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October 24, 2020 8:30 am
Hans and Robby go over a specific long term care policy. They also discuss why long term care is so personal to both of them.
Don’t forget to get your copy of “The Complete Cardinal Guide to Planning for and Living in Retirement” on Amazon or on CardinalGuide.com for free!
You can contact Hans and Cardinal by emailing email@example.com or calling 919-535-8261. Learn more at CardinalGuide.com.
Hello this is Matt slick from the match lick live podcast right defend the Christian faith and lay out our foundation of the truth of God's word chosen Truth Network podcasts of starting in just a few seconds.
Enjoy it, share it, but most of all, thank you for listening and for choosing The Truth Podcast Network. This is the Truth Network welcome to finishing well brought to you by Cardinal guy.certified financial planner longs a child, best-selling author and financial planner helping families finish well for over 40 years of finishing well will examine both biblical and practical knowledge to assist families in finishing well, including discussions on managing Medicare IRA long-term care life insurance and investments and taxes. Now let's get started. Finishing well welcome to finishing well certified financial planner and Charlotte I know you're not excited about today's subject's dreams and we do mean streams of income and no thing I love about that is it. You might be familiar with Jesus with a woman on the well, and I want my all-time favorite favorite stories. Here comes Jesus wonderful good Jewish boy needs talk to the Samaritan woman, whatever that begin with, but then she's got all kinds of shenanigans are live so I can come to relate her. She's had numerous husband Mandan. She's kind of a hard woman and she doesn't exactly even treat Jesus with a great deal of respect. If you look at the start. However, when put to it. Jesus apparently knows that there's a good heartless woman and he says if you knew who was talking to know you wouldn't thirst because you'd have streams of living water and the beautiful thing about that is if you think about this woman was changed completely to the point that she went out with those dreams living water. What was given to her what was invest when Jesus invested into her right. He made an investment, and then it came back to him numerous times as you might be aware, she went and told half the town write about this man that that she knew to be her Savior. So while we are talking about streams of income you know like I I just love the concept of all my goodness. Jesus made this investment in me, and how many people do I get to tell and and share my living water that has meant so much. Another thing about living water this because I love the topic and let me government is that in Hebrew the word for fountain is the same word is the word I like and I and and if you put that and I decide to ponder things like this, like the prophet Jeremiah was the weeping prophet in your eyes that were told have enzymes and that they are in fact living water, and when someone comes to price like if you read the rest progress when Christian comes to Christ there at the cross. What is he do he cries and cries and cries and cries may be experienced at or maybe you're just going on the road one day and you heard a song and you just had to pull over the side of the road and get rid of some that living water, and as you did that and worship it in others, to streams that are there in a an available that Christians seem at the time. I don't know if you like me back a lot of dear friends of the Christiansen they cry a lot more than other people and I'm convinced it's living water on justice and so when we started talk about the streams of income. His return about income in retirement. You know, wouldn't it be cool that that are building on the rock like we talked about it in a few weeks ago and preparing for the storms in life that there would be streams, not just for this generation, but for generations to come in a based on what God blessed us with. Yeah, just today's topic is were talking about setting up a stream of income is available to you really at the end of your life, possibly for years. At the end of your life if you need to pay somebody to carry, which is long-term care and so last week we talked about using qualified money or IRA money to buy a long-term care policy and that actually is a great alternative, especially if IRA money is pretty much all you got in terms of a lump of money but ideally this hybrid long-term care which is which is life insurance, long-term care insurance. Many times paid for with one premium or 10 premiums over 10 years. It has a limited timeframe to pay the premium yet it's best set up with with nonqualified money or with money that is that you've Artie pay taxes right centered review a little bit for that nonqualified means it wouldn't qualify as retirement income, so it's not IRA center 401(k) Sakharov IRA so this money is just like your regular income money in the bank money in the bank money, you know, for me paying a premium on my policy is really talking about what I've put in place for my wife and me today. It's it's money. We've Artie pay taxes on it.
