Jack Lenenberg: Best Time to Shop Long-Term Care

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welcome to

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fun with annuities with your host me

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stan

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the annuity man america's annuity agent

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can annuities be fun

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can contractual guarantees be fun

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absolutely they can find out the brutal

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facts about annuities

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with no sales pitches or high pressure

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nonsense

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just the brutal and factual annuity

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truth which is all you need to hear

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let's have some fun with annuities and

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let's have that fun

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start right now

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[Music]

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welcome to fun with annuities i'm your

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host stan the annuity man

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america's annuity agent license in all

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50 states and this is the top

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annuity podcast on the planet today's

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topic is a very good one it's timely

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people are always calling me

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about long-term care fortunately our

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guest today is

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is arguably the top resource

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and expert in long-term care in the

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country his name is jack linenberg you

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can find him at

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ltc partner singular

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ltch

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and we'll have all of his information on

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the website my website

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but every single person for the past up

1:21
teen years that's called stan the

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annuity man

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who's the expert in annuities and they

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say well what do you think about

1:27
long-term care i mean who do you

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and every single person i send to jack

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so he's

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he's like me from the standpoint he

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tells the brutal truth he does not

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mince words he's not he's really just

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not a salesman like i'm not a salesman

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yes we do sell things

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but you know we listen to you and we try

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to apply the right

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uh contractual guarantee for your

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specific situation and we have no

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problem telling you if it doesn't fit

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so with that that introduction i want to

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welcome

1:57
jack lindenberg to the program jack

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welcome to fun with annuities

2:02
hi stan it's great to be here um

2:05
jackie jack is give us some

2:08
let's just start with the brief overview

2:10
of long-term care

2:11
but before that tell us a little bit

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about your background i'm going to give

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it away

2:16
quickly because he's a lawyer he's his

2:18
background he's got a jd

2:20
he's a lawyer long-term care but

2:23
i think that's fantastic tell us a

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little bit about yourself jack

2:27
well thank you stan i mean i yes i do

2:29
have a law degree i graduated from

2:31
boston university school of law in 1997

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but you know i i started in the

2:38
financial services arena

2:40
shortly thereafter in 1998 you know with

2:45
a broad focus

2:47
of you know estate planning life

2:49
insurance planning etc

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[Music]

2:53
but i developed a niche for long-term

2:57
care insurance contracts and

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you know so i started to focus heavily

3:03
in the long-term care insurance arena

3:05
by 2002 um

3:08
i've been an independent producer since

3:10
then

3:12
and i've been blogging and you know

3:15
writing about long-term care insurance

3:16
contracts for the

3:18
you know for the past 24 years so

3:21
see you've seen it done it and forgotten

3:23
more than most people will ever know

3:25
about long-term care

3:27
probably true yeah absolutely well and i

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like the fact that

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you only focus in that area because

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it's not a simple area there's a lot of

