Disclaimer: Since Medicaid rules and insurance regulations are updated regularly, past blog posts may not present the most accurate or relevant data. Please contact our office for up-to-date information, strategies, and guidance.
Pre-Planning vs. Crisis Planning Products
At The Krause Agency, our agents and advisors have the benefit of offering their clients not only pre-planning products but also crisis planning tools related to aging and long-term care. We have always helped professionals provide guidance associated with aging and long-term care dependency to their clients. But now, with the addition of Medicare products and the expansion of our LTCI division, we continue to solidify our commitment to all aspects of senior planning.
What is Pre-Planning?
Pre-planning takes place before the client requires care while they are still relatively young and healthy.
Pre-Planning with Long-Term Care Insurance
The ultimate pre-planning tool is long-term care insurance (LTCI), which provides coverage in the event your client needs professional care in the future. LTCI offers flexibility for your client to choose the type of care they receive and where they receive it (e.g., home health services, adult day care, assisted living). The cost of LTCI is a fraction of the out-of-pocket cost for long-term care. Plus, the younger the client, the more affordable their LTCI premiums.
In addition to safeguarding their assets, LTCI protects your clients’ loved ones from being full-time caregivers. Instead, their loved ones can manage their care and ensure they have the assistance they need. Needless to say, LTCI provides peace of mind for both your clients and their loved ones.
Pre-Planning with Medicare Products
Medicare products are another pre-planning tool for clients in retirement and others who are eligible for Medicare. Plus, Medicare offers a variety of options for your clients, depending on their healthcare needs and financial circumstances. With so many options, your clients need professional guidance to decide the best fit for their situation. Choosing the wrong plan could cost them more than they planned for or even deplete their assets.
Pre-Planning with Final Expense and Funeral Products
Final expense products and funeral trusts may also be used in pre-planning to protect assets and set aside funds for end-of-life expenses, such as debt, funeral costs, and possibly a small inheritance. Depending on your client’s situation, one product may be better suited for them. You can help them decide the best fit.
Read More: Can Your Clients Pass This Long-Term Care Quiz?
What is Crisis Planning?
Although pre-planning for long-term care is ideal, it’s crucial to understand how crisis planning can assist clients facing an immediate care need.
Crisis Planning with the Medicaid Compliant Annuity
The Medicaid Compliant Annuity (MCA) is a revolutionary product for clients who no longer qualify for LTCI. An MCA is a single premium immediate annuity that converts assets into an income stream with zero cash value. It is a spend-down tool designed to help agents and advisors accelerate Medicaid eligibility for their clients who are facing a costly nursing home stay. An MCA may be right for your client if they reside in a Medicaid-approved facility, have exhausted their Medicare or long-term care insurance benefits, are paying for care out of pocket, and have countable assets exceeding Medicaid’s limitation.
Crisis Planning with Funeral Expense Trusts
Another part of the crisis planning toolbox is the funeral expense trust (FET). An FET is a small whole life insurance policy that is irrevocably assigned to a funeral trust controlled by an insurance company. It allows clients to set aside funds for end-of-life expenses, alleviating the burden on their loved ones. Plus, an FET under a state-specific limit ($15,000 in most states) is considered an exempt asset for Medicaid purposes.
Regardless of where your client is in the planning process, The Krause Agency is here to support to you and your agency along the way. Schedule a call with us to discuss any of these vital products and how you can add them to your business.
