“Money isn’t the most important thing in life, but it’s reasonably close to oxygen on the “gotta have it” scale.” Zig Ziglar

So I asked my clients, “which would you prefer; a plan that has a 70% chance of success or one that has a 90% chance of success?” We had been discussing how to invest their money for the best results. He had about $1million in financial assets; and as we discussed their needs, we established income goals, money for emergencies and a minimum target for a legacy when all was said and done. The Legacy part was not their primary concern but it was clear that whatever it turned out to be, “more” would be preferable to “less”.

So I worked up a couple of plans for them to consider. All would provide about the same income with allowances for inflation. The first was a well-constructed portfolio containing bonds, stocks and alternative income investments. Aside from some liquidity risk, it was quite sound with a respectable chance of success to age 95 and beyond, without having to invade the “emergency accounts” for additional income.

The second consisted of all liquid securities, lowering that liquidity risk with a higher amount of potential volatility. Neither one included a Legacy figure that could be accurately defined……just that there would still be money in the portfolio at age 95. It could be a lot, could be not-as-much. Unfortunately, there are no guarantees.

The third included a $275k survivor life policy and a modest annuity that would provide tax favored income to cover their mortgage and basic living expenses and guarantee to pay it for life. This one had a 100% guarantee of a specific level of monthly income for life resulting in a greater chance that income from the remainder of the portfolio would last as long as they needed it to. Plus, a 100% chance that if Long Term Care insurance was needed, either or both of them could collect $5,500/per month for as long as they lived to help pay the cost; or their heirs would collect at least a $¼million legacy.

I explained to them that they don’t need to put in the life insurance, but this approach would provide better predictable security. To achieve better results without it would be a task I am willing to take on, but certainly cannot guarantee.

The Insurance Industry Continues to Innovate

There is a whole new era in product design coming now. I’ve been selling life and heatlh insurance for over 37 years now, for the past five years with the specific purpose to pay for long-term care. Wwe now have products that will also pay benefits for major illness’ like heart attacks, cancer, etc. (Critical Care), convalescent care (called Chronic Care) and Terminal illness….at no extra cost. This is another reason why you should be reviewing all of your life insurance plans. Make sure you get the most out of the money you allocate to your plans. Call us and we can help.