3:37
regulations there's a lot of

3:39
things that people need to know about

3:41
long-term care

3:43
and one of the things that i always tell

3:44
people you know annuities solve for four

3:47
things principal protection income for

3:48
life legacy

3:49
and then i say at the end the other l is

3:51
long-term care confinement care p-i-l-l

3:54
but in a perfect world um

3:57
annuities and long-term care is a

3:59
supplemental coverage

4:01
because it's not as good as traditional

4:02
long-term care

4:04
jack and i had a really good

4:05
conversation about that the other day

4:07
but

4:07
kind of take people through the product

4:11
types that are out there

4:12
the solutions that are out there and

4:14
actually the overall environment of

4:16
long-term care in the industry right now

4:19
okay well i mean you know let's first

4:23
start about

4:24
you know talk about what long-term care

4:26
insurance is at its core

4:28
i mean it's tax-free dollars that will

4:31
help uninsured should they be

4:35
chronically ill should they either need

4:37
help with two activities of daily living

4:40
or should they have a severe cognitive

4:42
impairment such as

4:44
alzheimer's or dementia and if if your

4:47
doctor certifies that you need help

4:50
with activities of daily living or that

4:52
you have a cognitive impairment

4:54
then you will be able to receive

4:56
tax-free benefits

4:58
for long-term care and

5:01
all long-term care insurance policies

5:03
that are tax

5:04
qualified that adhere to these benefit

5:07
triggers

5:09
i mean your need for care does not have

5:11
to be permanent

5:13
you know you just need your doctor to

5:14
certify that you have an expected need

5:16
for at least

5:18
90 days and so all policies

5:22
uh will adhere to this language

5:25
and you know if we're trying to fund

5:27
long-term care benefits

5:29
there's a number of of policies today

5:32
that are tax qualified contracts i mean

5:35
of course we

5:36
we have the standalone policies which

5:38
you know just like a

5:40
health insurance policy auto insurance

5:42
homeowners insurance

5:43
no cash value just you pay a premium as

5:46
you go for the rest of your life but if

5:48
you need benefits

5:50
you receive tax-free tax-free benefits

5:53
and then we also have today and these

5:55
are becoming

5:56
hugely popular um asset-based

6:00
policies also known as hybrid

6:03
policies where we're combining cash

6:06
value assets you know with

6:10
tax-free long-term care benefits should

6:12
you need care

6:13
so the asset-based policies can be

6:16
either connected to

6:18
a life insurance contract or an annuity

6:21
contract

6:21
okay you know such that if you don't

6:23
need care

6:24
the premium that you've paid into the

6:26
contract

6:27
comes back to your estate at death so

6:31
those contracts today are i mean very

6:34
popular

6:35
and the market has really moved heavily

6:38
in the past

6:39
eight years you know to the asset based

6:42
funding

6:43
approach do you think that's do you

6:46
think the reason for that is you know we

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have 10 000

6:49
uh baby boomers hitting the age of 65

6:51
every every single day

6:52
do you think it's because people have

6:54
worked so hard for their money

6:56
and they scrimped and saved and planned

6:58
and done without and now they're at this

7:00
point where they're going to plan for

7:00
long-term care

7:02
they just want to make sure that if the

7:04
money's not used it's going to go to

7:05
somebody in their family do you think

7:07
that's the main reason for that

7:09
oh it's a huge reason absolutely stan

7:12
so i think we all

7:16
we want to know that we're covered for

7:18
long-term care we don't want to be a

7:20
burden to our

7:21
to our children to our families um

7:24
but we don't know if we're ever going to

7:26
need it you know so i think

7:28
it's human nature to to think well

7:32
you know i'd like to know that if i

7:34
don't need it i can get a return of my

7:36
premium

7:37
sometimes it's hard to just pay

7:39
insurance premiums thinking we may

7:40
never ever ever need it right and the

7:43
money just

7:44
goes away now the other

7:47
key part i think to this transition to

7:50
the asset based

7:53
policies is the premiums are fixed and

7:55
guaranteed

7:57
which is very important so

8:01
most of our clients they want to know

8:03
that everything is guaranteed

8:05
right you know there aren't any type of

8:07
a trust me contract

8:09
trust us that we won't change your

8:10
premium you know trust

8:12
us that your benefits will be paid out

8:14
in the future

8:15
i mean with the traditional policies the

8:18
main pushback we've received

8:20
you know especially over the past 10

8:22
years

8:23
the underwriter started to increase

8:26
premiums

8:26
dramatically on in-force policyholders

8:30
so every year or two they would receive

8:32
a rate increase notice of 10

8:34
12 15

8:38
and you would have to either pay the

8:39
higher premiums or reduce your benefits

8:42
and then once

8:43
once the policyholders start to receive

8:46
these

8:47
ongoing you know they're not happy

8:51
so the traditional policies have no

8:53
guarantees with regards to

8:56
what the premiums will be in the future

8:59
and yeah for baby boomers buying

9:02
policies that they may have for 25 or 30

9:04
years

9:06
that is a little unsettling so the you

9:09
know that's created the move

9:12
to fixed and guaranteed policies today

9:16
when you were talking about that there's

9:18
a lot of misconceptions in both the

9:19
annuity industry and the long-term care

9:21
industry one of the misconceptions

9:23
in the annuity industry is when you die

9:24
the evil annuity company keeps the money

9:26
right uh and people think that's the

9:29
only way that income can be structured

9:30
of course that's not true uh the vast

9:32
majority of what we do is is

9:34
when you when your legit hits the

9:35
mountain whoever's uh listed on your

9:38
policy gets all of the money the evil

9:39
annuity company doesn't keep a penny

9:41
even

9:41
though they're on the hook to pay i'm

9:43
assuming the same thing holds true with

9:45
what you just said

9:46
i think a lot of people are out there

9:47
saying well i'd never buy long-term care

9:49
because

9:50
you know the premiums just keep going up

9:52
and on no one's ever going to get the

9:53
money if i don't use it and what you

9:55
just

9:55
smacked everyone in the face and woke

9:57
them up is no no no

10:00
no that's not true you can get a policy

10:02
that has contractual guarantees

10:04
that is fixed and is not going to change

10:07
and

10:08
if you don't use it the money goes to

10:10
somebody correct

10:11
absolutely 100 correct 100 percent

10:15
correct

10:16
