THE PROBLEM
Melissa is 55 years old, married, and in good health. Like many Americans, she is going to have to withdraw money from a traditional IRA account she inherited from her parents, pay income taxes on the withdrawals, and close the IRA account after 10 years per the SECURE Act. She has decided to withdraw $50,000 per year for a net after-tax amount remaining of $36,500 annually.
One of Melissa’s biggest concerns is potentially needing long-term care someday and not having the funds to pay for it, so she contacted her financial advisor, one of Quantum’s partners. The advisor consulted with the experienced life staff at Quantum, and together we reviewed multiple options from various life insurance carriers. A product was found that could efficiently leverage her dollars for long-term care by nearly 800%.
THE SOLUTION
Carrier: Lincoln Financial Group
Product: Guaranteed Universal Life
Premium: $100,000 ($10,000 x 10 years)
After working with her financial advisor, Melissa opted to use $10,000 per year for 10 years to purchase a guaranteed universal life policy. (She will still have $26,500 to invest elsewhere.) Here are some of the policy features, guaranteed by contract and the financial strength of the insurance carrier:
- Melissa’s money is still liquid. For instance, the walk-away money when she is 76 is $222,948, and will continue to grow until she passes away or the contract expires when she is 120 years old.
- If Melissa passes away before using any benefits, her policy’s direct beneficiaries receive $354,488. For most people, and in this particular example, the death benefit is tax- and probate-free to policy beneficiaries.
- If Melissa does need long-term care, her guaranteed LTC amounts continue to grow up to age 120. For example, at age 76, if she needs long-term care, Melissa’s guaranteed LTC pool amount is $891,793, or $13,306 per month until the amount is depleted in approximately 67 months. (According to Genworth, the average cost of care for a semi-private room in a nursing facility is $8,669.)
- Even after all the LTC money is depleted, there is a residual death benefit amount of $5,000 for policy beneficiaries. All for a total premium amount of $100,000!
It’s easy to find out if your client could benefit from a leveraged long-term care policy. In fact, we have options and strategies for many client needs. Whether you are a current Quantum partner or considering a partnership with us, call your Quantum Life Insurance Consultant at 800.440.1088 today.
Nate has 15-plus years of life insurance distribution experience, and he is knowledgeable in both annuity and life insurance strategies. As part of the life team, he helps evaluate the ins and outs of hundreds of policies so they can recommend the best fit for an individual’s financial plan.
