Life Happens

April  13th, 2024

Episode Transcript

(00:00):
And I will bring him right onright away, the inimitable Bob Vandy,
our former co host who is nowa guest Morning Bob, good to be
here, Lou good to be here, inimitable Wow me Yes, and Bob
is if if you recall in theinsurance industry, one of the leading agencies
around the state and the country advisorsinsurance brokers, right here in Clifton Park,

(00:25):
New York. But you guys arenational. We are, yeah,
we are. We're very fortunate.I mean, we started as in a
little bit of what was then acottage industry of long term care insurance back
in ninety two. I remember itwell when I was there. That little
thing called the New York State Partnershipcame into being, and we were in
the right place at the right time. Kevin and already had great insight into

(00:45):
and foresight, I guess, isthe better way to put it. And
we've been very fortunately we've grown alot since then, both geographically. Then
we were just in New York Stateand just doing long term care. Now
we do, you know, wework with advisors all throughout the state and
the country. As you said,you know, anything to do with long
term care insurance, life insurance,disability, insurance, annuities. You know,
we've been very fortunate. So,yeah, we're all fifty states and

(01:07):
you work through agents. So you'rea wholesaler and a retailer. Yeah yeah,
talk a little bit about that,that your agency networking just the breadth
of what AIB does. Yeah,no, I appreciate it. We do
some most of what we do aswholesaling. We our job in the purest
sense, is to work with youragent, that is our listeners, your
agent, your financial advisor who maybethey don't have the subject matter expertise on

(01:30):
the insurance side, we step inand we provide that support to them as
well as the products. You know, we work with over forty different insurance
carriers, so we're able to gotake off the shelf whatever is the best
product that's going to fit each clientsituation. And then we have a couple
of people in the house, BrianJohnson being one of them. Obviously,
Brian our former co host as well. Brian does a lot on the retail

(01:51):
side of things. You know,he does a lot in terms of personal
production as well as wholesale support thatwe do as an agency, So we
get kind of both both sides ofthe fence, it work. And from
a lawyer's perspective, and I amone. When you have someone on the
financial side of things that can dojust about anything in the insurance side and

(02:14):
has every product and every company availableto them, it makes a big difference
because it isn't the old one sizefits all. And if all you have
is a hammer, what does everybodylook like? They look like a nail.
They look like a nail, forsure. So when you have the
ability to customize a plan, andthat's what we do with our trust planning,
and that's what we do with ourestate planning, and you can fit

(02:35):
the right insurance products into that estateplan, you're way ahead of the game.
And we were just listening to thenews, as I hope you were
as well, and they're talking aboutthe budget. Well, it's how many
days late? Fourteenth thirteen days latenow today being April thirteenth, is supposed
to be done by April first.And what they're fighting about right here in
Albany, Folks, if you hada camera f C Span wasn't the New

(02:59):
York State legislature, you would hearthem fighting about medicaid. And we've had
people on here. Al Cardillo,who's with the Homecare Association of New York
State and home Care is on thechopping block different aspects of it. And
when you're looking at it, ninetysix billion dollars is the medicaid budget in
New York and that's about forty percentof the overall budget, so that's a

(03:23):
big number. So they're looking tocut cut and they're looking to take programs
off the table. And one ofthe programs that we're very, very worried
about is called the consumer directed PersonalAssistance Program, which is what many of
our clients use to find people whowill work for in home healthcare. The
big job right now is finding homehealth aids. Very difficult to do.

