Three main choices for long-term care insurance.
In this episode, I'm going to address.
Which type of long-term care insurance is best?
Get ready, I'm going to introduce one to you that you probably have not heard about before.
So, my name is Doug Andrew and I've been helping people optimize their financial assets now
for more than 47 years and in doing that most people come to me wanting to save the best
way for the golden years of their retirement and I actually show them that traditional
account's like IRAs and 401ks maybe be a good way to go.
But they are far cry from the best way to go.
Roth IRAs and 401ks may be a better way to go but I never owned an IRA and 401k and I
never will.
I never owned a Roth IRA and 401k and I never will.
So then they wanna know where do I recommend people put money or they put their money and
I show them where I would 40-60% of your retirement income.
Not even show up on your 1040 tax return when you go to use it and they go, "How does that
work?".
It's basically a max-funded tax advantage insurance contract where you're are taking
the least amount of insurance benefit you can get away with under IRS guidelines based
upon your age and gender and you're putting in the most money.
The most premium the IRS allows as fast as they allow and you're doing that primarily
for living benefits.
So, in other episodes on this channel you'll see that people can suck away 10,000 a year,
100,000 a year, 1 million a year and it accumulates tax-free under section72(e) of the internal
revenue code and when they go access the money and you don't wait till your 59 and a half.
I have people retiring in their 30s and 40s.
They access the money tax-free and you can learn that every million dollars that you
accumulate can generate 80, 90, 100 thousand dollars a year of tax-free income for as long
as you live if you structure it correctly and when you pass away it blossoms in value.
If I die right now every million and my laser fund would blossom to about 2 and a half million
and transfer tax-free to my wife, my kids, my grandkids if I die.
Well, if you maximum fund that you can self insure and that's what I told most of my clients.
You don't need to buy long-term care insurance unless you're really worried about it and
have an extra policy for that.
But if you don't ever need the benefits the money is down the drain You actually have
access to your money over to a max-funded insurance contract.
Well, there's a new option that I come aware of and have been introduced lately by companies
such as pacific life.
So, I wanna show you the three types that you can choose from and why you may wanna
consider what is called an asset-based long-term care insurance strategy.
Here we go.
So, here on the screen are some illustrations compliments of pacific life and the common
long-term care insurance types today are traditional long-term care insurance and again, this is
design to pay for some of those expenses.
If you have to go to a facility for a long time and there's certain qualifications you
cant perform at least 2 out of 6 basic functions that human usually can do.
And so, we have to qualify for long-term care.
The problem is if you use traditional long-term care insurance you have to use professional
services that you cannot stay at home and have a family members or friends takes care
of you.
You have to use the professional people to do that.
Most of this plans are based upon what is called reimbursement.
So, they reimbursed you for your expenses if they qualify.
Sometimes you have indemnity and that's where an insurance company will indemnify.
Will pay you and made a reduce amount.
But you can use your friends and family to take care of yourself.
But a lot of long-term care insurance does not allow that whereas this do coz you have
those choices.
Now, let's go over to number three, that's the life insurance that I talk about earlier.
For many of my clients they may have started out sucking away $500 a month and they did
it for 30 years.
They now have a million dollars of tax free cash accumulation in their life insurance
contract.
That million dollars can generate 80-100 thousand a year tax-free income, But if they had a
catashtopic illness and a long-term care need they can go deep into 100, 200, 300, 400 thousand
of that cash tax free inside of insurance policy.
But if they do then its gonna reduce that down and it could affect the death benefit.
But they're self-insuring.
They have the money and it saves the premiums they have to pay for the rest of their life
under a traditional long term care policy.
So this is life insurance or some life insurance policies have an accelerated death benefit.
Meaning, if you had a million dollar death benefit and you have a long-term care need
and you prove that to the insurance company.
They can give you access maybe up to half of your death benefit.
In this case if you have a million dollar you can access up to half a million dollars
of that death benefit without dying and you use it to pay for those expenses.
But then the remaining death benefit has been reduced down.
But that way you can utilize the death benefit or the cash values using strategy number three.
What strategy number two is what is called an asset based long-term care insurance and
this is where we have found that many people have money.
That they have [inaudible] for those kinds of expenses and its sitting at some bank or
credit union and its earning a pathetic rate of return usually less than 1%.
