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Secure your retirement future Managing the financial risk of long-term care Name Title Date LFD0603-0385.

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Presentation on theme: "Secure your retirement future Managing the financial risk of long-term care Name Title Date LFD0603-0385."— Presentation transcript:

1 Secure your retirement future Managing the financial risk of long-term care Name Title Date LFD

2 ©2006 Lincoln National Corporation LFD MG / A 11/06 Protect your retirement income Few things matter more than your retirement assets. Protect them against the threat of long-term care.

3 ©2006 Lincoln National Corporation LFD MG / A 11/06 Managing assets in retirement Variable expenses Fixed expensesWealth transfer Healthcare expenses Emergency/opportunity funds

4 ©2006 Lincoln National Corporation LFD MG / A 11/06 What if the balance is destroyed? Variable expenses Fixed expensesWealth transfer Healthcare expenses Emergency/opportunity funds

5 ©2006 Lincoln National Corporation LFD MG / A 11/06 Agenda Understanding the facts of long-term care How would you pay for it? How MoneyGuard ® Reserve can offer one simple solution

6 ©2006 Lincoln National Corporation LFD MG / A 11/06 Chances are, youll need care Source: Americans Fail to Act on Long-Term Care Protection, The American Society on Aging, May Chance of needing long-term care after age 65

7 ©2006 Lincoln National Corporation LFD MG / A 11/06 HourDayMonthYear Basic assisted living $60$1,800$21,600 Nursing home $194$5,833$70,000 Full-time home care $18$432$12,960$155,520 What does long-term care cost? National average costs of long-term care Source: Congressional Budget Office Testimony, The Cost and Financing of Long-Term Care Services before the Subcommittee on Health Committee on Energy and Commerce, U.S. House of Representatives, April 27, Who would pay for it if you needed long-term care?

8 ©2006 Lincoln National Corporation LFD MG / A 11/06 What you cant rely on Medicare acute care only Medicaid must spend down assets

9 ©2006 Lincoln National Corporation LFD MG / A 11/06 How to cover long-term care costs Its up to you. You have three choices: Pay Reposition Self-insure

10 ©2006 Lincoln National Corporation LFD MG / A 11/06 Advantages Most policies cover all levels of care Guaranteed benefits Disadvantages Premiums you pay may be expensive Premiums may increase Recurring premium payments You typically dont get your money back Traditional long-term care insurance

11 ©2006 Lincoln National Corporation LFD MG / A 11/06 Self-insuring Advantages You dont pay for coverage you may never use You maintain control Disadvantages You must set aside significant liquid assets You may deplete assets too quickly

12 ©2006 Lincoln National Corporation LFD MG / A 11/06 How to cover long-term care costs If youre not doing anything, youre self-insuring.

13 ©2006 Lincoln National Corporation LFD MG / A 11/06 Now you can reposition with MoneyGuard ® Reserve MoneyGuard ® Reserve, a universal life insurance policy, is a smart way to cover long-term care costs. It makes sense for today and tomorrow.

14 ©2006 Lincoln National Corporation LFD MG / A 11/06 Designated for long-term care costs One simple solution Life insurance House Cash reserves Investments MoneyGuard ® Reserve While the actual proportions in this chart will differ based on a specific investors needs, it does show the different types of assets in a typical retirement-oriented portfolio.

15 ©2006 Lincoln National Corporation LFD MG / A 11/06 If you need long-term care Life insurance House Cash reserves Investments MoneyGuard ® Reserve Up to 500% with MoneyGuard ® Reserve Long-term care reimbursements are income tax-free under IRC Section 104(a)(3).

16 ©2006 Lincoln National Corporation LFD MG / A 11/06 If you need it back Take it back; its in your reserve. Life insurance House Cash reserves Investments MoneyGuard ® Reserve premium is returned Up to 500% with MoneyGuard ® Reserve

17 ©2006 Lincoln National Corporation LFD MG / A 11/06 If you never need long-term care Unused portion goes to your beneficiary income tax-free. Life insurance House Cash reserves Investments MoneyGuard ® Reserve death benefit Beneficiaries receive an income tax-free death benefit under IRC Section 101(a)(1).

18 ©2006 Lincoln National Corporation LFD MG / A 11/06 Long-term care coverage You need the full benefits of MoneyGuard ® Reserve 1 Reimbursement for long-term care up to $499,218 income tax-free This example is based on a 65-year-old, nonsmoking female in good health with a $100,000 single premium for a policy with the two-year Convalescent Care Benefits Rider (CCBR), the four-year Extension of Benefits Rider (EOBR), and the Return of Premium Rider (ROPR). Benefit amounts vary by age, gender (except in Montana, where male premiums apply), and health status. Benefits are adjusted for loans and withdrawals and may have tax implications. Long-term care reimbursements are income tax-free under IRC Section 104(a)(3). 3 possibilities 1 You need the full benefits of MoneyGuard ® 2 You change your mind 3 You die

19 ©2006 Lincoln National Corporation LFD MG / A 11/06 3 possibilities 1 You need the full benefits of MoneyGuard ® 2 You change your mind 3 You die Money back guarantee You change your mind 2 This example is based on a 65-year-old, nonsmoking female in good health with a $100,000 single premium for a policy with the two-year Convalescent Care Benefits Rider (CCBR), the four-year Extension of Benefits Rider (EOBR), and the Return of Premium Rider (ROPR). Benefit amounts vary by age, gender (except in Montana, where male premiums apply), and health status. Benefits are adjusted for loans and withdrawals. A portion of the amount returned may have tax implications. 1 You need the full benefits of MoneyGuard ® 2 You change your mind