(03:45):
But when you're out there and you'relooking and you're competing for home health aids,
and that's kind of what happens ifyou or your loved one needs care
in the home and you can't findpeople. You call up every agency in
your community and they're just the showsare bare, they don't have staff that
they can put out there. Thenyou have to go find someone and how
do you pay that person, howdo you bring them in? And what

(04:09):
I have found and what part ofour topic today is going to be that
cash is king. When you havedollars and you can hire people, you
will find them. If you canpay the right price and you're not wedded
to a fixed rate in a Medicaidreimbursement system, it's much easier to find
help. And Bob the insurance industryfrom nineteen ninety two when I watched Marty

(04:33):
and Kevin shake hands and you dothe deal back in nineteen ninety two,
and it's grown a lot, butit has changed a lot over the years.
Sure has some of it for thegood, some of it for the
not so good. I think atthat point in time, in the early
nineties, it was still very muchin its infancy, lou So there was
a certain amount of you know,how we're going to do this thing,

(04:54):
and as important, how we're goingto price this thing that is long term
care naive tay of the insurance companies. Yeah, it's at that point,
you know, the things that haveWithout getting into the weeds too much,
you know, there were two reallybig factors. If you flash back to
say nineteen ninety and you look atthe prime rate back then, you know,
interest rate discussions being what they arehere of late. You look at
interest rates back then, which isreally a big number in the insurance industry

(05:16):
because the insurance companies have to investtheir money very conservatively, so bonds is
what they invest a majority of theirmoney in. So interest rates become very
important when you're trying to project outten, twenty, thirty, forty fifty
years. And so they were goingby what they thought interest rates were going
to be based on what they werethen. And then they also looked at,
well, how many people are goingto keep their policies over time,

(05:39):
and because the industry was in itsinfancy at that point, they really didn't
have a lot to go by.So what did they look at. They
looked at life insurance that had beenaround a long time and disability insurance which
had been around for quite a while, and they that's the number we call
the lapse, yeah, the lapserate or the persistency rate. And they
got it wrong on both counts.On the intro straight side of things,

(06:00):
you know, we thought interest rateswere going to stay at what were higher
levels then, you know, dependingon when we look at it might have
been five and a half six sixand a half percent at that point.
And then what we found was atthat point go forward, they dropped precipitously
and more to the point, theystayed low. So that has a really
big impact on your invested reserves andthe things that you assume within your pricing.
And then when you think X percentof people are going to drop their

(06:25):
policies over time, like you know, roughly speaking, they use like ninety
two, ninety three, ninety fourpercent they figured would keep their policies,
so six seven percent roughly lapse rate, if you will, And what they
found was that ninety eight to ninetynine percent of people kept their policies.
And as we've talked about on theshow before, that that's great from the
standpoint of more people having coverage whenthey need it. It's bad news from

(06:47):
a pricing standpoint because that increased percentageof people keeping their policies means increased claims.
So there was this perfect storm ofsorts that took place and has led
to, unfortunately, some rate increasesthat WED and anticipate. And we're going
to unbundle this and look at theproducts that are on the shelf today that
are really good, innovative, uniqueproducts that provide both life insurance coverage and

(07:11):
long term care coverage. So thehybrid policies and the writers that are out
there have really captured the market.And we'll get into that with some specificity,
but I like reminiscing. So goingback to the nineties, when Medicaid
was kind of looked at as apayer of last resort and people were being

(07:31):
encouraged to ensure their own risk andthe cost of care was another factor that
no one anticipated that today a nursinghome would cost over two hundred thousand dollars
a year. How do you ensurethat? I mean, how do you
pay for that privately? So theonly payer beyond your private insurance is Medicaid,

(07:54):
And we talk about Medicaid on thisshow all the time. Go to
our website you'll see webinars that we'vedone over the past year Medicaid Monday webinars
where we break apart in the Medicaidprogram how it works. But you have
to spend your assets down to qualifyfor Medicaid or give them away one or
the other. And that's the Medicaidplan and a Medicaid trust that our firm

(08:16):
does. But in nineteen ninety two, ninety three, I think actually the
partnership launched, and we have topay homage to our good friend who passed
away this past year fairly recently,Gail Holabinka, who was one of the
designers of the New York State Partnership, and she was brilliant in this space.
I mean, she was one ofthe top ten people in long term

(08:37):
care insurance in the country. AndGail was a visionary. She looked at
this and said, Okay, sowe have private dollars over here and we
have medicaid dollars over here. Howdo we make them work together? And
the partnership just explained it to ourlisteners how that worked and why it was
so unique. Yeah, and weonly wish that it was as a robust

