Retirement isn't just about having enough money.

It's also about protecting the people you love and preparing for the possibility that you may someday need care for yourself.

If you’re planning your retirement, there are 3 (at least!) things you need to think about:

1.      How do I create enough income and assets to support retirement?

2.      How do I provide for my family if I pass away?

3.      How do I take care of myself if I or my spouse can’t take care of me?

It sounds too good to be true but there is a solution and it’s a particular type of Life Insurance.  The Policy that can do the following: 

1.      Builds cash value with high asset growth potential and protection from market downturns.

2.      Provides a Life Insurance death benefit to take help care of my family

3.      Provides a Long-Term Care benefit to provide Home Care, Assisted Living or a Nursing facility

Most people assume they need separate solutions for each of these concerns. But In some cases, a properly designed life insurance policy can help address all three and simplify your planning.

As you may know, Whole Life insurance policies have been around “forever”.   Long Term Care Insurance (LTCi) as we know it, has been around since the 1980s.  The combination of Whole Life with LTCi started in the 1990s and became a widely accepted and popular combination.

There is a more recent development, however.  In the early 2000s, LTCi riders and Chronic Care riders started to be offered on Index Universal Life (IUL) Policies.  Now, many of the more conservative Insurance Carriers are starting to offer this combination.

Why does this matter?

Index Universal Life (IUL) offers more substantial returns that are tied to Mutual Fund earnings without the risk of market downturns.   Additionally the LTC riders are tied to the death benefit and the LTC benefit is guaranteed.

Standard Whole Life policies provide a cash account where a portion of your premium is deposited. That account earns compound interest a fixed rate.  You have access to borrow or take loans from the account.  

With IUL policies you have the same cash account but you have the ability to choose how your cash account premium earns interest.  The Policy uses the mutual fund(s) you choose and the policy pays interest indexed to the value of the fund.  So, for instance, if the fund values go up 10%, your account does the same.   There are fees, of course, but the nice part is that the cash account value never decreases.  The return is 0% (instead of -10% for instance)

Additionally, you can withdraw from the Policy – tax deferred – or take tax free loans from the policy.

So, an IUL Policy with an LTC or Chronic Illness Rider is how all three Retirement objectives can be achieved:

1.      Builds cash value with high asset growth potential and protection from market downturns – IUL Cash Account growth can be aggressive or conservative

2.      Provides a Life Insurance death benefit to take help care of my family – Check!

3.      Provides a guaranteed Long-Term Care benefit to provide Home Care, Assisted Living or a Nursing facility.

I hope this article is enlightening.  If you’d like to ask questions of any kind or get more specific with a quote or policy description, please let me know.