20 ©2006 Lincoln National Corporation LFD MG / A 11/06 3 possibilities 1 You need the full benefits of MoneyGuard ® 2 You change your mind 3 All three outcomes are guaranteed Income tax-free death benefit You never need long-term care 3 This example is based on a 65-year-old, nonsmoking female in good health with a $100,000 single premium for a policy with the two-year Convalescent Care Benefits Rider (CCBR), the four-year Extension of Benefits Rider (EOBR), and the Return of Premium Rider (ROPR). Benefit amounts vary by age, gender (except in Montana, where male premiums apply), and health status. Beneficiaries receive death benefits income tax-free under IRC Section 101(a)(1). Guarantees are backed by the claims-paying ability of The Lincoln National Life Insurance Company. 2 You change your mind 3 You never need long-term care 1 You need the full benefits of MoneyGuard ® 2 You change your mind 3 You never need long-term care

21 ©2006 Lincoln National Corporation LFD MG / A 11/06 Nancy Arneau Age 65 Lets look at Nancy Arneau Good health, nonsmoker Decided against traditional long-term care insurance Currently self-insuring Wants to protect her retirement income Hypothetical example only. Benefit amounts vary by age, gender (except in Montana, where male premiums apply), and health status.

22 ©2006 Lincoln National Corporation LFD MG / A 11/06 Repositioning assets Hypothetical example only. Benefit amounts vary by age, gender (except in Montana, where male premiums apply), and health status. $300,000 Set aside for long-term care costs $200,000 Freed up for retirement $100,000 Repositioned for MoneyGuard payment Up to $499,218 Death benefit or long-term care benefit $166,406 $332,812 Additional long-term care benefit Benefits are adjusted for loans and withdrawals and may have tax implications. Long-term care reimbursements are income tax-free under IRC Section 104(a)(3). Beneficiaries receive death benefits income tax-free under IRC Section 101(a)(1).

23 ©2006 Lincoln National Corporation LFD MG / A 11/06 Three outcomes all guaranteed This example is based on a 65-year-old, nonsmoking female in good health with a $100,000 single premium for a policy with the two-year Convalescent Care Benefits Rider (CCBR), the four-year Extension of Benefits Rider (EOBR), and the Return of Premium Rider (ROPR). Benefit amounts vary by age, gender (except in Montana, where male premiums apply), and health status. Benefits are adjusted for loans and withdrawals and may have tax implications. Long-term care reimbursements are income tax-free under IRC Section 104(a)(3). Beneficiaries receive death benefits income tax-free under IRC Section 101(a)(1). 1 You need the full benefits of MoneyGuard ® Reserve 2 You change your mind 3 You never need long-term care

24 ©2006 Lincoln National Corporation LFD MG / A 11/06 What you should know about MoneyGuard ® Reserve Covers qualified long-term care costs. Includes a money back guarantee. Helps you leave money to loved ones. Helps you maintain control of assets. Protects assets now and in the future.

25 ©2006 Lincoln National Corporation LFD MG / A 11/06 Which option fits your strategy? Government programs Traditional long-term care insurance Self-insuring MoneyGuard ® Reserve

26 ©2006 Lincoln National Corporation LFD MG / A 11/06 The challenge of long-term care Do you have enough assets set aside for long-term care? Do you have access to assets? If you dont need long-term care, what happens to the assets?

27 ©2006 Lincoln National Corporation LFD MG / A 11/06 Retirement income security MoneyGuard ® Reserve helps you leverage dollars available for long-term care costs. MoneyGuard Reserve offers a money back guarantee. MoneyGuard Reserve offers efficient transfer to your heirs.

28 ©2006 Lincoln National Corporation LFD MG / A 11/06 Next steps Talk with your financial advisor or insurance agent. Be sure youre protecting your retirement income.

29 ©2006 Lincoln National Corporation LFD MG / A 11/06 Important disclosures MoneyGuard ® Reserve is a universal life insurance policy with a rider that accelerates the specified amount of death benefit to pay for covered long-term care expenses. An Extension of Benefits Rider (EOBR) is available to continue long-term care benefit payments after the entire specified amount of death benefit has been paid. The Return of Premium Rider (ROPR) is included at issue (single premium only). The cost for these riders will be deducted from the policy account value. Guarantees are backed by the claims-paying ability of the issuer and are subject to policy terms and conditions. This policy has exclusions and/or limitations. Two-year suicide and contestability provisions apply (one-year in some states). This material was prepared to support the promotion and marketing of a universal life insurance product. Lincoln Financial Group ® affiliates, their distributors, and their respective employees, representatives, and/or insurance agents do not provide tax, accounting, or legal advice. Any tax statements contained herein were not intended or written to be used, and cannot be used, for the purpose of avoiding U.S. federal, state, or local tax penalties. Please consult your own independent advisor as to any tax, accounting, or legal statements made herein. MoneyGuard Reserve is issued on policy form LN850 (8/05), Return of Premium Rider on form LR850 (8/05), Convalescent Care Benefits Rider on form LR851 (8/05), and Extension of Benefits Rider on form LR852 (8/05) and state variations by The Lincoln National Life Insurance Company, Fort Wayne, IN. Products and features are subject to state availability. Not for use in MA or NY. Lincoln Financial Group is the marketing name for Lincoln National Corporation and its affiliates.


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