It's actually that's easier thing to do is we don't have to write two policies will have to deal with the taxes on the premiums and on other birds and we also are not have to deal with taxes on the payout so so. However, this policy which is primarily long-term care but it's also life insurance. However, it pays out its benefits, whether that's in long-term care benefits for me or for my wife. Both of us. That's can be tax-free if we don't use it for long-term care or we don't use it much for long-term care there's gonna be a $300,000 death benefit. This can be paid out to our kids under is a life insurance policy and that's tax-free as well so after tax money going in. Hopefully many years of no premiums because it can be paid up in two years so total of 10 years, but after tax money going in a bunch years with no premiums and then a few years or several years with tax-free long-term care benefits coming out and then ultimately a tax-free death benefit and the second one of the spouses way yeah I didn't know that the quick and easy math is important in 100 or so when you get back 300 but your point and then a couple decades before. It's possible that you may use it but will yeah and and if we actually use different long-term care but working is much as $1 million long-term care benefits if they're used for that in their use for a long time and potentially used by both of us. This thing could payout $1 million down the road so that substantial benefits but that's true. The regular long-term care policies as well as if you actually used it for what it was intended and you needed the care you are to receive way more than you paid into as opposed to the person that never uses it in there and get paid essentially nothing out of the thing and all the premiums you can grab an expense that I met and that to me. That was I found wonderfully, enlightening as you described that had you bought a traditional long-term healthcare policy and you make and what $1000 month print premiums but I am okay so Fontana thousand dollars a month for long-term care policy of the size and I paid in 10 years I've essentially spent that hundred and $20,000 right and that that money is gone forever. It's it's meant not in this policy right if it was a traditional long-term care, but it wouldn't be $1000 a month I could get the same benefits most likely for five 600 bucks a month on a traditional long-term care policy so so I could effectively pay half just guessing that that's pretty close.
So this is much more expensive but you're guaranteed to get more out of this with you using for long-term care.
I actually will be getting life insurance benefits when kids will write right my estate will nicely want to make it sound that the cool thing is is that clearly you still have this from what you show me understatement. You put the money and it still right there you get to where yeah this is eight years in so so what in eight years $12,000 euros. $96,000 and it shows that I've got an accumulated value of 92,817 51. So I got just about as much cash values are paying premium and utility of selling the deal with. I have coverage for the whole time and I just need to pay two more years of premium and I pay two more years of premium thousand a month I'll be 64 years old and I'm just done. I should be 62 and we won't be retired yet, God willing, was when you said you have, whatever. So it's really double coverage because knowing it covered for long-term healthcare network, home healthcare, which were hoping for, but you're also carried there's also the death benefit so you you did. You had both that you would've had a few data traditional long-term care policy where yeah the death benefit is $300,000 and it won't payout until both of us are gone.
So if we were both killed in an accident or something. Then what were still reasonably young. Then there is a $300,000 death benefit will be paid out to the kids. Another scenario would be that maybe I would use this for a short period of time, 10, 15 years from now maybe six months or something and then pass away there be a little damp that death benefit is whatever they paid me for long-term care would ultimately be deducted from death benefit and then Rhonda lives on for a long time and maybe she didn't use it all. She uses it a little bit and we each use 50,000 different points in time and then she dies, then the death benefit will be 300,000. It'll be $200 because it's going to deduct whatever long-term care benefits.
And another scenario would be I would use a lot and I would use it, you know, for several years and collect benefits and then die and then she would live on. And then she would use a lot exceeding the 300,000 because I just said that this is an extension writer benefit on any could payout six, seven, $800,000 of million dollars to both of us so there would be no payment to her children there be no life insurance benefit because it would've all been expanded and more so were not really counting on. This is our only life insurance.
It's more about added benefit to our state that makes this a wise investment is right today show streams of income which has to do with retirement income. You'll find Johanson's book the complete cargo guide to planning for living in retirement all firstname.lastname@example.org which biotech article cargo guide.com is it's got all the podcasts of all these previous shows it's got access to PDFs of all the chapters of his book, but also you know you can just email Hansson telling me to talk.