(08:58):
today as it was than lou whichunfortunately it's not. Right now, we
can talk about that as well.But yeah, the partnership and the vision
that Gail and others within the partnershiphad was if you have that dual pronged
financing approach where you have private financingand you have public financing, private financing
through insurance, public financing through abackstop with medicaid, would we be able

(09:20):
to save some money with Medicaid thatwas the goal, and that has been
the goal where we've looked at itand it's worked where it was supposed to.
But what it basically said was you, as a New Yorker, Lou,
you buy this particular long term careinsurance policy that meets these criteria,
these design characteristics. You are fulfillingyour personal obligation. Right you do the

(09:41):
front end, You buy this policy, and if you exhaust your benefits under
this policy within the qualifications that weset forth, and you still need care
at that point, whether it's athome, whether it's in a facility,
whether it's in assisted living, andyou're receiving care there, then you could
apply for what we call Medicaid ExtendedCover Bridge, and Medicaid would disregard your
assets, usually totally. There weresome newer generation policies that did something called

(10:07):
dollar for dollar, but most ofthe policies on the books were total asset
protection, meaning you could use upyour benefits, Medicaid would step in.
They'd still look at income, butyou wouldn't have to spend down your assets.
The way you described a couple minutesago. What a concept that you
fulfill your personal obligation and the statepicks up the balance and we did some
research on this and we actually,through Gael, the New York State Bar

(10:31):
Association launched a program back around twothousand and five that was called a Compact
for Long Term Care, which Gailwas trying to take the partnership and extend
it to people that were maybe unensurableor people that couldn't buy a policy,
to allow people to private pay touse their own money upfront again front end
loading this and we did a study. Milliman, which is an actuarial company,

(10:54):
did a study to show that onlyabout seven percent of people would lack
through that pledge period, that attritioni e. Death would occur and people
would not get to the Medicaid benefit. So, unfortunately, those policies are
no longer available in New York State, but for those that have them,

(11:18):
if you have a partnership policy,dust it off, read it, don't
give it up. Pay the premiums. It's like gold. And I've had
people come in and say, well, should I stop paying the premiums?
And as soon as I see thepartnership logo, I say, no,
you need to keep this because youget double coverage here, you get your
insurance benefit, you get medicaid.You don't have to gift that way all
your assets. You can keep yourincome. Well, your income is on

(11:41):
the block. We can talk aboutthat, but the partnership was the original
solution New York State came up withto this problem. We're going to talk
about solutions that are on the tabletoday. What can you think about today
right now? What can you shopfor? What can you buy that will
protect you, protect your assets,get the coverage that you need, and

(12:01):
allow you to go out and hirethe best help you can find and pay
for it. So we're gonna takea short break. Bob Vandy Lupiro back
in the booth together, two ofthe three amigos. You're listening to Life
Happens Radio. We'll be back rightafter this short break. Right We've going

(12:31):
to open up the phone lines ifyou have questions on long term care,
long term care insurance, life insurance. We have the experts here. And
I've worked with Bob for twenty fiveplus years and it's been a great ride.
And when I think of people thatI trust in the insurance industry,
I'm looking at them right here,one of the few. So it's great

(12:52):
to have you back, Bob andThe number to call if you want to
call in is eight hundred talk WGY. That's eight hundred eight two five five
nine four nine again eight hundred eighttwo five fifty nine forty nine. I'm
Loupiro in studio with Bob Vandy.We're talking insurance and Bob, we have
an event coming up, the ElderLaw Forum. This is our twenty ninth

(13:16):
annual. Not Possible, Not Possible. UH. Started when I was sixteen,
and so the Elder Law Forum isan event that has just grown and
we are very fortunate. We haveLieutenant Governor Antonio Delgado who is going to
give our keynote address. We havefour members of the New York State Legislature,
including the chairs of the health committeeson both the Assembly and Senate side.

