Linked Benefit: The Practical Way to Plan for Real Risks
How good are your odds?
%
70% of Americans age 65 or older will need some form of extended care 91% chance that at least one partner in a couple will need extended care
Is this how you want to use up your assets? Range of Cost for One Year*
Current Costs
2050 Costs
Private room at a nursing home
$68k - $167k
$175k - $430k
Semi-private room at a nursing home
$57k - $158k
$147k - $407k
Assisted living facility
$41k - $71k
$106k - $183k
Home health aide at 44 hours/week
$50k - $76k
$129k - $196k
How would you pay for a bill this big?
2050 Costs*
Anticipated cost of a 3-year stay in a private nursing home
$525k - $1.3 Million
* “What Care Costs� Survey. Published 4/2019 https://whatcarecosts.com/Lincoln
800-343-7772 | LTC@bsmg.net | www.bsmg.net 500 South Main Street, Providence, RI 02903
FOR BROKER USE ONLY
Here’s how to explain the benefits and costs of a linked benefit solution. Cash Strong Client: Age 65 / $100,000 single pay / 3% compound inflation Product
Reimbursement Product
Cash Idemnity Product
Initial LTC Pool Age 80 Pool
$418,289 / $651,681
$368,439 / $574,015
Initial LTC Monthly Benefit Age 80
$5,389 / $8,396
$4,747 / $7,395
Age 80 IRR
10.7%
10.3%
Payout Style
Reimbursement*
Cash Indemnity**
Elimination Period
0 days
90 calendar days
Age 80 Death Benefit (Less Claims)
$129,333
$113,919
Minimum Residual Death Benefit
$6,466
$10,000
ROP Option
80% day 1
100% after 5 years
*Once claim is approved, the company will cover qualifying expenses related to client’s care up to full monthly maximum. **Once claim is approved, the company will send client check for full monthly maximum, regardless of expenses.
Cushion Your Assets with a Linked Benefit Solution Self-insure Your assets remain conservatively invested and grow at 3% per year. You need to invest more conservatively in case you need liquidity to pay for a long-term health event.
100% Managed Assets What’s at risk to client in event of $500,000 claim
AGE: 65 / $500k
Growth of Managed Assets AGE: 80 / $797k
If you never need care, your total useable assets at age 80 is still 20% greater.
Purchase Linked Benefit Product - 80% of your assets remain invested as they are and grow at 5% per year. You can invest more aggressively, knowing that you are insured against a long-term health event. - 20% are allocated to a Linked Benefit policy where the tax-free value increases by a multiple of 6.
80% Managed Assets
The total of assets and potential Linked Benefit payouts is 84% greater at age 80, using the tax-free Linked Benefit payouts to cover long-term care costs without having to touch your managed portfolio.
20%
Linked Benefit
AGE: 65 / $400k
What’s at risk to client in event of $500,000 claim $100k
Growth of Managed Assets $832k AGE: 80 / $1.43 million
Would you like tips for how to present these features? Contact us today at 800-343-7772 and ask for a Linked Benefit specialist or email LTC@bsmg.net.
Linked Benefit: Laying Out Your Best Case You can easily calm concerns and focus on the upside with a Linked Benefit solution.
The Old Story
“You should have long-term care insurance to cover your costs if you ever need nursing home care.”
The Barrier…
I think we have enough money to handle extended care on our own.
The New Story
“I have a smart way for you to protect your assets, whether you need extended care or not.”
…and how you overcome it Today, the median cost of a private room in a nursing home is around $100,000 a year. Experts predict that the cost of an average-length stay in a nursing home will soon exceed $800,000. How would that affect your retirement plans or the financial security of your spouse? Are you comfortable with drawing down the assets you’ve set aside for your legacy? My advice is to protect your assets from being drained by costly care.
My mother had an LTC policy and passed away before it paid a penny.
Linked Benefit lets you avoid that. In your mother’s case, her beneficiaries would have received a death benefit equal to 100% of her premiums.
I’ve heard that insurers keep jacking up premiums for LTC coverage.
That won’t happen to you with Linked Benefit. The premiums that you agree to with the carrier will be 100% guaranteed. The insurer cannot and will not increase them.
But I’d want to get the care I need at home if at all possible.
That’s another reason I want you to look at a Linked Benefit policy. It can cover a home health aide that can currently cost around $50,000 a year or more. If you never set foot in a “nursing home,” this plan can still cover extended care costs.
My kids or other family members would take care of me.
I’m sure they’d want to, and they still can. But that comes at a cost too. 75% of family-member caregivers forfeit income to handle the tasks that often take 20 hours a week or more. You should also consider that their jobs, their geographic location, and their own age and health are some of the reasons they may not be able to help provide care – no matter how much they want to.
I’d rather rely on Medicare or Medicaid.
What if I change my mind and decide to cancel?
Medicaid requires that all of your other financial resources be used up before you can qualify and even then, it applies almost exclusively to skilled nursing facilities. Medicare is medical insurance and requires you to meet very strict criteria to cover care for a maximum of 100 days in a skilled nursing facility. It doesn’t provide any help if you want to stay home. Many of the plans I might recommend have money back guarantees that allow you to recover 100% of paid premiums if you haven’t made any claims.
