Tuesday, March 12, 2019

Ensure Care for Children with Special Needs

Estate planning is important for all families, but it’s critically important for families with special needs children. Parents of special needs children face unique challenges, such as ensuring there are sufficient funds available at their death to care for their child, finding appropriate caregivers and guardians, and selecting the correct trustee to manage and distribute inheritances via special needs
trusts.

SUGGESTIONS for families with children with special needs:
  • Establishing a team of advisors, along with you, to help with estate planning but particularly to assist with the ongoing care of children with special needs through adulthood. 
  • Meeting with a qualified special needs estate planning attorney to prepare or update various documents, including a will to name guardians and a special needs trust to hold assets. A revocable trust, powers of attorney and medical directives may also be necessary. 
  • Reviewing the titling of assets to ensure they are held in trust or special needs children, because outright distributions could disqualify government assistance. 
  • Talking to siblings and parents about being guardians and discussing their responsibilities. 
  • Creating an independent trust, and funding it with life insurance. The special needs trust must be set up in such a way that it accepts gifts. 
  • Preparing a Letter of Intent outlining the parents’ desires and hopes for their child with special needs, along with critical information pertaining to his or her care.
The following case studies demonstrate common and real world scenarios you may encounter while working in this market: Case Studies

Tuesday, February 26, 2019

Valentine's Day at White Castle

by Pam Franzen, MVP Brokerage Sales Director

White Castle has a white table cloth Valentine’s dinner, and that is where Rich and Mary were going this year to celebrate, what will probably be their last Valentine’s Day together.

Why? Rich has Stage IV pancreatic cancer with less than a year to live according to his doctors.

Last summer, an advisor I work with, called and asked if I could talk with his clients, Rich and Mary,  regarding the acceleration of the terminal illness rider on a very old life insurance policy. It was coming to the end of it’s 20-year level term, and they were about to drop it, when Rich received his diagnosis.

They were guarded at first, because they thought if the carrier found out about the diagnosis, they would drop him! He wouldn’t even provide me with the policy number. We spoke in terms of “what ifs.”

Over the next few weeks, we spoke a few more times, I sent them the paperwork to begin the process, and they said they’d contact me if necessary. A few months later, they did.

Rich’s employer kept him on through his chemotherapy treatments for as long as they could, but as his treatments increased, so did his absences from work. They could no longer continue paying him.

Rich and Mary had very little in savings and two children in college. Mary’s mother had recently passed away in a Medicaid facility. She had no long term care plan and had been battling Parkinson’s for 8 years. Rich and Mary had helped out financially as long as they could, but Mary was diagnosed with breast cancer and their funds were exhausted. (Mary is in remission after 2 years of treatment).

They had nowhere to turn, other than an estate planning attorney, who recommended them to the advisor, who then recommended I speak with them. Rich had already read through every line of his life insurance policy, and knew the death benefit acceleration might be an option.

I called the carrier, and it took two weeks to get a return call with the name of a contact person and a processor. Meanwhile, Rich completed the forms and notified his oncologist that we would need a statement and medical records. Telling Rich what we needed was one of the most difficult things I have had to do.

Last week, the carrier's claims person emailed us and said they would pay 50 percent of the $600,000  death benefit, minus an 8 percent one-time loan. Rich and I knew that was what the new policies offered, but  his policy said it would pay “up to 100 percent.” I told the carrier's claims processor, that 50 percent was unacceptable, and we wanted 100 percent. Within an hour, he called back and said that he sent it up the ladder and they would paying 100 percent! (We got an “exception”)
 
Rich and Mary requested a wire transfer, and $549,000 was transferred in to their bank account. I immediately received an email from them that said, “Success! We are forever grateful to you, and don’t know how to thank you. We would like to meet you in person and thank you face to face. Red or White?” 

They came to my home and brought the basket pictured. They were so grateful for what we were able to accomplish. They said they told all their friends NOT to drop their life insurance and shared their story… then, they were off to celebrate at White Castle!

Mary and Rich now have enough money to last them a few years. He has another life insurance policy that they will keep inforce, and Mary has one that I will review for her. The advisor is meeting with them to help stretch the money with some investing, and the estate planning attorney is working on their estate plan. I will work with Mary on a long term care plan, and she will introduce me to the estate planning attorney.

There are days when the work we do is frustrating and difficult, but seeing how these wonderful products we sell work in real-life, is truly rewarding! It makes all that frustration and difficulty worth it.

Tuesday, February 12, 2019

Athletic Heart

Since February is American Heart Month, we thought it was a good time to talk about Underwriting the Athletic Heart. How many times have you heard a client say, "I'm in excellent shape... I'm a runner... I'm a weight lifter..."? So, you submit the application and are surprised to learn that the case is not preferred. How can this happen to a perfectly fit and athletic applicant?

The changes that occur with an athletic heart, which are also referred to as cardiac remodeling, are not felt to be pathologic and so a true athletic heart usually should not be associated with an increased mortality risk.

Endurance training results in dilation of the heart and can cause an increase in the thickness of the heart muscle. This type of training (also called dynamic, isotonic or aerobic training) includes cycling, swimming and long distance running. The pattern of combined dilation and thickening of the heart seen with endurance training is called eccentric hypertrophy.

Strength training (also called static, isometric, anaerobic or power exercise), which includes wrestling and weight lifting, exposes the heart to large increases in blood pressure. This predominantly results in increased wall thickness, known as concentric hypertrophy. Engagement in both endurance and strength training can result in a mixed pattern.

While it can sometimes be difficult to differentiate an athletic heart from pathologic cardiac  conditions, the results of cardiac testing can provide clues. For example, diastolic dysfunction, which is a stiffening of the left ventricle, should not be present on echocardiography in an athletic heart. If there is hypertrophy localized only to the interventricular septum, which is the heart muscle that separates the left ventricle from the right ventricle, one should suspect the presence of hypertrophic cardiomyopathy, a primary disease of heart muscle.

Read the full Underwriting Dialogue from Legal & General America