How Many Assets to Self-insure?

[Nikita]

I am working with a married couple who is considering purchasing LTC. Male is 64, and wife is 59 (60 next month.) Their current income is $85,000 which includes alot of investment income. They currently have about 1.5 million in liquid assets. When wife's mother passes away, she will inherit another 1.5 million.

They also will both be collecting social security. They aren't sure whether they have enough assets to self-insure their LTC. Does anyone know a tool where I can run some analysis for them?

Thanks!

 

[DHK]

Check out this one:

Professional Financial Planning Software for Financial Advisors

 

[Mr_Ed]

I am working with a married couple who is considering purchasing LTC. Male is 64, and wife is 59 (60 next month.) Their current income is $85,000 which includes alot of investment income. They currently have about 1.5 million in liquid assets. When wife's mother passes away, she will inherit another 1.5 million.

They also will both be collecting social security. They aren't sure whether they have enough assets to self-insure their LTC. Does anyone know a tool where I can run some analysis for them?

Thanks!

why don't they self-insure their homeowner's insurance?

 

[CALTCAgent]

They currently have about 1.5 million in liquid assets.

When you say liquid, what is the interest rate?

 

[ltcadviser]

By definition, everyone who does not transfer a risk is self-insuring. Whether they can afford to do so, or not. I have a client with assets of 11 million that just bought a policy this week. Everyone can self insure. The key is to work with clients that do not wish to self insure. By the way, it is not your job to sell them on not self insuring. I just would recommend finding people that want to transfer the risk.

 

[scagnt83]

By definition, everyone who does not transfer a risk is self-insuring. Whether they can afford to do so, or not. I have a client with assets of 11 million that just bought a policy this week. Everyone can self insure. The key is to work with clients that do not wish to self insure. By the way, it is not your job to sell them on not self insuring. I just would recommend finding people that want to transfer the risk.

I agree. It is a lot easier (and a hell of a lot more profitable) to focus your energy on people who are interested vs. people who are not.

 

[somarco]

Everyone can self insure. The key is to work with clients that do not wish to self insure. By the way, it is not your job to sell them on not self insuring. I just would recommend finding people that want to transfer the risk.

Good advice, no matter which product you are offering.

 

[Nikita]

When you say liquid, what is the interest rate?

All I know at this point is that most of their $85000 in annual income comes from his investments.

 

[VolAgent]

All I know at this point is that most of their $85000 in annual income comes from his investments.

Why are you trying to give free advice on a topic for which you lack knowledge? You have no idea if they can financially self-insure nor do you have the knowledge to figure it out. Finally, even if you figure it out, it does nothing for you. Are they going to pay you a fee if you tell them, "Nope, you're good."

As ltcadvisor said, instead of trying to work for free in an area you lack knowledge, why not focus on prospects who are interested in transferring the risk? That way when you solve their problem, you also get paid.

 

[CALTCAgent]

All I know at this point is that most of their $85000 in annual income comes from his investments.

You need more information.

Do they need that 85K for income?

Is it important to maintain their lifestyle ?