(13:39):
We have local Assemblyman John McDonald,Jacob Ashby, local Senator, and
Ashley John is going to be JohnMcDonald's going to be with me next week
on the radio and we're going totalk about the state budget and all of
the issues, and Medicaid again ison the chopping block. But you are
going to be on that panel withsomeone coming in from nationwide, Sean Britt.
So just talk a little bit aboutwhat you're doing and nationwide products,

(14:01):
which I think are some of thebest in the market right now. Yeah,
without question, I would say that'sthe case both here in New York
and outside of New York. LouAnd I'm thrilled that I could get on
Shawn's dance card where she could comeout and present. Always good to hear.
She's a thought leader in our industry. She's a national so she does
this all over the Country's when ourpeople in our industry are looking for those

(14:22):
thought leaders in our industry to say, hey, what's going on? Who
did they talk to? Sean isone of those people that everyone across the
country looks to. So we're reallyfortunate to have her here in town.
And yeah, our discussion is goingto revolve around insurance. It's going to
revolve around as you are alluding to, Lou, It's going to evolve around
what's there today, because, likeyou said, we were reminiscing, and

(14:46):
it's nice to reminisce about what wasgoing on in the nineties or the two
thousands or even the twenty tens,but for people who are planning today,
it might not hold the same charms. So in the spirit of tell me
what I need to know and tellme what's available to today. That's what
we're gonna do when we bring Seanin. We're going to kind of approach
it from a Q and A standpoint. I'm going to interview Sean really and

(15:07):
I'm gonna say, Sean, giveus your window of the world. What
do you see as going on todaywith products? What do we as an
insurance industry need to be doing better. How do we best work with other
disciplines, whether they be legal disciplines, working with attorneys, working with tax
people, really across the board.How do we mesh because it's such a
complex topic, long term care ingeneral, and so it'll be really good.

(15:30):
Well we'll talk about what's going onand what we need to do.
I mentioned your name and open thephone lines and we have Robin Albany on
the line. Good morning, Rob, Hey, good morning, thanks for
taking my call. Two quick questionsabout you know, maybe whole Life insurance.
And the first one is I camein a little in the middle of
the show. You were talking aboutinterest rates and how they were down.

(15:52):
I'm assuming you were referring to itone time, so I was wondering if
you could recap on what product thatwas. And then secondly, just a
question on you know, whole lifeinsurance and you know the I was looking
on an illustration recently and it's amazinghow the cash value was very interesting.
I love seeing that cash value buildup on let's say, like a twenty

(16:15):
pay and how it continues on youknow. My question on that one is
the interest rate that continues to youknow, build that policy plus dividends that
that go along and help that thatgrow. And just with the interest rates
where they are today, if ifyou walk into a whole life policy today,
let's say on a twenty pay,would that interest rate you know how

(16:40):
what would affect the cash flow?Is my question? And then if you
wouldn't mind reiterating what you talked about, you know, the lower interest rates
earlier, because as of right now, obviously interest rates are high and they're
you know, I believe they're notgoing to be lowered anytime soon, just
based on what's taking place. Butwe'll call it the pre COVID interest rates,

(17:00):
because post COVID, the interest ratesshot up for variety of reasons,
and we had about a ten yearstretch, but the interest rates were down
around. You know, the federalrate was about one percent. Yeah,
well we dipped down. It wasalmost zero during the heat of COVID.
And thanks for the call. Roud, appreciate you calling in a little bit
to unpack there. But yeah,let let's talk about interest rates, and
thanks for saying that. Let meclarify what I was getting at with the

(17:23):
with what we've seen happen with ratesfor long term care insurance, in particulars
that rates have gone up. Therate for long term care insurance today compared
to if you were buying the samepolicy fifteen years ago, we'll say is
probably three x. So it's probablythree times today was it what it was
then? And part of that hasbeen and it's a little counterintuitive. Part
of that is because interest rates wentdown and stayed down for so long compared

(17:47):
with what the actuaries thought they weregoing to do back in nineteen ninety nineteen
ninety five. And just to clarify, Bob, this is an interest being
paid to the insurance company, right, not their policy. Yeah, they're
earning on their reserves and that factorsinto the rates that they set for the
insurance. So that's what I wasgetting at there. Rob was that was
what was going on at that time, and you alluded to that flash forward.