and see that i think we did one thing in

10:18
this podcast

10:19
and we're gonna we're gonna say it at

10:20
the end too is to

10:22
dispel the misconceptions the rumors the

10:25
misinformation of people

10:27
out there talking about long-term care

10:29
that have no idea what they're talking

10:31
about

10:32
that you can get the contractual

10:34
guarantees that

10:35
are not going to change um and you can

10:37
control the asset which is great

10:39
let me go backwards a little bit jack

10:40
when you mention the

10:42
the two of the six daily functions of

10:44
life let's let's be a little bit more

10:46
fun rudimentary fundamental here can you

10:50
tell

10:50
everyone that six daily functions of

10:53
life

10:55
oh absolutely so eating

10:59
bathing dressing

11:04
toileting maintaining

11:08
continence and

11:12
transferring or also known as mobility

11:15
so the act of moving from

11:17
sofa to chair up the stairs to the

11:20
bedroom etcetera

11:22
those two two of the six like you said

11:24
earlier right

11:25
that's the trigger point right so those

11:27
are the six things

11:29
that the doctor is going to look at and

11:31
say well they i sign off on the fact

11:33
that they can't do two of the six

11:35
which triggers the um the benefit

11:38
correct

11:39
right that's one trigger so there's two

11:41
triggers and

11:42
to get into the race you have to clear

11:45
either one of these low hurdles so the

11:48
second trigger

11:49
is you may be perfectly able to perform

11:52
activities of daily living forever

11:53
but if you have a cognitive impairment

11:57
if your memory is slowing down

11:59
and you know alzheimer's dementia

12:02
organic brain syndrome uh so

12:06
if that's the case benefits will be

12:08
triggered

12:09
as well and it's your doctor and i get

12:13
this question a lot a lot of

12:15
a lot of uh you know clients will ask

12:18
well jack who makes this determination i

12:20
mean i'm sure the insurance companies is

12:22
just gonna

12:23
say that we're fine no the evil

12:26
insurance company they're always they're

12:27
always having to get you yeah

12:29
of course and it's a fair question

12:32
but it is your doctor who makes that

12:35
determination

12:36
so to qualify for benefits you have to

12:39
submit

12:40
a letter in writing from your doctor

12:43
that you need help with two activities

12:45
of daily living

12:46
or that you have a severe cognitive

12:48
impairment

12:50
and once that is submitted

12:53
i mean they're going to review your

12:54
medical records but they're not sending

12:56
their doctor out

12:57
it's it's your doctor's written

12:59
certification and they're going to

13:00
review

13:00
your doctor's records so it really is an

13:04
easy process you know to get

13:07
to get the coverage so understand their

13:10
standardized memory tests

13:11
the wechsler memory scale which is just

13:14
i mean it's

13:15
easy to get get approved i was going to

13:17
ask you that

13:18
let's talk about the process so

13:22
you know i refer someone to you or they

13:24
go to ltcpartner.com

13:28
and they interact with jack you

13:31
tell us about the process you're going

13:33
to do you're going how are you going to

13:35
qualify

13:35
and let's talk about the underwriting or

13:38
what what's needed whether it's

13:40
full underwriting or simplified issue

13:42
can we go through that

13:44
sure i mean well my process is is of

13:46
course the first try to

13:48
understand my clients concerns

13:51
right right their objectives what

13:54
they're

13:55
why they're thinking about long-term

13:57
care planning

13:58
what they're they're trying to

14:00
accomplish you know so i want to really

14:03
learn about my clients you know where

14:05
they're at today and

14:07
and what's on their mind you know so

14:09
that's first of all

14:10
um of course

14:15
you know you buy the coverage not with

14:16
your money i mean

14:18
buy the coverage with your health so we

14:21
we

14:22
really need to know that our clients you

14:25
know can help

14:25
qualify for these policies so

14:28
um i mean i can

14:32
in three to five minutes i'll be able to

14:34
know if my clients can get a policy or

14:36
not i mean you know i don't

14:37
i don't need you know my clients to send

14:40
me all their doctor's records

14:42
right off the bat i don't need them to

14:46
fill out an

14:47
extensive health questionnaire literally

14:49
within three minutes on the phone

14:52
you know if i know the prescribed

14:53
medications if i know the basic

14:55
diagnoses and conditions that they've

14:57
been treated for

14:58
i'll immediately know you know which

15:01
underwriter is perfect for them

15:03
what type of policy they will be able to

15:06
help qualify for

15:08
you know so that's why i love about the

15:11
process

15:12
you just shoot it straight you're not

15:13
going to waste anyone's time

15:15
going down the rabbit hole if you don't

15:17
think that they can get coverage

15:18
but if you do think they're going to get

15:20
coverage um i mean you're pretty much

15:22
shopping

15:22
all providers and carriers for the

15:25
highest contractual guarantee correct

15:27
oh absolutely yes and i would say about

15:30
95

15:31
of my applications get approved maybe

15:34
higher

15:34
i mean it's you know if i'm submitting

15:37
the application we're going to get

15:38
approvals

15:40
so because you've just been doing it you

15:42
understand it

15:43
um and and you handle that process

15:45
turnkey for the client

15:47
and walk them through each step because

15:48
it sounds daunting but i know

15:50
your process and your best practices

15:52
that you've put in place

15:54
um right you know that they're fantastic

15:58
tell us about start to finish and you

16:01
can't give give us a range

16:03
of how long this process typically takes

16:06
and i guess you could break that down

16:07
with product types you know unfull

16:09
underwriting simplified whatever

16:11
can you give us kind of a ballpark on

16:13
that oh yeah

16:14
absolutely so again this will depend

16:16
upon which type of policy my clients are

16:19
interested in what they want to apply

16:21
for

16:22
if my clients want the traditional

16:24
standalone policy

16:26
medical records will always be ordered

16:28
always

16:30
so it's going to be a four to six week

16:32
process to get an approval

16:34
because we will need doctor's records

16:36
and we're at the mercy of the doctor to

16:37
copy and forward the records

16:39
okay the asset-based policies can be a

16:43
lot

16:43
easier for underwriting so with the

16:46
asset-based policies they will do a

16:48
telephone interview

16:50
it lasts 30 to 40 minutes on the phone

16:53
a cognitive screening so they give a

16:55
memory test 10 words