I’m healthy and I expect to stay that way.
Good! That’s one reason I’m not recommending old-school long-term care insurance. It only pays off if you need care. I’m more optimistic than that. The Linked Benefit idea I have for you has a life insurance component that guarantees your named beneficiary will get at least everything you put into the contract back at death.
I’m not comfortable talking about long-term care.
I understand. It’s not a fun topic, and we don’t have to spend time imagining why you might need extended care. I want you to focus on the potential financial impact it could have…and how we can avoid that risk.
FOR BROKER USE ONLY
Our goal is to help you turn a tough topic into an easy sale. You can count on our in-house specialists, dedicated sales team and case managers to assist with every step of the selling process from case design and client consultation to underwriting and ultimately closing the sale.
BSMG partners with these carriers to deliver linked benefit solutions
We’ll evaluate products and coordinate with you, your clients, and our carrier partners to engineer personalized solutions.
In consultation with you, we’ll tailor a Linked Benefit solution to match any client’s specific needs and financial situation.
Our team of on-staff underwriters and case managers will quarterback the client screening, application, and underwriting process.
On request, we’ll be happy to speak with you and your clients over the phone or in person.
If you’d like to offer a client seminar, we can help with that too.
Your clients need to hear about Linked Benefit solutions. Talk to us…and we’ll help you talk to them! Contact us today at 800-343-7772 and ask for a Linked Benefit specialist or email LTC@bsmg.net.
800-343-7772 | LTC@bsmg.net | www.bsmg.net 500 South Main Street, Providence, RI 02903
Linked Benefit: A 100% Improvement for Your Clients…and You
How to avoid a tough talk with your clients about long-term care. Long-term care insurance (LTCi) is a difficult and touchy subject. Nobody’s eager to chat about lingering illness or life in a nursing home. LTCi premiums have a reputation for ratcheting up, and there are plenty of stories about how the policies fall short of covering future costs. Then it gets even better when you explain to your clients that if they are fortunate enough to never need such care, all of those premiums are gone for good. It’s not exactly the feel-good view of the future that you want to deliver. And yet, a strategy for handling extended care is in your clients’ best interest. If you are committed to doing the good and right thing for your clients, it’s a topic you need to address. You can prevent a crisis if you find the right way to have this conversation. More than 70% of Americans over age 65 require some form of care as they age. Over the next 25 years, the cost of an average length of stay in a private nursing home is expected to reach $840,000 or so – more than enough to sap even the best-managed assets with frightening speed. It’s a much easier conversation than you ever imagined. A Linked Benefit option can completely change the tone of any conversation about extended care and BSMG is here to help. • Your clients can get a lifetime guaranteed death benefit that’s 100% income tax free if they never need LTC services. • Premiums are 100% guaranteed. Some products offer a 100% money back guarantee for all paid premiums. • Benefits can go far beyond “nursing home insurance” to pay for adult day care, assisted living, home healthcare, hospice, or even informal care.
The Old
Story
“You should have long-term care insurance to cover your costs if you ever need nursing home care.”
The New
Story
“I have a smart way for you to protect your assets, whether you need extended care or not.”
800-343-7772 | LTC@bsmg.net | www.bsmg.net 500 South Main Street, Providence, RI 02903
FOR BROKER USE ONLY
Linked Benefit shifts the conversation to safer ground. When you talk about a Linked Benefit solution, you have an opportunity to help your clients plan for a spectrum of futures – from a healthy, active existence, to a not-so-unusual life with an occasional challenge, to circumstances that might call for expensive, extended care. You offer wisdom…asset protection…peace of mind…and an option that pays real benefits no matter how life unfolds. That’s the kind of conversation you want to have with your clients.
Offer a powerful risk-management strategy. The basic Linked Benefit concept provides significant advantages that cancel out the risks and objections you may have encountered with LTCi.
Protect the legacy of a lifetime. This solution has unequaled power to prevent the rapid depletion of assets if expensive extended care is required. It’s a critical step in protecting the continued financial welfare of a spouse. It is also an essential tool to minimize impact on your plans to create a legacy for family members and institutions. Assure proper care if or when needed. Contrary to old-school “nursing home insurance,” this coverage can pay for a variety of modern care models such as adult day care or the services of a home-based aide. It does, of course, also apply to the costs of full-time care facilities and assisted living. Preserve 100% of premium value. If your client never needs extended care, the full value of premiums will be paid as a death benefit that will be 100% income-tax free. Even if some care benefits are claimed, if they do not equal the value of premiums the balance may be payable as a death benefit. Lock in a money back guarantee. Some products guarantee to return 100% of all paid premiums if your client chooses to end the coverage before making any claims. Avoid premium inflation. Premiums are 100% guaranteed not to rise from the time the policy is established.
Dread the long-term care conversation? Turn it into a positive and productive opportunity. Contact us today at 800-343-7772 and ask for a Linked Benefit specialist or email LTC@bsmg.net.