(18:11):
And what we've seen is, yes, interest rates went down and stayed
down for a long period of time. They have started to creep back up
obviously these last couple of years sincethey really went down during COVID, we
have seen as we well know,there's so much discussion about inflation, and
inflation and interest rates are intertwined ofcourse, so we have seen rates come
up. That's good news for say, long term care insurance rates. In

(18:33):
other words, if I buy apolicy today, what's the likelihood that I'll
have a rate increase on that policyin the future. To the extent that
interest rates go up compared with thetime that I bought the policy, there's
less opportunity for rates to go up, or less likelihood that rates will go
up. On the whole life question, yeah, the cash value in a
permanent life insurance policy, or specificallywhole life policy, cash value is made

(18:57):
up of two components. There's aguaranteed cash value and then there's a total
cash value. The difference between thetwo of those, as you alluded to,
Rob, is dividends. And whilethere is a very conservative low low
interest rate that goes into the guaranteedcash value in a whole life policy.
Those won't change. They're guaranteed,so you know you're going to have at

(19:18):
least that much cash value in awhole life policy. What we don't know
is how much dividends are going tobe earned within that policy. That can
fluctuate over time, and interest ratesthat are prevailing over time. As they
change, those dividends scales and dividendrates can change as well. So if
interest rates go up, the dividendcredited to those policies can be higher.
Interest rates go down, dividends couldgo down as well. So that's an

(19:41):
encapsulated view. It's a little bitmore complex than that, but that's basically
a bird's eye view. To theextent we have higher rates, which,
as you alluded to as well,Rob, that's what we've seen the last
couple of years. That's certainly goodnews from a policy performance standpoint with whole
life and other policies. So hopefullythat answer the question you're pay question.
I'll just touch on that real quick. The big advantage to a twenty pay

(20:04):
in other words, whole life generallymeans that I have coverage for my whole
life, and I pay premiums formy whole life. But insurance companies are
pretty creative, and one of thethings that they have come up with is
what's known as limited pay. Ican take that lifetime of premiums and compress
it into ten years, twenty yearsout to age sixty five, and by
doing that, I basically juice upthe cash value of the policy earlier on

(20:27):
in life. So it from acash value standpoint, it actually performs better
than if I were to spread outthose same amount of aggregate premiums over the
whole of my life. Rob.So, I hope that answered that question
as well. Still with us,Rob, No, I think we might
have lost them. Just to takeit one step further, when you look

(20:48):
at taxation, life insurance is avery tax favored asset, you bet,
unlike iras. We talked about irasall the time, is a tax hostile,
tax time bump. Somebody's got topay a boatload of tax on your
traditional IRA four one k at somepoint you or your beneficiary yep, And
we have the Secure Act. Nowyou have to draw it out over ten
years. Life insurance death benefits aretax free, income tax free correct,

(21:11):
And the cash build up in alife insurance policy is also tax free unless
you cash the policy out, soyou get dividends. That depends on the
company and what the dividend rates are. What are the common rates right now?
What are you seeing for guarantees andthe current dividend credit? Well,
I try not to focus too muchon that part of it, Lou only

(21:33):
because there's more than just interest ratesthat go into the calculation of a dividend.
But five five and a half percentis probably what is being internally credited
in these policies, which is prettyconservative. It's your CD rate, yeah,
or but it's tax free, Yeah, it's income tax free. And
what you want to to Rob's point, and with the limited pay, you
could theoretically dump one premium payment intoa permanent life insurance policy whole life or

(21:57):
otherwise and be done with it.In other words, don't pay twenty years,
just play pay one year. Theproblem with that is that when you
do that, typically you're creating what'snot as a modified endowment contract. You
don't want to do that if yourgoal is to potentially take money out of
that policy, out of the cashvalue later on. Yeah, so you're
going to take it one more callbefore the break. Okay, So we

(22:18):
got a couple of minutes for Cherylin Boston, laked morning. Cheryl,
my husband and I have the NewYork State Partnership. We've been paying it
for ten years. But as weget to our older years and if we
want to move to where our childrenare in Louisiana or Florida, do we
give up the policy and we've alreadybeen paying on it. What happens?

