Because everyone is living longer, many life insurance companies have found traditional long-term care (LTC) policies are not profitable enough.
Several years ago, MetLife and Prudential stopped selling these policies, and they were joined recently by John Hancock, which increased the premiums for existing policies. Genworth still offers new policies, but it has increased the premiums for existing and new policies. Other companies are still selling traditional policies, but premiums are generally guaranteed for one year only, and can be increased if the insurance company gets your state insurance commissioner's approval.
How many times have you heard that what you don’t know can’t hurt you? Actually, what you don’t know can hurt you – just ask any taxpayer who has tried to persuade the IRS not to hold them accountable for an error on their tax return because they didn’t realize it was an error.
Clients who don’t realize life insurance can be leveraged for tax diversification in a retirement plan may suffer negative financial impacts due to what they don’t know. Although many permanent life insurance policies can help diversify a retirement plan, innovation in index universal life (IUL) insurance has brought about the potential to provide protection, supplemental retirement income and long-term wealth accumulation, typically with no tax penalties on properly structured distributions at any age.
While politicians and the public ponder our national health-care policy, under our current system the Affordable Care Act requires that people get health-care coverage, either through their work, individually through insurers or through state-run health-care exchanges. This year, the open enrollment deadline is Feb. 15 for people who want to secure coverage through the health exchanges and related insurers.
Retirement income planning can be like hitting a moving target in the wind. The target keeps moving because you do not know when you will retire, how much money you will need, or how long you will live. The wind is there because there is not an exact straight line path to get to your retirement target as laws will change, interest rates will go up and down, financial markets will rise and fall, and a variety of uncertain risks could impact your plan. One specific risk that can derail a retirement plan is long-term care. While most retirees will need some long-term care during their lives, it is hard to determine how much care one will need, how expensive the care will be, and how to fund this unknown cost.
The financial advice industry faced some significant headwinds in 2016 from the rise of competition from robo-advisers to the historic expansion of regulation under the Department of Labor's fiduciary rule. Although the economic and public policy outlook is murky, thanks to the largely unexpected victory of president-elect Donald Trump, 2017 could be the year that holistic retirement planning becomes the norm.