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BSMG Blog: Protecting the Future of Families and Businesses

Linked Benefit Products Offer Great Section 1035 Exchange Options

IRC Section 1035 provides that exchanges into life insurance or annuity contracts with Long Term Care (LTC) riders will be income tax free because these riders are treated as  LTC contracts under IRC Section 7702B(e). These Section 1035 tax free exchange provisions positively impact so-called linked benefit life insurance-LTC products and linked benefit annuity-LTC products.

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Are Your Clients Wondering About Hybrid Long Term Care Solutions? Part 2

On Monday, I talked about hybrid LTC solutions and gave you an in-depth breakdown on what these solutions are and how they are becoming increasingly popular. Today, I'll take it a step further by sharing a comparison of some of the most popular hybrid LTC options.

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Are Your Clients Wondering About Hybrid Long Term Care Solutions? Part 1

In 2017, as in-force rate increases become the norm and more and more carriers are exiting the traditional/standalone Long Term Care (LTC) space, we continue to see the trend of clients migrating from traditional LTCi to hybrid solutions.

With this recent shift, I thought it would be helpful to share an in-depth breakdown of what these solutions are. My hope is to help remove some of the barriers you may experience when having the important LTC conversation with your clients. 

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Universal Life Policy With Indemnity LTC Rider Owned By An ILIT

The use of an indemnity Long Term Care (LTC) rider is crucial to keep the life insurance death benefit estate tax free. That’s because any rider benefits will be paid only to the Irrevocable Life Insurance Trust (ILIT) as policy owner, and NOT used to pay extended care costs directly to the extended care provider. Since LTC benefit claims are paid only to the ILIT, this indemnity style LTC rider does NOT create an incident of ownership in the UL policy.

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Is retirement planning the biggest part of your job?

Have you, like other advisors, experienced the shift in job responsibilities and title from financial planner to retirement income planner? In today's society, a financial planner is synonymous with the retirement planning process. What has caused the shift in responsibilities? Many say it's not a surprising trend seeing as baby boomers are the largest generation to enter retirement years.

A recent study by the Urban Institute reported the baby boomer generation is changing the retirement game due to better health care, longer life expectancy and more financial responsibilities. The study said that men who are 65 years old are projected to live six years longer than those who turned 65 in 1970.  This generation is also working longer than previous generations. Partly due to better health, but also to afford the increased costs of living. Some adults may even benefit from more Social Security by working longer. Overall they are working longer to be able to afford their future.

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INFOGRAPHIC: WHY TO START AN LTC CONVERSATION WITH MOM

Why is the long term care conversation so important to have with Mom and the women in your life? We're sure you already know that the life expectancy of women is higher than that of men, but did you know the difference is an average of 5 years. Also, women have higher rates of disability and chronic health problems. American Association for Long Term Care Insurance reports that women represent more than two-thirds of Americans age 85 or older, and more than 70 percent of nursing home residents are women! 

The long term care conversation is gaining more and more steam. The opportunity and responsibility is now for you and your clients to have the conversation with Mom. Ask her about her health and finances to get a better understanding of what she may need later in life. There are long term care and critical illness riders to help with these costly expenses.  You and your clients can start the planning today to better protect for tomorrow.  

Share these statistics with your clients. Download the infographic below and share with your clients they to begin the conversation with their moms. 

 Learn More: Mind the Gap: Life Insurance to Last Beyond 100

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Mind the Gap: Life Insurance to Last Beyond 100

Permanent life insurance is designed to be in force for the policy holders lifetime to provide for a family and their assets. What happens when the policy owner outlives the maturity date on their policy? Things aren't like they used to be, people are living longer and life expectancies are increasing from what they were fifteen to twenty years ago.  

The World Health Organization projects the global number of centenarians to increase tenfold between 2010 and 2050.  While most life policies written today protect people until the age 121, LIMRA's data reports that nearly 6 in 10 Americans have life insurance that was purchased over 15 years ago. The problem here is that policies written before 2004 protected those insured only to an average age of 95 or 100. There is a big gap between age 95 and 121!

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Infographic: Understanding Long Term Care Costs

Are you talking to your clients about Long Term Care (LTC) and Linked Benefits? If so, great job! More than likely you have seen the positive impacts these conversations have on your business, as well as the lives of your clients. We know this to be true, which is why we are sharing client facing tools like this downloadable LTC infographic to help start the conversation with your clients. 

DOWNLOAD THE INFOGRAPHIC TO START SHARING WITH CLIENTS

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5 LTC Questions to Review with Your Clients

Do you and your clients know the odds?  The chances of an older adult having at least one chronic condition is 91%, and 73% have at least two!  

Your clients may be under the misconception that Medicare and health insurance will cover a long term illness. However, the truth is currently neither will cover the costs related to a long term illness. So, how do you begin the conversation of life insurance with long term care and critical illness riders with your clients?  Start by having them ask themselves the following 5 questions. 

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Prepare Your Divorced Clients For Long Term Care

We've all heard the scary statistic that 50% of marriages end in divorce. While that might not be completely accurate, it's still unsettling. Life insurance and retirement plans are often big points of negotiation when it comes to dividing up a marriage, but what about Long Term Care Insurance (LTCi)? 

For clients who are going through a divorce, "in sickness and in health" is now an empty promise. LTCi is vital for people who no longer have a caretaker or previous defined plan to fall back on.

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