Almost every one of the clients over age 65 are primarily concerned about 2 things: Running out of money before they run out of breath, and needing extended care with no means other than liquidation of assets to pay for it.
We find that many of these people have their “safe money’ in a number of instruments including CD’s Bonds (Muni, Government Corporate), Treasuries, Annuities. However we know that most of these vehicles other than Municipal Bonds (Which could be subject to AMT and or State taxes) are taxable as ordinary income. Some times that same person is concerned about taking more income because of the taxation. Most people are not concerned about estate taxes today due to the temporarily high exemption. But, all of the above assets are included in one’s estate.
So to start a conversation with a prospect above who may fit this description:
“If there is a way that we can increase your after tax return on your safe money, guarantee that income for as long as you live protect the money from care institutions and then transfer it completely tax free to your desired heirs can we do business?”
There is not one product that can do all of the above. But a solution with the combination of 2 products the sum of the parts accomplishes a lot more than one product. This is the “Insured Asset Conversion Trust”.
Let’s show examples:
Example 1: A 70 year-old male Connecticut resident with $250,000 in Municipal Bonds, no estate tax problem, standard health (not preferred). Is concerned about getting highest after tax income on that money, and after taking all that money leaving to his 2 children that sum.
The second example shows the same age person that is interested in income the rest of their life and thus the policy replacing the asset is also a lifetime pay. We have the ability of making that new policy a cash value policy that allows for tax free distributions if desired. Like the other example the asset is protected with a chronic care rider.
The third example is for the same person who doesn’t need the income and wants the most to go to their heirs. We made this a 10 pay as well and it has lots of cash if needed to draw out income if needed later.
As you can readily see, a combination of 2 contracts can accomplish a lot more than one with our senior population. If you focus on guaranteed income and protection from care and distributing the proceeds tax free to heirs, they are interested. The Insured Asset Conversion Trust could be the ticket on your next client!