Even though it is looming large in Americans’ lives, no one wants to talk about it. That’s why we call it the Pink Elephant. Have you truly prepared your finances to handle the skyrocketing costs of health care?
Consider these staggering statistics:
- The number of Americans aged 65 and older will more than double by 2040 to 81 million from 40 million in 2010.
- In the 50 years, up through 2009, national health expenditures increased from 4.7% to 17.3% of US GDP.
- With baby boomers just now starting to retire, this number is expected to increase to 19.5% of our GDP by 2019!
- More than 50% of all Medicaid spending was due to Long Term Care related expenses.
- Medicaid spending for Long Term Care on the disabled and elderly is expected to rise to $3.7 Trillion in the next 20 years.
- In recent years inflation for LTC has been running at twice the rate of the Consumer Price Index.
Now in 2011 and 2012 we are having serious budgetary issues…
CLASS, which stood for Community Living Assistance Services and Supports, was a pet project of the late Democratic Sen. Edward Kennedy. It was supposed to help Americans pay the cost of long-term care. Recently however, Health and Human Services Secretary Kathleen Sebelius admitted that there is no way CLASS can work. "Despite our best analytical efforts, I do not see a viable path forward for CLASS implementation at this time," Sebelius wrote in a letter to Congress.
With the demise of CLASS and the recent enactment of the Pension Protection Act (PPA) and Deficit Reduction Act, the federal government is sending clear signals that consumers need to fund for their own long term medical care. This is easier said than done considering that stand alone Long Term Care providers are dramatically increasing their premiums, and only a small percent of new applicants are approved. In fact, John Hancock Financial recently filed to raise premiums on their long term care policies by 40%. Genworth Financial announced an 8 – 12% increase.
According to the NY Times, 70% of Americans over 65 will require some LTC assistance. And while long term care expenses and the pending doom of Medicare and Medicaid funding is often listed as retirees' number one concern, the vast majority of Americans do not have any long term care coverage at all. The most common reasons: #1) the costs, which are going higher and #2) they worry that if they should be fortunate enough to never trigger the long term care provisions of the policy all of their premiums are lost forever.
Ask yourself these important questions?
- If you needed long-term care today how would you pay for it?
- Which assets would you cash in first to pay for long term care?
- What would be the tax consequences of liquidating those assets prematurely?
- How would a lingering long term medical condition affect those close to you?
- What would it do to your estate? What would be left for your family?
What's The Solution?
After personally witnessing the devasting affects long term care illnesses can have on my own father's lifesavings during his 7 year bout with Alzheimer's, I determined to make it my mission to help my clients avoid the same long term care traps that our family experienced. Trying to be the responsible son, in 1988, I bought Dad what at the time was one of the best stand alone long term care policies money could buy. For years I diligently paid his premiums knowing that for him to be covered he needed to check into a nursing home. Something, under the circumstnaces, my mother wouldn't allow.
In 2005 my dad peacefully passed away after only being in an assisted living facility for one week, not a nursing home. Even though I had paid all those premiums through the years and my father was suffering from Alzheimer's, his long term care benefits were never triggered and his policy didn't pay out a dime.
With all the resources and creative minds in the insurance industry I couldn't help but think there had to be a better alternative. I am pleased to tell you that I have uncovered a gem in the world of Long Term Care protection.
This program is so unique that it has an exclusive US Patent. No other company can offer anything its’ equal.
Joint Life Long Term Care Combo Plan (JLLTC)
Let me briefly introduce the highlights of this one-of-a-kind Asset Based Care Strategy, and after I do, if you would like to receive a personalized illustration and information packet, just pick up the phone and call our office toll free 1-888-892-1102 and we’ll send it to you immediately:
It combines a single deposit joint life insurance benefit with a joint long term care policy, making it perfect for married couples. If you never use the plan for long term care expenses, the exploded joint life insurance benefit passes tax-free to your family.
- It is provided by a thriving AM Best rated A+ carrier with an impeccable balance sheet.