16:57
repeat the 10 words back not difficult

17:01
and if they like everything that they

17:04
hear on the transcribed telephone health

17:06
interview

17:08
i can get an approval in three days so

17:10
in the they

17:11
that you're mentioning that is actually

17:13
a representative

17:14
from that issuing carrier am i correct

17:18
um it's usually a vendor today

17:21
okay so it's usually a vendor that will

17:24
collect the information that gets

17:26
transcribed

17:27
to my underwriter who then

17:31
has a transcribed interview and either

17:34
approves

17:35
i mean again three days and we have an

17:36
approval or

17:39
if my underwriter reviews everything

17:42
and there's medical information that

17:44
they need to dot the eyes across the t's

17:47
they will order medical records so

17:50
i would say about sixty to seventy

17:53
percent of my clients get approved right

17:55
after the telephone interview

17:56
okay but of course everyone has

18:00
you know some type of medical health

18:02
history so if an

18:03
underwriter wants to go and order

18:05
records from a primary care physician

18:08
maybe to look at

18:11
you know t scores to see if there's

18:14
osteoporosis or they may want to i mean

18:16
it could be any numb

18:18
number of medical issues that they just

18:20
want to make sure

18:22
that everything's fine depending upon

18:24
medical history

18:26
so if they want that then okay it could

18:28
be you know three to four weeks to get

18:30
the records

18:31
if they need medical records um but it's

18:34
an easy process i mean there's no

18:36
generally speaking there's no there's no

18:38
exams okay

18:40
you know there's no blood there's nobody

18:42
showing up no nurses showing up at your

18:44
door on a saturday wanting to take blood

18:46
right right now i've got i've got one

18:49
underwriter

18:49
out of the 13 that i work with where if

18:52
they need medical records

18:54
they actually do send an examiner to the

18:56
house to collect

18:58
height weight blood pressure sure i mean

19:00
so

19:01
no blood but um

19:04
so it really it depends upon which

19:05
underwriter we're using and what their

19:07
specific guidelines are but for the most

19:09
part

19:11
half hour on the phone telephone

19:13
interview and nice often we have

19:15
approvals right after the interview

19:17
um tell us about ages like

19:20
how young is too young how old is too

19:22
old

19:24
well i mean the best time to look into

19:27
this is

19:29
when you're concerned about it

19:32
and when you're healthy enough to

19:33
qualify i have clients that

19:38
i mean biggest policy ever wrote was for

19:39
a client who was 37 years old

19:42
wow and his sister who was a few years

19:44
older had been diagnosed with

19:45
early parkinson's he bought the biggest

19:48
policy

19:49
i've ever ridden in 24 years um

19:52
that being said i mean most of most of

19:55
my clients are

19:57
probably between the ages of

20:03
50 and in 65

20:06
give or take that's probably the sweet

20:09
spot

20:09
and again i have clients in there in

20:11
their 70s you know and later 60s and 70s

20:14
and i have clients in their

20:15
in their 40s but i would say the sweet

20:17
spot for planning

20:19
probably you know 50s and 60s because

20:22
usually the catalyst for most of my

20:26
clients when they call me

20:27
usually they're taking care of mom and

20:28
dad yeah and that that's the eye-opener

20:31
it's a wake-up call

20:32
yeah when you have to that's right yeah

20:33
i went through that with my father when

20:35
he before he passed you know when when

20:37
you have to do some things

20:39
uh for your father that you could never

20:41
imagine clean up after him etc

20:43
it does make you think about oh my

20:45
goodness i

20:46
you know i don't want this to happen etc

20:49
um

20:50
it is a it is a wake up call so people

20:52
so people that

20:54
there's really no age range it sounds

20:56
like it just sounds like when you want

20:58
to check off that box and transfer that

21:00
risk because annuities are transferred

21:01
risk products

21:03
long-term care is certainly a transfer

21:05
of risk product you're transferring the

21:06
risk

21:07
to the carrier um

21:11
what else there's no specific age and

21:14
that's something

21:15
i mean sometimes there's consumer

21:18
gurus or they like they like to call

21:20
themselves well we'll say

21:22
you know on the radio dave ramsey's one

21:25
of them

21:26
don't buy long-term care insurance until

21:27
you turn 60 you need to wait that's just

21:30
crazy

21:31
you can't say that that's absolutely not

21:33
absolutely

21:34
right though the worst advice in the

21:37
world and he doesn't know what he's

21:38
talking about

21:39
first of all but he when that advice

21:42
gets

21:42
sent out to people people think i don't

21:45
need to do this 260. it's malpractice

21:48
it's absolutely malpractice i mean you

21:50
can say any way you want to

21:51
and i'm sure he believes in what he said

21:53
but he's absolutely

21:55
incorrect i did a recent youtube video

21:59
just kind of going factually through his

22:01
annuity annuity presentation which was

22:03
factually incorrect as well so people

22:05
just need to be careful

22:07
on the um advisors out there that are

22:09
flying at the 30 000 foot level because

22:12
they're just giving broad brushed

22:13
statements that that aren't true

22:15
and don't make sense uh we both jack and

22:18
i both like what dave is doing

22:20
with getting people out of debt that's

22:21
honorable and that's fantastic work

22:23
but the other stuff um you know with

22:25
specific products and strategies he

22:27
needs to leave to the experts like

22:29
like jack and myself hey let's talk

22:31
about

22:32
life insurance um and and let's just

22:35
kind of go through the asset base

22:37
two types annuities and life insurance

22:39
i'm very interested to hear

22:41
you talk about the life insurance

22:44
asset-based part

22:46
um and long-term care can you start at

22:48
the beginning and just educate

22:51
um the listeners and viewers on of this

22:53
podcast

22:54
oh absolutely so yeah the life insurance

22:58
based policies i mean they are they are

22:59
absolutely terrific today

23:01
you know because they've really morphed

23:03
into what they really are today

23:05
i mean they're not meant at all for life

23:08
insurance

23:09
that's just the chassis that's the car

23:11
that's carrying the money

23:14
down the road as we grow older so you

23:16
know these policies

23:18
are inflation

23:21
adjusted tax-free long-term care plans

23:25
that's what we're buying we're buying

23:26
inflation-adjusted

23:29
tax-free long-term care benefits for a

23:32
fixed cost with return a premium if you

23:37
don't need it