(22:41):
Bob is going to take that andhe mentioned earlier something called dollar for dollar.
Yeah, short answer, Cheryl isno, hang on to that policy.
And here's why. First and foremost, all the long term care policies
out there, whether they're the traditionalpolicies of the partnership we've been talking about,
or even the policies that I thinkwe'll talk a little more about in
the second half of the show,the life products, even in some states

(23:03):
annuity products that have long term careriders. Those benefits for long term care
are completely portable. You can usethose anywhere in the country, and even
some of them you can use internationally. What isn't quite as portable is the
asset protection provided by the partnership.And I say that with air quotes,
because if your policy is a totalasset protection partnership policy here in New York

(23:25):
State, you would need to bereceiving care and apply for medicaid here in
the state of New York to haveall of your assets protected. However,
if you move to Louisiana, thatdoesn't mean you lose it completely. Louisiana
is what's known as a dollar fordollar partnership state, so there is portability
or what they call reciprocity between NewYork and these other states that says,

(23:48):
well, you can take your partnershippolicy with you. You won't get the
total asset protection. If you exhaustyour benefits in the policy and then apply
for medicaid, you'll only get dollarfor dollar asset protection, which means that
if my policy pays out let's say, three hundred thousand dollars over a over
a two year period or whatever thenumber might be, then that's the amount

(24:08):
of asset protection that you get.Stay tuned, Cheryl, because I'm going
to give you a way to protectall of your assets when we come back
after the news. Because very often, Bob, we're combining the estate plan
with the insurance plan to reinvent orrecreate, reinstitute a partnership, confert especially
now, and we'll come back afterthe news and explain that we have some
other callers on the line. Staywith us. We'll take your calls when

(24:30):
we come back. Thanks for listeningevery Saturday morning to Life Happens Radio here
on wg I'm just a poor boy. Oh my story. Welcome back to
Life Happens Radio. I'm gonna Puroyour host for this morning in studio live
with mister Bob Vandy, and we'vehad some great calls. We have two

(24:52):
more callers on the line. Feelfree to call in. It's eight hundred
talk WGY. That's eight hundred andeight two five and Bob. We've have
educated people all over the state andthe country on how to do planning and
how to integrate insurance into the plan. In the old days, the insurance
industry and the elder log community wereat odds. You had to do a

(25:17):
Medicaid trust and don't buy insurance,it's bad, or one of the other
you had to buy insurance and don'tdo a Medicaid trust it's bad. But
they're actually like peanut butter and jellyand When you put them together, they
taste pretty good. So you canget the insurance coverage that you need.
And we're going to talk indemnity coveragehere versus something called reimbursement's a whole that
thought. But we do a MedicaidAsset Protection trust that takes your exposed assets

(25:41):
and protects them and gets you backwhere you're Medicaid eligible, but it still
gives you the money to pay forcare privately where you're going to be better
served than trying to fit through theMedicaid portal. That's really the big difference.
If you have cash, you willfind help. If you're going for
Medicaid, you're going to have troublestaffing. The case comes down to that.

(26:02):
It's that simple. So a MedicaidAsset Protection Trust in addition to your
policy. And this works in Louisiana. It works in all fifty states.
I know because we have a productcalled Elder Council that does trust in all
fifty states and they work, soyou can protect your assets and still have
the insurance coverage. We have Jackand albody on the line. Morning Jack.