As we begin the plan to build your finishing well ideas out on the time out on the rocks of we come back more on streams of income.
Hans and I would love to take our show on the road to your church, Sunday school, Christian or civic group. Here's a chance for you to advance the kingdom through financial resources and leveraging Hahn's expertise and qualified charitable contributions veterans aid and attendance IRA Social Security care and long-term care. Just go to cargo guide.com and contact Tom to schedule a live recording of finishing well your church, civic group, contact Tom Cardinal guide.com that's Cardinal guide.com welcome back to finishing well, a certified financial planner, Hahn's child today show streams of income and course retirement strings of income and on the later parts of our life. In the evening on into the next generation and we been talking about this hybrid long-term care policy life insurance policy is really cool to me that you know I know in some long-term healthcare policies. The premiums can go up and things change within the policy distance locked in on this is guaranteed everything about every number was put forth is guaranteed not change the rest my life from eight years ago I bought. So I bought this plan right after Dr. Bob came to client so impressed with this company and really this is the second policy that I wrote with his company was on myself and that's one of the first things I love about it is I premiums were high but they stopped after 10 years so you know when I'm 64 and my wife and 62 were done paying premiums for the rest of your life so if were lucky and we don't start using this thing till were in her 80s and were probably going use this time when the bought if I didn't think that pretty good chance that one or both of us are going to use it to be intentionally twenty-year. Were not sending them any money, and then absented us any money, but this thing is just sitting there. It's inflating its conflation elements of the benefits are going up long-term care benefits are going up every year. The 5% and then all of a sudden you start to use it and they can't send us a premium increase her premium change or benefit change or file.
I mean it's just as beautiful and so it's it's investing month by month hundred $20,000 over 10 years from 54 to 64. Essentially, till 2022 and then hopefully a period of nothing for a good long time. The Lord may have other things in mind for me but that being an insurance man. Six. You stranger things have happened, but just to have this all paid up before I'm even retired is wonderful and you know III bought a pretty large policy here is you you know you might be listening, and you might be saying you know I don't have $1000 a month to thickened this well who knows covers two people and we could we cut a cupcake. About half of this policy would still have a substantial benefit, it would look somewhat like about what were offering people so you know you could be substantially less. Another thing I want to talk about is for those of you that have some money in the bank and you've got a CD here, you got an investment you got some nonqualified money and I did have that at the time but I just wasn't willing to part with it or to commit it all to an insurance policy but I could've paid in the very beginning about the $85,000 in one premium I could about the same policy years and then I just be done correct okay right and the other cool thing about it is this particular policy. You don't have to be like a health giant now. In fact, this company has. I think it's six or seven versions of the same thing so another words the extension writer on it is pretty much the same on all seven of what is right and I got an extension writer means is you.
Given these companies a hunk of money, and all their agreeing to do is if you need long-term care which can give your money back to so I want to go to the other side of this and just say this is a big deal, just that it surfaces not that big of a risk by giving him 85 grand.
Another way to put it is I've given them 96 grand day. You know, if I started using home healthcare tomorrow and I used it for three months and they sent me know. 18 grand. They still haven't given me 96 and so so so what they're doing on the front end of the claim or the first year or two or three users.
Given your own money back there giving your death benefit early if you happen to die within there giving a substantial benefit gazettes can be a lot more than what you paid in unless you die when you're 90 something, then you know like I do and they looked like you live that on. Then you have the interest on the money toward an extension writer is is after they get done given back your own money in your essentially out of money and benefits now just Pure insurance to pay for long-term care and Dr. Bob's policies a lifetime. So does she get into the extension writer. You can outlive mine is not lifetime. It's 100 months. Mine is like eight years. If I had to do it all over wisher about lifetime and you can buy that from this company. Now when you talked about the people in poor health. If you're in very poor health for me. You know like they're in there is some level where you can't qualify for this. So there are some conditions in some situations, like me.