23:37
that's what they are and the life

23:39
insurance policies

23:41
these policies they can be funded in so

23:43
many ways

23:44
single premium you know where you just

23:47
write one check and you're done

23:49
or you can fund the policies through

23:52
tax-free

23:53
1035 exchanges from cash value from

23:55
enforced life insurance policies you may

23:57
have that you don't need anymore

23:59
right or you could fund the premiums

24:03
over five years or 10 years if you just

24:05
want to fund it out of income

24:08
you can use ira rollovers at least with

24:10
one company to get the money into the

24:12
policies

24:12
i mean so many ways to fund it wow um

24:16
you know so but you know so what we're

24:19
usually doing

24:20
is is first talking plan how much

24:22
coverage

24:24
you know do we think we want and then we

24:27
can look at all the different ways to

24:28
get the money

24:29
into the plan you know whether it's

24:33
writing a check single premium uh you

24:35
know spreading premiums out

24:37
over time um you know or

24:41
you know using like qualified money but

24:43
the

24:44
the leverage that we get in these plans

24:47
i mean to give you an idea not to

24:49
but you know so let's say someone has a

24:51
hundred thousand dollars

24:53
you know and they write a check and

24:55
let's just protect you know let's say a

24:57
husband and wife are 60 years old they

25:00
could write a check for a hundred

25:01
thousand dollars

25:03
and they could buy a policy you know at

25:06
age 60 that

25:08
at age 85 when they're likely to need

25:11
care

25:12
is going to provide 700 800

25:15
000 850 000 just depending upon the

25:19
inflation factors that we're using wow

25:22
you know you're getting

25:23
seven to eight to one leverage on the

25:26
money if you need care

25:28
or and it's contracting you get your 100

25:30
000 back at death you know so

25:33
yeah and i think i think probably the

25:35
the only

25:36
because i can just hear the consumer

25:38
right now because because they want to

25:39
have their cake and eat it too

25:41
and it's never like that is is the

25:44
downside in someone's eyes but it's not

25:46
in mine because you just explained the

25:47
upside

25:48
is there's there's no growth portion on

25:50
that hundred thousand you get your money

25:51
back if you don't use it

25:53
which i think is fantastic with a seven

25:54
to eight times leverage that's

25:55
contractual

25:57
um i think yeah that's great i don't

25:59
know what the argument but i'm assuming

26:01
that's the only

26:02
argument you get right well i don't get

26:04
arguments because people calling me want

26:06
long-term care coverage

26:07
that's the reason they're calling me to

26:08
begin with

26:12
yeah i mean i'm not i'm not trying to

26:14
sell somebody anything

26:16
and opening up conversations they're

26:19
already calling me because they want the

26:20
coverage so i'm trying to maximize their

26:22
dollars but you're right if someone

26:25
thinks wow i i spend a hundred thousand

26:28
dollars and all i'm gonna get back is a

26:30
hundred yes it's a zero percent return

26:32
but again you could get seven or eight

26:34
nine hundred thousand in living benefits

26:37
listen if you just want to maximize the

26:38
hundred and not have the seven or eight

26:41
hundred thousand

26:42
well i mean insurance company today

26:43
would probably just say all right we'll

26:45
give you two hundred thousand of death

26:46
that's it

26:47
you can use it for care you can use it

26:50
for life insurance but if you're 60

26:52
years old and you give us a hundred

26:54
a three percent return in 25 years all

26:57
you're going to have is 200 so you're

27:00
you know the net amount at risk is a

27:02
hundred and you're maxing out a two

27:05
and that's not exciting that's not

27:07
leverage to me it's a no-brainer

27:09
you're putting in this case 100 you're

27:12
guaranteeing that that

27:13
that transfer of risk amount in the

27:15
future the downside is you get your 100

27:17
back

27:18
right right that's right that's right

27:20
you give up a little bit of growth

27:22
that's nothing to sing about

27:23
anyway i mean there's nothing we can do

27:26
uh you know laddering cds or i mean

27:29
you can make money three percent i mean

27:30
if you're that's fine

27:32
but you're not gonna get eight hundred

27:34
thousand

27:35
no and i mean the life the life

27:38
insurance

27:38
is nothing more than a cost-effective

27:41
and efficient

27:43
delivery system for the long-term care

27:45
benefits that are contractual

27:47
correct correct that's it

27:51
that's it so it's it it's great leverage

27:55
you know if you're looking to have

27:57
tax-free benefits for long-term care

27:59
planning

27:59
you know as a separate bucket from your

28:01
investment side from your safe money

28:03
side from your income side

28:05
you know so we're using money that's not

28:07
needed for income that's the first

28:08
correlated

28:09
it's none that's right that's right yeah

28:12
right

28:13
we're not using income money we're not

28:15
using we're using money that's

28:18
a separate bucket so so let's talk about

28:21
the other asset

28:22
based type which which would be

28:24
annuities

28:26
and let me just tell people real quick

28:27
about the annuities on my side which you

28:29
know

28:30
i only sell contractual guarantees and

28:32
there are what's called

28:33
income riders attached to policies that

28:36
will say that

28:36
it's confinement care nursing home care

28:38
or enhanced benefit

28:40
and it's and it's guaranteed issue you

28:42
don't have to do anything you know to

28:44
get it

28:45
and that should tell you all you need to

28:46
know it's not primary coverage it's a

28:49
supplemental

28:50
only thought and even then

28:53
i would still refer you to jack to get

28:55
real long-term care so

28:57
let's go through what you have on the

28:59
annuity side

29:00
that's real long-term care right so so

29:04
the asset-based annuities similar to the

29:06
asset-based life insurance right we're

29:08
getting

29:09
extended coverage past the amount we're

29:11
depositing

29:12
you know so typically the underwriters

29:14
will i mean they'll

29:16
they'll triple your money right off the

29:17
bat hundred thousand is automatically

29:19
three hundred thousand for long-term

29:21
care

29:21
got it you know um we can put inflation

29:25
protection

29:26
in the policies to some extent as well

29:29
so again if we want to we're getting

29:31
inflation adjusted

29:33
long-term care benefits you know if we

29:35
buy the inflation on the annuity side

29:38
that comes out of cash value you know so

29:40
if we put write a check for 100

29:42
well okay cash value is now probably 70

29:45
75.