- Because of an exclusive U.S. Patent, the carrier offering this plan is the only company in America that can offer Joint Life and LTC coverage in the same policy.
- Both you and your spouse can draw down the LTC benefit at the same time.
- It’s a joint life policy so the life insurance benefit pays after the passing of the surviving spouse.
- You can structure it to provide more LTC and less Life Insurance.
- You can even design it to pay a LIFETIME LTC BENEFIT.
Here’s how the Joint Life Long Term Care Plan (JLLTC) works:
A couple, both age 70 have enough assets and income to take care of themselves for the rest of their lives should things go as planned. However, they are concerned that the exorbitant costs of Long Term Care could throw them a curve ball and consume their assets, ultimately leaving nothing for their children/grandchildren and possibly forcing them to go on Medicaid – that is if it is still around when they need it!
They elect to transfer a deposit of $100,000 into the JLLTC Asset Based Care Strategy and choose upfront one of three LTC monthly withdrawal rate percentages: 2%, 3% or 4%. Because the $100,000 deposit will instantly create a tax-free life insurance benefit of $176,884 selecting:
- 2% will create a tax-free monthly LTC benefit of $3,538 for 50 months.
- 3% will create a tax-free monthly LTC benefit of $5,183 for 33 months.
- 4% will create a tax-free monthly LTC benefit of $6,848 for 25 months.
Should either of them trigger the LTC benefit by not being able to perform 2 of the 6 Activities of Daily Living or have cognitive impairment such as dementia or Alzheimer’s they can pull it from the life insurance benefit. If they never use the LTC benefit their family would receive $176,884 tax free!
I should point out that 100% of their deposit is always available should they ever decide to liquidate the account because of an unforeseen cash liquidity need.
Often our clients are concerned that the maximum benefit period of 50 months may not be sufficient even though the average life expectancy of an individual who cannot perform 2 of the ADLs is 2.3 years. An optional benefit with the JLLTC known as the Continuation of Benefit Rider (COB) answers that fear. For a small fee, the COB rider provides an unlimited guaranteed lifetime Tax-Free monthly LTC Benefit for either spouse.
Assuming the same 70 year old couple deposits $100,000 into JLLTC and selects the COB rider, their joint life insurance benefit will be $150,903. The LTC benefit will settle in at $3,018 per month. The key provision the COB rider creates is that should either or both of them ever trigger the LTC benefit they will receive the $3,018 per month for life……guaranteed and income tax-free! If they never use the LTC benefit the life insurance benefit of $150,903 will go to their family. Their $100,000 deposit transfer gives them peace of mind, it provides a tax-free monthly LTC benefit and creates an increased estate….immediately and guaranteed.
JLLTC is designed for non-qualified deposits. If however, your assets are tied up in qualified accounts, like an IRA, you can choose from alternative plan that is virtually identical with the exception that the deposits are spread out over 20 years.
In my opinion the key to Asset Based Care Plans is that your initial deposit is never lost. The account balance, which is always equal to or greater than your deposit, is a bon a fide asset that you list on your balance sheet. With JLLTC you have full liquidity from day one. And then if you never trigger the LTC benefit, which is everyone’s goal in life, a guaranteed exploded tax-free life insurance benefit passes to your beneficiaries. The Joint Life Long Term Care Asset Based Care Strategy is not a use it or lose it proposition like traditional LTC insurance.
Where else can you place some of your investable assets and receive these kinds of benefits? There is nothing like it anywhere. $100,000 in a CD, money market account or even a mutual fund is worth $100,000, nothing more. With JLLTC you have so much more, and definitely more peace of mind.
ACTION ITEM: You need to pick up the phone right now, call my office and request your personalized illustration and information packet. And then you need to submit an application to see if you can qualify. No medical exams are required so applying is actually very easy. Don’t hesitate, call us right now while you are thinking about it, 1-888-892-1102 or complete the JLLTC request page here.