(26:25):
Yeah, how you doing, guys, appreciate the call. Could you
help me understand better what the benefitsare for owning insurance type products versus doing
things on my own. I haveall sorts of products, but when I
talk with my friends about it,they tell me I'm crazy, I'm wasting
all my money. And I reallywant to be able to answer the question

(26:47):
why this is so beneficial to youdo from a tax perspective, from a
long term care perspective, from awhole host of things. Because my friends,
they're pretty smart guys, they think, but they think I'm crazy for
all of the type of policies Ihave, and I just wonder if you
could help me better answer the questionsthat come up. I say, boy,

(27:07):
I don't believe in life insurance.Hey, appreciate the call. No
question about let's I think we'll let'slook at it from purely from the long
term care planning standpoint Jack, whichis, Okay, do I really need
this long term care insurance stuff?What I would suggest is look at it
from the standpoint of what does insurancedo? And what I mean by that
is what insurance does, regardless ofthe type of insurance we're talking about,

(27:30):
is it allows me to take arelatively small amount, typically on an annual
basis. We call that a premium, and it allows me to buy a
much larger amount, which is thepolicy benefit, so that when the insured
event occurs, I have a bigpot of money that I can tap into
to pay for whatever that loss iswithout having to go into my own pocket

(27:52):
and do it. So I guessthe main point there, Jack is if
you don't think you're ever gonna havethe insured event, you're right, then
insurance is a waste of money.The problem with that thinking is that we
just know that that's not the case. Now, we hope it's not the
case. We hope that you don'thave that insured event, But there was.
And I'm gonna get these statistics fairlyclose. But let's take homeowners insurance

(28:15):
for example. Who would ever thinkabout going without homeowner's insurance? Well,
sometimes if you're borrowing money, youhave to have it because the bank tells
you. Now, why would thebank insist that you have it? Because
the very thought of you losing yourhome to a fire is unpalatable for the
bank. They know that they wouldhave difficulty recouping the money they've loaned.

(28:36):
Well, the likelihood of having aloss of your home by fire is minimal.
I don't know exactly what the numberis today, but it might be
one out of five hundred or oneout of a thousand. Similar with car
insurance, who would go without carinsurance? Well, the state of New
York says you can't go without carinsurance, you have to have it.
But if the state reversed that lawtoday and said nobody has to have car

(28:57):
insurance anymore, would everybody dropped theircar insurance? Probably not, because they
know that they couldn't withstand either theproperty damage or liability loss if they had
that insured event. It's really thesame with long term care. With long
term care, the problem is thelikelihood of needing long term care at some
point is a heck of a lothigher than it is that you're going to

(29:19):
lose your car, total your carin an accident, or lose your home
completely by fire. So that's whereit becomes problematic, is if I don't
ever think I'm going to have thatinsured event, You're right, it's arguably
a waste of money. We justknow better, We know that's not the
way it works. So people thenturn around, they pay a much smaller
premium amount pennies on the dollar,as we often put it Jack, I'm

(29:41):
willing to pay pennies today to knowthat I have dollars in the bank later
on if I need them. Andthat's basically the way all insurance works.
Do that makes sense. Yeah,appreciate the insight, guys, and if
your time today, Just to adda conversation here, because a lot of
people life insurance. If you're thirtyyears old and you and your spouse are

(30:04):
working, and you have three kids, and you want those three kids to
go to college, the cost ofa four year college degree right now is
approaching one hundred thousand dollars a year. That's four years, that's four hundred
thousand, that's three kids. That'sone point two million dollars that you need
to pay for college for your kidsif you want them to go to Harvard,
Yale or not community college. Somost people when they have that first

(30:26):
baby start thinking, Okay, I'mnow a responsible adult. I have this
life that I brought into the world. I'm responsible for. So I'm going
to buy a term life insurance policybecause I need to cover maybe the next
twenty years, and if something happensto me over the next twenty years,
I need to have this cash inplace. Excuse me. So a lot
of people think, buy term andinvest the rest. You know, take

(30:48):
your money, pay the premium onthe term policy, put your money in
an investment, whatever that might be, and you have your life insurance coverage.
I'm someone who had a term policy, twenty year term policy. I
got to year nineteen and I hada quintuple bypass surgery and I couldn't get
any more life insurance. Guess what. You've got to be insurable to buy

(31:10):
a policy. But my term wasconvertible. So I went to the market
who's sitting in front of me,and I said, Okay, I need
to convert this policy, and Ineed to find a permanent product because I
still need life insurance. No,I still have a mortgage, I still
have a business that needs coverage ifsomething happens to me. So we converted
it to a permanent policy. Everyone'ssituation is unique. Everyone's situation is different.