29:46
i mean you're paying then for the

29:47
inflation so

29:50
the the where we use the annuity

29:52
approach

29:53
you know quite frankly is if our clients

29:56
are

29:57
much older okay typically in their 70s

30:02
or they're just

30:05
if they're not in good health if their

30:06
health won't allow them to get the asset

30:09
based

30:09
life insurance contracts because the

30:13
there's more underwriting on the life

30:14
insurance contract so if

30:16
if if you're in good health and

30:19
certainly if you're under 70

30:22
72 years old we're going to be using the

30:25
life insurance asset based policies

30:27
absolutely

30:28
that's a lot if health is compromised

30:33
or if you're older where the mortality

30:36
costs of the life insurance policy

30:38
have now crossed over to be very cost

30:41
prohibitive

30:42
well we have the the annuity policies

30:45
that will be able to give you

30:47
you know six years of coverage um

30:50
i have some contracts that would even be

30:52
lifetime unlimited

30:53
you know with both the annuity or the

30:56
life insurance

30:57
uh approach so we can use either

31:00
avenue to get the the coverage but we're

31:04
usually

31:05
leading with the life insurance approach

31:07
because most of the time

31:08
our clients are healthy enough to get it

31:10
so let's talk about

31:12
the structuring of the policies can you

31:15
is it just single life or are there

31:18
opportunities

31:19
and and vehicles and asset-based life

31:22
insurance and annuities that you can do

31:24
a joint policy with your spouse or

31:26
partner

31:27
yes um i mean all companies offer

31:30
individual policies i have

31:31
one underwriter uh one america they will

31:35
offer joint life so

31:38
so we can you know cover

31:42
you know partners husband and wife

31:44
mm-hmm

31:45
you know with one policy which reduces

31:48
cost

31:50
and you know they can each have their

31:52
own individual benefits so you're not

31:54
sharing your monthly long-term care

31:56
benefit with your

31:58
partner or spouse you each have your own

32:00
individual coverage

32:02
but under one policy a joint life

32:05
policy so yes yes we we can do that as

32:09
well that's fantastic um let's talk

32:12
about

32:13
our friends in washington dc you know

32:15
because um

32:16
they're always got their little fingers

32:18
and everything and they're messing with

32:20
things

32:21
um and we're kind of headed toward that

32:23
socialized medicine platform

32:26
sooner than later um how is this

32:29
if at all going to affect long-term care

32:32
policies in your opinion obviously

32:34
nobody knows the right answer but

32:35
if anyone's going to answer it it's

32:37
going to be you so what do you think

32:38
about that

32:40
i i can't i can't see it

32:43
providing comprehensive long-term care

32:46
benefits

32:47
you know for for everyone you know i

32:50
mean it's

32:51
i mean the money isn't there in the in

32:53
our medicaid system first of all to

32:55
cover it i mean we're

32:57
you know right now the states are trying

32:58
to think of ways to incentivize people

33:01
to private plan for long-term care so

33:04
how are we going to

33:08
you know cover long-term care costs

33:12
you know through through the public

33:14
sector

33:15
that's of any significant uh

33:19
value really i mean the state of

33:21
washington right now

33:22
just uh you know is uh

33:26
going through the process of uh

33:30
passing a long-term care trust act for

33:32
all of the residents

33:33
okay through a payroll tax but it's a

33:36
hundred dollars a day

33:38
for one year that's it i mean that's the

33:41
benefit and that's the same benefit that

33:43
in 2011

33:47
ted you know senator uh kennedy

33:50
um was trying to pass through the class

33:52
act i mean to give everybody

33:54
a hundred dollars a day for one year

33:56
it's a it's a great political speech

33:58
but it has absolutely no teeth to it

34:01
once you dig

34:02
in i mean that's just that's lunacy

34:05
it's so short i mean it listen it it's a

34:09
little bit

34:09
a help but the cost of care today is 9

34:13
000 a month 8 9

34:14
000 a month and they're offering 3 000 a

34:18
month

34:18
at least in washington for one year you

34:21
know so it's it's something

34:23
but it's going to be funded with a

34:24
payroll tax a pretty hefty payroll tax

34:27
so yeah i don't know

34:31
yeah there is there's no good answer

34:32
just just bad sales pitches as i always

34:35
say

34:36
well i mean i i think for for for our

34:38
clients that do have

34:39
assets yes and can plan they need to

34:42
plan

34:43
because you know the public benefits

34:45
that will be available

34:46
i mean you know even if they come up

34:48
with a small benefit for people it

34:51
you know it's going to have strings

34:53
attached

34:54
uh you know income qualifications maybe

34:57
i don't know

34:58
i think it's just wise for everybody to

35:00
plan i can't see how

35:02
the government will be able to pay for

35:04
long-term care with the baby boomers

35:06
at all i hear you so much not there

35:09
let's pivot to without mentioning any

35:11
carrier names

35:13
do you see more carriers getting into

35:16
this

35:16
asset-based long-term care i know that

35:19
the traditional long-term care

35:21
carriers have there's not as many can

35:23
you comment on the space from the

35:25
standpoint of

35:26
of choice because i think another mis a

35:29
misconception out there about long-term

35:30
care

35:31
is there's just not many companies

35:33
offering it

35:34
which means that there's just not a lot

35:36
of competition

35:38
i'm assuming that's just dead wrong

35:40
correct well

35:45
it's it isn't it isn't i mean when it

35:48
you know i mean the tr

35:49
the traditional spaces is ridiculously

35:53
um small today we just had two

35:56
underwriters leave last month we're down

35:57
to

35:58
four underwriters four and going back to

36:00
traditional traditionalist

36:02
i pay and i pay and i pay in but if i

36:04
don't use it

36:05
money goes poof right that's right we

36:07
have four

36:08
underwriters left i had 120 underwriters

36:11
when i began in 1998.