They have 100,000 or 200,000 sitting there and I'll say, "What's that for?", "It's like
a rainy day fund in case I need it for long-term care", well I go, yeah.
So, when you look at the situation you're not having to say this premiums for even though
the long term care insurance is there to pay for those cost or what have you.
You at least don't sit there and pay premiums the rest of your life and then you're self
ensuring.
So, depending on whether you use it or not this could be a better way than the traditional
approach.
If you are using the accelerated death benefit rider like I say.
Then sometimes you're lowering down the death benefit.
But when you use an asset-based you're repositioning money.
You're taking money from the bank and credit union lets say and its over here earning amazingly
1%.
Lets say a100,000 or 200,000 and you're moving from your left hand packet so to speak to
the right hand pocket.
It's stays in your balance sheet it is an asset.
You can grab the money anytime you want.
You're just moving it out from the bank or credit union over to an insurance company.
But frankly, its usually rated 5 or 6 notches higher in safety than the banks are.
This is how it works.
You move the money over to the insurance company you just did it in lump sum.
You can access that money if you need to.
You can cancel and just withdraw.
If you die, you still leave behind the 100,000 like you would in the bank.
So, whats the advantage?
What if you need to have access to that money for expenses.
If it's sitting on the bank or credit union.
You can only access whats in there, 100,000.
Once it's gone, it's gone.
With asset based long-term care.
You're able to immediately have up 200, 300, 400 thousand dollars of benefits and the older
you get it can go up to 6 and 7 hundred thousands of benefits by having that asset based long-term
care.
If you never use it you get 100% refund of the 100,000.
If you die, you still leave behind 100,000.
Whereas the traditional long-term care its gone.
Out of the three this is the one that I think many people ought to strongly consider.
Who are already self insuring.
They already have money to bank or credit union [inaudible] for those long-term care
needs and sort of rainy day fund.
Just move it from this pocket over this pocket.
It still shows up as an asset on your balance sheet.
You can still grabe the money if you need it.
If you die it still transfer to your heirs and if you happen to need long-term care it
will pay out as much as 3, 4, 5, 6 hundred thousand dollars for the 100,000 if you left
it to bank or credit union.
Its gone after you doubled up that 100,000.
Does that make sense?
Sometimes people say, "It's too good to be true", if you wanna learn more join as for
an educational webinar.
What I would like to do is gift you a copy of my most recent best selling book called
the laser fund.
Now, the laser fund is actually what I have helped many clients accumulate a lot of money
and tax-free to self insure.
But some savvy people reposition money out of the bank or credit union.
They may leverage money out of the insurance policy and put over here.
So that if they have a long term care need they need will be able to able to leverage
and end up with 3, 4, 5 times the amount and benefits.
But still, keep that as an asset on your balance sheet.
So, this is what I want you to do.
I want you to go to laserfund.com and claim your free copy of my book.
You'll then entered to our database and I'll notify you everytime we teach an educational
webinar.
We do on long-term care once a month and I don't want you to miss out.
They usually last about 30-45 mins.
We follow it up about 15 mins of live Q&A and you will be able to learn which of this
3 options may be best for you.
So that you can utilize and optimize your assets and of course, minimize tax and this
is why I would recommend many people consider this one because they never heard it before.
This one would be the next choice or maybe even first choice for many of you.
But frankly, I have never ever help a client get this one.
Sometimes, I pointed them to an advisor who sold this but I never wanna own it for myself
and I do not like recommending things to people that I don't put my own money into it.
That is my personal opinion and in a particular situation I have never worried about having
to have this money paid on insurance policy and I have nothing for it if I don't need
it because I'm trying to take care of myself.
But in case some things happen I have money over here or now with this strategy that will
be far better in my opinion that most of this types of policies.
So, go to laserfund.com and contribute a nominal amount towards shipping and handling and I'll
cover the rest of that cost and I'll fire out a copy of this 300-page book to you called
the laser fund.
How to diversify and create the foundation for a tax-free retirement and this vehicle
will see will satisfy this third choice for many people.
But if you want to leverage and be able to have access to maybe 2, 3, 4, 5 hundred thousand
of benefits by simply repositioning assets that are underperforming or non performing
in a bank or credit union.
You will be in our database and notify when we teach you an educational webinar.
We do several all kinds of topics.
But go to laserfund.com I'll fire out a copy for you and here is to you brighter future.