As seen in the August 2011 edition of “The Register” from Tyrone Clark and Senior Business Development Advisor Joseph Clark:
Ultimate Tools to Longevity Risk Planning
Attention: Advisors and Attorneys, there is a new tool within the niche market of Medicaid and Aid & Attendance Veterans Benefits Planning. The era of the single premium life is back, thanks to the new and improved features, which help the most vulnerable of clients — the widowed individual. As we know, our single clients tend to be the most challenged and also the most common because of extended life expectancies that are a result of the enhanced medical technology of the times that we live in. The new average life expectancy for females is now age 85, up from age 81, and males are making it to age 81, up from age 78; according to the new 2001Commissioners Standard Ordinary Mortality (CSO) tables that calculate insurance rates for new policies.
This niche is set to become the Holy Grail for Medicaid & Veteran Benefit planners who are seeking answers to the complex strategy of qualifying the single client for entitlement benefits, due to the challenges presented by the extended look back period of any transfers 
done within five years. The Deficit Reduction Act (DRA) has made it a bit challenging and limited for these clients. It is a well-known fact that the US population is aging, and as a result, many of financial and estate planning techniques that have been used for years need to be revisited and revised. It has been estimated that 80% of women outlive their husbands by 7 to 10 years as widows. The sad reality is that the financial advisors or “Safe Money” advisors, whatever they portray themselves as, have unfortunately not addressed the true risks to the pre-retired community. These risks are the direct economic impact to the client for the enormous cost of healthcare and catastrophic illness expenses that are costing families and spouses their life savings!
Case Study: Ethel, who is 85 years old and for years has been living independently, now needs full-time nursing home care and plans to apply for the Medicaid program benefits to help cover the new cost of her care. She has $100K in CDs and Savings that she had planned to leave to her daughter, Kim, age 52, and to her son, Mark, age 55, to help cover her grandchildrens’ education expenses. Under Medicaid rules, Ethel would need to spend the $100K, completely depleting the legacy she has worked hard to create. The usage of the single premium whole life insurance policy would name Kim and Mark as the rider beneficiaries. Since Kim has three daughters and Mark has one son, Ethel wants the death benefit to be paid out to Kim and Mark in a ten year payout at 75% to Kim and 25% to Mark. Ethel also designates Kim as the policy beneficiary to receive $1,000 in lump sum death benefit. Kim would receive a monthly income for ten years of $619.00 and Mark would receive a monthly income of $265.33.
The new era of single premium life product is intended to provide a limited guaranteed death benefit and cash value that meets the Medicaid rule standards to fully exempt assets in order to qualify for government entitlement benefits. By the use of this type of SPL Whole Life policy, there is no underwriting requirement or any type of physical in order to qualify, because it is a guaranteed issue life insurance policy. Utilizing this type of life insurance, our clients can still maintain “peace of mind” from the enormous expenses of LTC costs and offer guaranteed death benefits for their family. These are two things in life that are certain — catastrophic illness/nursing home spend down and death.
As a Senior Business Development Advisor with BCA Marketing, I strongly believe it’s a ripe time to implement this new life insurance product. With this product, if our clients live another 30 years, they know that they can leave their legacy to their children and grandchildren while also protecting their hard earned assets from the costs of long term care.