36:13
and there's four left there's four left

36:16
in the traditional side which

36:18
four and two of the four believable and

36:20
two of the four

36:21
you would never buy a policy the

36:23
premiums are through the roof so we

36:24
really have

36:25
two um so the hybrid side i'd say right

36:30
now

36:30
i mean it's a very healthy arena but

36:32
it's it's

36:34
you know it we probably have seven

36:37
eight underwriters i mean we only need

36:39
one but it's been

36:41
you know it's been growing we've had a

36:43
few new entrants in the past uh

36:46
two years and i'm sure we're absolutely

36:48
going to get more entrants

36:50
absolutely over the next three to five

36:52
years because it's where the market's

36:54
going but

36:55
you know right now we have a solid eight

36:56
companies that are

36:58
you know really you know making the

37:00
market

37:01
in inflation adjusted extension of

37:04
benefit products

37:06
you know not the riders on the life

37:07
insurance policy i mean which are death

37:09
benefit focus but just

37:11
inflation-adjusted you know asset-based

37:14
long-term care policies so

37:16
yeah we have eight solid companies and

37:18
they're all high-rated it would seem

37:20
that with the demographic tidal wave of

37:22
all these 10 000 baby boomers reaching

37:24
age 65 that

37:25
companies would certainly look into that

37:28
but there has to be a reason that

37:29
they're not

37:30
running past the door and through the

37:32
door tell us about the regulation

37:35
because this is not the wild wild west

37:37
long-term care is

37:38
is so far from that is heavily regulated

37:42
can you speak

37:43
to that part of the of the business

37:45
obviously you

37:46
you manage that for your clients and you

37:49
go through the weeds and and you deal

37:50
with all that

37:51
but tell us about the regulation and the

37:53
safety of the whole

37:55
industry and how it's how it's run well

37:58
i mean

37:58
with with with all products whether it's

38:01
you know long-term care products and

38:02
life insurance products

38:04
and it's it's you know consumers are

38:07
protected

38:07
you know up to stake guarantee i mean we

38:09
have state life and health guarantee

38:12
associations

38:13
you know of course so that if if we ever

38:15
have an insolvency

38:18
with an insurance company then the the

38:20
state

38:21
will be the backstop up to stake

38:22
guarantee limits you know which

38:25
some states it can be unlimited some

38:27
states like california might be seven or

38:29
eight hundred thousand but we have

38:30
significant

38:31
backstops for for insolvencies and none

38:34
of the companies today are really at

38:35
risk for insolvencies

38:37
um so we have we have and again as far

38:40
as

38:41
like regulation with the contracts all

38:43
the contracts have to adhere to the

38:45
internal revenue

38:46
code 7702 b

38:49
you know so so everything is is

38:52
standardized

38:53
and codified from how the contracts can

38:55
read

38:56
what the benefit triggers are what has

38:59
to be inside a contract for it to be

39:01
considered long-term care insurance

39:04
you know so i like that i mean there's i

39:07
like the fact that

39:08
there's a little bit of a heavy hand and

39:10
a consistency

39:11
within the industry based on that that

39:13
specific um

39:15
law that you mentioned so that yeah

39:18
there's some i mean there's just for the

39:20
consumer i think it's good

39:22
they don't have to they don't have to

39:24
learn everything about it they can go to

39:26
an expert like you who understands it

39:28
back and forth

39:29
give give them your their specific

39:31
situation

39:32
and then you can you know point them

39:35
toward the solution that's

39:36
going to provide the highest contractual

39:38
guarantee

39:39
but the reason we don't have a hundred

39:41
underwriters i mean the reason

39:43
you know again we you know we have on

39:46
that's a base side of solid a companies

39:48
but the reason is

39:49
is again it's a it's a very capital

39:51
intensive

39:53
underwriting business they're trying to

39:55
predict

39:56
a need for care that's for most people

40:00
in their middle to later 80s

40:02
and if the buyers are in their 50s and

40:04
60s today

40:05
it's a hard business to underwrite you

40:07
know we we pretty much know when people

40:09
are going to die but we don't know if

40:10
they're going to need care

40:12
and for how long and to try to

40:14
underwrite

40:16
a healthy individual in their 50s or 60s

40:19
and you know try to project

40:22
the risk at age 85 or 88

40:25
well it's just a lot of insurance

40:27
companies they would rather just not

40:30
have that risk you know that's very

40:33
risky and that's the main reason

40:34
right in that sense always i read

40:37
something a while back that said and and

40:39
i want you to clarify if this is true or

40:41
not

40:41
that when you cannot do two of the six

40:43
daily functions of life of which you you

40:45
talked about in the opening part of the

40:47
podcast that you live

40:49
an average of three years and a maximum

40:52
of seven

40:52
is is that in the ballpark or not it is

40:56
i mean it's in the ballpark you know um

41:01
you know it's just an average but life

41:03
doesn't work in averages

41:04
no i know i know that yeah yeah so an

41:07
average

41:07
an average need today and and we're

41:09
seeing through recent actuarial data

41:12
that it's increasing

41:13
it's up to about 42 months right now

41:15
okay now so the internet will tell you

41:17
it's three years but it's kind of going

41:19
up to three and

41:20
a half right now and uh ninety percent

41:23
of claims will be less than six

41:27
okay but again ten percent are going to

41:29
be longer than six and we have cognitive

41:31
impairments

41:31
alzheimer's dementia where parkinson's

41:35
disease is another you know we're

41:36
you can eat care for a very long time

41:39
and that's the

41:40
that's the benefit proposition of

41:41
transferring risk

41:43
i mean in a nutshell you don't know so

41:46
why not cover yourself and transfer the

41:48
risk to the carrier

41:49
question about that the time of this

41:51
taping and um

41:53
you know we're in the middle um

41:54
hopefully at the very going downward

41:57
toward the coveted end but i doubt it

41:59
does has covet affected anything in your

42:02
business

42:03
oh my god yes i mean it absolutely did i

42:06
mean

42:06
significantly so um

42:10
last year yeah well in march when cove

42:13
it happened

42:15
across the board all of the underwriters

42:19
pulled product you know for applicants

42:22
or restricted it or restricted it for

42:24
applicants 70 and over

42:27
you know so because again the risk the

42:29
risk

42:30
you know if you're older and you got

42:32
covered you could have a higher risk of

42:35
passing away

42:36
right so so absolutely

42:39
um they did restrict um

42:43
issue and um

42:46
they tightened up underwriting it has

42:49
it has now just started to open back up

42:52
again with the vaccinations the

42:54
underwriters

42:55
are for most part business as usual

42:58
although there's

43:00
one or two underwriters that still

43:01
haven't completely

43:03
completely opened it back up

43:07
to applicants in their 70s so

43:10
we had yeah we definitely had impact

43:12
there for sure

43:13
so things are kind of calming down a

43:16
little bit and getting back to normal

43:17
but you can understand

43:19
the uh you know the the underwriters and

43:21
the carriers the unknown was the unknown

43:24
it's blue water never been there before

43:26
so that's right

43:27
that's right so everything was very

