in your Practice

The insurance industry just isn’t what it used to be. Thriving in today’s market requires adaptability, responsiveness, and creativity. Advisors know they need to add innovative solutions to their toolbox as market conditions continue to evolve at a rapid pace. Those able to identify and harness market opportunities put themselves in the enviable position of creating new profit centers for their business.

When was the last time you were offered the keys to a new market? One such market opportunity has emerged that serves critical financial needs across generational lines of both seniors and Baby Boomers. This market is accessed with no cost for advisors or consumers by monetizing a life insurance asset the consumer already owns through a life settlement.

Many seniors own life insurance policies that, after years of making premium payments, they will lapse or surrender without realizing their policy is actually an asset that has secondary market value. Unfortunately, too few policy owners understand this fact, and as many as 9 out of 10 universal life insurance policies will be abandoned before paying out a death benefit. For the senior market, this opens up a significant market opportunity: according to a Conning and Company study, $185 billion of death benefit is owned by seniors on an annual basis that could be exchanged in the secondary market for a new living benefit or cash instead of being lapsed or surrendered.

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VIDEO: What is the Evolution Of The Life Insurance Secondary Market?

This video provides a brief overview of the historical background of the life insurance secondary market and how policy holders can use their life insurance policies as an asset with living benefits.

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