Now that you qualify for this coming week. We have people that had cancer and they were cleared six months ago. Maybe they had surgery eight months ago. They had two months of chemo three treatments and they been six months now treatments they can buy a version of this that doesn't have the life insurance hundreds is simply an annuity and an extension writer and annuity that grows and they can take 100,000 or hundred and 50,000 of either IRA money or nonqualified money like to talk about put in here that covers long-term care for two and half years for two people. So another words you use up your own mind first and then the extension writer kicks in and it will pay if you want to for life. People in their 70s we write a lot of those, policies were there just there leveraging their money saying look I have this amount of money saved that I could use for long-term care but is gonna run out pretty quick. If I have to spend my own money so they move it to this company. They still got the pot of money. There they can get it if they needed to leave it there if they need care. They're going use their own money first when their own money runs out and the extension writer kicks in and in the reinsurance company is paying a stream of income leader for the rest your life or for so many years and there's a lot of different ways to go but we can deal with people with health conditions and he knows my mild body jelly that I used to work with you Sally say no Johnny he's this fellow. He's bad sick You know if you're bad sick you can still we still have some things we can do for you to set up some insurance to get you benefits right which one of those is short-term that what you home healthcare policies like I have in years is really got a couple years of benefits.
If we structure the care properly so yours is still pretty substantial work were actually offering selling more of those type than we are.
This time, this is the hardest product that we have the cell and onwards of all the different things that we do for people, including selling life insurance insuring their lifespan annuities and Medicare just all the different insurance products.
Investment products reassure people raise some objections people hide from possible. Just the conversation is difficult enough painful enough that only 11% of the people are like you and me that have long-term care only 11% have is from a government study that are just was reading, which means 89% don't write and you know that's in large part because I think number. I never would've wanted to look down the road and say G Ellen I looked down the road. My dad's life. I didn't want to think well yeah some point in time he's gonna need care. We sure did, I wouldn't want to think that my mother's life. Oh yeah she sure did, and what kind of planning you now do we really have this in my dad was a 35 year insurance.
He brought me in the business. This product was invented about when he retired he think I could sell the spam.
I think it now.
No way. I mean, he just I even when he was partially sick, you know, or he wasn't the stroke by your before he died, but even shorter that I have an alternative form which is a short term care policy that I was going to pay the premium. All you need to do is assign he wouldn't do it for nothing.
I'm just telling you that after he passed away about a month after that I bought my mom long-term care insurance and I paid the premium and after about a year to see she just insisted on paying the premium just people.
People here where the stuff is they do, including my dad interest in all I can speculate why that is, is it's the hardest thing to come to Chuck.
People know they going to die and they know their family is going to be in a bad way and they know they need life insurance, they still get all screwy about life insurance but people feel really good when they buy they get it there and people do by with this is people really the thought of being alive and being reliant upon other people unable to care for yourself is just so threatening people that I'm just speculating and the reality is when it does happen. People are older and their generally very appreciative.
It's it it's really not as threatening as welcomed me when you're in this situation and you had a stroke like my daddy to care for. He was very appreciative. You know is sick so it's it's it's really the younger people that are looking forward need to be buying the stuff that have the different most difficult time now despite that we we saw a lot of it, and no you know were also understanding when people are just we have some people call us up. They want to hear all about it and then they want to say no. So okay just manage the rest your money and hope for the best, having had my hand in both my parents and and now my mother-in-law you know in part of finishing well for me just has to be like I want to make sure Tammy gets what she needs to make sure that my kids are put in a position where they feel like they didn't have any choice but to put me somewhere and all those kind of thing so you know we labor to you and and and your decisions, your again we got a cargo guide.com call Hans he would love to talk to about the subject in the in the in the thing about it is he knows angles. He knows ways to to create these streams with IRA money that you have to make minimum distributions work in all sorts of different ways you know if you will, interest, engagement, cargo guide.com again, go to their website and check out our podcast previous shows. We are so grateful you spend time as today. I'm finishing well thanks on thank you.
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