43:29
tight last year

43:31
for a solid six months but now we're

43:35
you know back to to ordinary business

43:38
again

43:39
thankfully thank you um we got a few

43:41
minutes left but i wanted to go through

43:43
and just

43:43
ask you what are some of the questions

43:46
that you would like to address or some

43:48
of the issues you like to address that

43:49
we have but we covered a lot of ground

43:51
and

43:52
and this is the last time jack's going

43:53
to be on on the on the program

43:56
but what would you like to address about

43:58
long-term care

44:00
maybe it's misconceptions maybe it's

44:01
common questions

44:03
i don't know just fill in the blanks of

44:05
what we haven't filled in so far

44:09
well

44:13
you know i mean most most of my clients

44:17
the questions that they have really you

44:20
know

44:20
relate around i mean again what we have

44:22
discussed though you know

44:24
okay how do they qualify for benefits um

44:28
how do how do they know will will the

44:30
company be there for them in 25 years

44:32
you know i mean the typical concerns

44:35
about will a company be solvent

44:37
um you know can can the premiums

44:41
change etc which again is more on the

44:44
traditional side than the

44:45
than the asset-based side um a big

44:48
question i get today

44:50
is is you know

44:53
at claim time what is the the process

44:56
of collecting benefits and there's a

44:59
couple of different policy types today

45:03
which you know has has it's changed from

45:06
the past

45:07
in the past the primary policy is a

45:10
reimbursement model

45:11
where you actually have to submit

45:13
receipts right you have to show that you

45:15
have a proof of loss

45:16
to receive benefits and then you're

45:19
reimbursed for your out-of-pocket costs

45:21
so a lot of my clients today a question

45:23
they have is well

45:24
can my daughter take care of me you know

45:27
what if

45:28
what if i want a family member to help

45:30
me out

45:31
etc so

45:34
we have a couple of policies not many

45:37
but we have a couple of policies today

45:39
that have the utmost flexibility they're

45:42
called cash

45:43
indemnity policies no restrictions if

45:46
you need care

45:47
anybody can be your caregiver your

45:49
daughter can take care of you if needed

45:50
you can

45:51
they're just going to give you the cash

45:54
you don't have to even show that you

45:55
came out of pocket and paid a caregiver

45:58
so so that's been one of the you know

46:01
one of the changes and it's it's a

46:02
concern

46:03
you know for a number of my clients you

46:06
know having the flexibility

46:08
uh with the policies to receive the

46:10
benefits with you know no questions

46:12
asked and

46:12
not having to use an agency for home

46:15
care

46:16
um etc so that's you know that's a

46:19
question that i that i receive

46:21
a lot um do they get a hard copy policy

46:25
at the end of the

46:26
uh at the end of the process oh always

46:29
get a hard copy pro is there a free look

46:31
provision with long term care

46:34
there's a free look provision of 30 days

46:37
in every state

46:38
you know so the typical process

46:40
underwriting offers are good for

46:42
60 days you do not have to submit money

46:44
with an application

46:45
okay every underwriter will issue a

46:48
policy without money

46:50
and then i you know i'll fedex the

46:52
policy to my clients

46:53
they can pay for it when they want once

46:55
they write the check

46:57
they then have 30 days you know to get

46:59
their money back

47:00
after you know whatever the date is on

47:02
the delivery receipt and the check

47:05
sure they would have a 30-day free look

47:07
period to ask for their money back uh

47:10
i've

47:10
24 years i've never had a client ask for

47:12
their money back so

47:14
but but you know that with a lot of my

47:16
listeners across the country and i'm

47:18
licensed all 50 states and

47:19
we do national business like you do a

47:21
lot of people just really don't know

47:23
the basics of long-term care and with

47:25
this first interview with you i wanted

47:27
to cover

47:28
really just some fundamentals and some

47:30
basics and

47:31
and some questions that people probably

47:32
had in their back of their mind but

47:34
never really wanted to ask and didn't

47:36
know how to ask it and hopefully we

47:38
we have done this during today's program

47:42
i want to encourage people um to go to

47:46
jack's site

47:46
reach out to him it's ltc just like

47:49
long-term care

47:50
ltc partner p-a-r-t-n-e-r

47:54
dot com so ltcpartner.com

47:58
and like me jack answers his phones and

48:01
he's he's the guy that's gonna be

48:02
working with you

48:03
one-on-one with decades and decades of

48:06
experience

48:08
and a law degree behind it which i think

48:11
is just fantastic

48:12
we will be having jack on in the future

48:15
and with future interviews we're going

48:16
to be going in

48:17
to and doing some examples um

48:20
of some cases and things like that but

48:23
for this one

48:24
jack you've hit a home run i don't know

48:25
if you played baseball you are based in

48:27
the

48:27
atlanta area but i was basketball like

48:31
you stan

48:32
hey you know i shoot free throws and you

48:33
hit home run so you know between the two

48:35
of us we're pretty

48:36
we're pretty tough but uh i really

48:39
appreciate you being on fun with

48:40
annuities

48:41
um any closing words before i close this

48:44
thing out

48:47
well i just appreciate the opportunity

48:49
to help all of your clients stand you

48:51
know what you do is tremendous

48:53
for everyone you're the best in the

48:55
business by far

48:57
and you know i can say the same i can

48:59
say the same thing about you jack

49:01
lundenburg i tell you what

49:03
he is the source uh amv

49:06
thought leader for long-term care and

49:07
i'm not just saying that because he's on

49:09
he he knows that's how i think

49:11
and uh my hope is that people will find

49:13
more and more people will find you i

49:15
mean you're already busy

49:16
as heck but um i do encourage my

49:18
listeners and viewers as people know

49:20
this is on

49:21
this is on all podcast podcast platforms

49:23
we also film it on fun with annuities

49:25
youtube channel

49:26
jack wasn't able to show us his mug this

49:28
time because he's traveling but next

49:30
time we'll

49:30
you'll be able to see jack interact but

49:32
jack i really appreciate you being with

49:34
us and for all you listeners and viewers

49:36
out there

49:36
i'll see you next week on fun with

49:42
annuities

49:44
thanks for listening to fun with

49:46
annuities please hit the subscribe

49:48
button and make sure to go to my site

49:50
at the annuityman.com where you can run

49:53
your own

49:54
spea dia and culat quotes and see a live

49:57
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49:58
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50:00
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50:01
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50:03
you can also

50:04
sign up for my six annuity owner's

50:06
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50:09
and under no

50:10
obligation i also encourage you to

50:12
schedule a one-on-one call with me

50:15
stan the annuity man so we can have a

50:17
full discussion

50:18
of your specific situation it will be

50:20
the best

50:21
brutally factual and truthful advice you

50:24
will ever get and that's one guarantee

50:26
you should definitely take advantage of

50:28
so join me next time for the number one

50:30
annuity podcast

50:32
on the planet fun with annuities

50:39
[Music]

50:49
you