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Rethinking the Approach to Long-Term Care Insurance

/// Posted by Aviva Sapers

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Historically, there are many who do not purchase Long-Term Care (LTC) Insurance despite the increasing likelihood that prolonged financially debilitating needs for care may arise at some point in our future. Older Americans and nursing facilities being hit so hard by the COVID-19 pandemic might encourage people to want access to home care should they have a long term illness, but it only adds to potential need for extended coverage.

Traditional LTC insurance is often viewed as expensive coverage because if you don’t use it, you lose the money paid in as premiums. Some of those policies have seen double-digit premium increases. If you have one of these policies, a premium increase is a challenge, but actually it represents how underpriced your coverage really has been. We have yet to find a scenario where it is cheaper to buy a new policy today than to accept the increase forced upon policyholders by the insurance carriers for LTC. Regardless, a newer generation of hybrid long-term care products have come to the market where if you don’t use the benefit, your family gets back most or all of what you paid in premiums.

Hybrid products are more cash intensive and are a good alternative for people sitting on a bunch of cash earning nothing at the bank. You could move that cash into a hybrid and provide yourself with 3.5-5x the amount paid in to use towards the cost of a long-term illness.

There is another type of use-it-or-keep-it long-term care option, which is to add a long-term care rider on a new life insurance policy. This rider will provide a monthly benefit to the insured if they become unable to do 2 out of 6 activities of daily living or are cognitively impaired. If the insured never gets sick and just passes on, then the beneficiaries will receive the death proceeds originally purchased. 

Both of these newer options, hybrid or LTC rider on a life policy, guarantee that either you or your beneficiaries will receive some level of benefit—whether it’s needed for LTC or the policyholder dies without using it and their beneficiaries receive a tax-free life insurance payout.

Another advantage of these newer products is in flexibility of premium to be paid. Policyholders can either pay a lump-sum premium up front or carry a level payment schedule for a set term. There is also an added advantage of being able to change your mind and take a portion of your money back if certain conditions are met. At the very least, the premiums are either guaranteed or much less likely to increase over the specified premium paying period.

With Medicare and Medicaid – by far the largest payer of long-term care costs – facing funding cuts, our ever-growing population should not expect to rely solely on this program for LTC needs. Having some type of Long-Term Care coverage of your own can help you get into a facility of choice and often provides care consultants to help you to consider the best ways to get the help you need when it is needed.

With a little innovation and greater access to affordable and flexible products, insurance carriers, regulators, and policyholders can work together to rethink how we approach aging in this country. If you’re interested in discussing available products and solutions, don’t hesitate to reach out with your specific concerns.  

Using Endowments for Sustainable Giving

/// Posted by Aviva Sapers

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One of the biggest challenges facing nonprofits with large individual donations, is losing an annual stream of income when the donor dies. While most nonprofits rely heavily on their annual fundraising campaigns, it is important, and sometimes vital, for nonprofit organizations to encourage such donors to endow their gifts – distinct from annual contributions – to establish a solid financial foundation that will help build sustainability for the future.

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Podcast Q&A: Using Endowments for Sustainable Giving

/// Posted by Aviva Sapers

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Aviva Sapers, CEO & President at Sapers & Wallack, answers questions about our October blog, Using Endowments for Sustainable Giving.

MA Paid Family Medical Leave Act: Overview and Update

/// Posted by Tom Connors

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By now, most businesses are aware and have engaged in the preliminary steps toward rolling out the Paid Family and Medical Leave Act (PFML) in Massachusetts. Starting January 1st, 2021, eligible Massachusetts workers will be able to take up to 26 weeks of paid family and medical leave benefits, meant to cover maternity and paternity leave, military exigency leave, and extended sick leave. On July 1st, 2021, covered workers will also be able to take up to 12 weeks of paid family leave for the needs around caring for a sick family member.

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Reviewing Life Insurance Needs in the Time of COVID

/// Posted by Aviva Sapers

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As we enter Life Insurance Awareness Month, it seems a good moment to reevaluate why we have the insurance we do and whether it is the right amount to fulfill the needs we have. Against the backdrop of the COVID-19 pandemic and with an election only months away that has the potential to greatly change tax policy, many are considering their mortality and financial security of their loved ones after they’re gone.

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Podcast Q&A: Reviewing Life Insurance Needs in the Time of COVID

/// Posted by Aviva Sapers

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Aviva Sapers, CEO & President at Sapers & Wallack, answers questions about our September blog, Reviewing Life Insurance Needs in the Time of COVID.

Estate Planning Today for the World You Want Tomorrow

/// Posted by Aviva Sapers

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Often, when I begin a discussion with a client on estate planning, I remind them that they generally have three beneficiaries: family, charity, and Uncle Sam. I follow up with the question, “how much do you want to leave to each?” 

No one ever wants to leave their money to Uncle Sam, but the government will receive a piece of most everyone’s estate none-the-less — whether it be at the federal or state level, so you might consider incorporating philanthropy or bequests into your estate plan. With a deliberate, structured approach, you can leave specific assets to your kids and significant sums to charity, while paying zero estate taxes.

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Podcast Q&A: Estate Planning Today for the World You Want Tomorrow

/// Posted by Aviva Sapers

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Aviva Sapers, CEO & President at Sapers & Wallack, answers questions about our August blog, Estate Planning Today for the World You Want Tomorrow.

There is a pervasive myth that insurance products produce mediocre returns. In truth, though life insurance has been purchased for many years to provide security and guarantees, there are some newer product lines that can be very attractive for investment purposes—particularly in volatile markets. 

In order to remain competitive and relevant, the insurance industry has had to become much more creative with the investment options underlying their products. Years ago, they unveiled variable life insurance and variable annuities, where policyholders can invest monies that were over and above the cost of the insurance itself into mutual funds. Policyholders can choose from a myriad of mutual funds to invest in, much like what they’d find in various 401(k) plans, and now, some even offer target date funds as well. When the market goes up, the investment account or cash value accounts go up with it, and when the market declines, so do the underlying values to match a broader spectrum of risk tolerances.

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Aviva Sapers, CEO & President at Sapers & Wallack, answers questions about our July blog, Mitigating Downside Risk in the Market with Annuities and Life Insurance