(31:33):
I can explain the tax aspects oflife insurance till I'm blue in the
face. If you get to thepoint where you're very successful and you've had
taxable estate, life insurance can bea state tax free if structured properly,
very easily. So it does havea lot of leverage, and that's really
what we're talking about risk and leveragingyour dollars to cover that risk. The
last thing I'll leave you with,Jack, if you don't mind, is

(31:56):
be cautious there. You know,we love our friends, and I don't
know anything about your friends, andlike you say, they're pretty sharp people.
But I'll actually have conversations with financialplanners sometimes where they'll indicate that they
don't think that, for example,long term care insurance. They don't think
their client needs long term care insurance, and I would suggest to them,
well, is that your personal opinionor your professional opinion, because if it's

(32:21):
their personal opinion, don't take thisthe wrong way. But I kind of
don't care. If it's their professionalopinion, I'll say, Okay, I
respect that. Go ahead and putthat in writing for me, if you
would, so that if anything doeshappen later on where I took your advice
and I decided not to ensure againstthat risk long term care, otherwise,
I have something that I can takeout and say, or my family does
that says, gee, you toldme I didn't need this, Well now

(32:44):
I need it, So now whatdo we do now you talk to my
lawyer. Yeah, so just justbe cautious there, I'd say Jack,
all right, Jack, thanks forthe call. Thank you. We have
Keith and Clifton Park morning. Keith, welcome to the show. How can
we help you? Well, goodmorning. I was on the road and
I felt compelled to call in becauseI have a tremendous success story related entirely

(33:05):
to today's content. Excellent. Youhave been describing my life for the last
nine years, nine and a halften. I had two parents. Both
had total asset protection partnership plan.My mother was in a nursing home for
a little over three and a halfyears. I had to put her on

(33:30):
Medicaid. It was an easy,peasy process with the partnership plan behind me.
She has since passed. My fatherthen failed. I used Nora,
who was affiliate with Loo's office atone point. Maybe she still is.

(33:52):
She has retired, but he herhome care advisors is still there and that's
the group that she was heading up. Well, I used her to help
place my father. It was astress free environment. It was very helpful.
I'm a lawyer, but I don'tdo this kind of work. And
having the expertise that she offered inyour office offered was just tremendous. My

(34:17):
dad now has been in a nursinghome for over three and a half years.
His long term care benefits have beenexhausted, and I recently had to
put him on Medicaid. And again, it was actually pretty easy peasy,
a little more complicated than for mymother five years ago, but having the
Total Asset Protection Plan partnership was thebest investment in my parents ever made.

(34:44):
And using Nora to help place mydad was one of the best decisions I'd
made in the last five years.And I just wanted to let you guys
know that everything that you are saying, you know, it touches me deeply
because it's been my life. Itwas very helpful. Well, Keith,
that's a that's a great testimonial andan excellent call, and I thank you

(35:05):
for that. And we didn't payhim either. Folks. Well, I'm
not a paid endoor, sir,But there are two insured events that you
know, they're they're certain and ifyou think about fail and you're going to
die, if you think about thecost of a nursing home today, it
is folks, I'm not this isnot a fabrication. This is you write
a check for about sixteen thousand dollarsa month today if you're private, paying

(35:29):
good and sixteen thousand is two hundredplus a year. So if you add
up three and a half and threeand a half, that's seven years at
two hundred thousand dollars. That's onepoint four million dollars that it took to
keep your parents safe and in anursing home. And now you have Medicaid
behind that, and you had theinsurance coverage while you needed it. So

(35:50):
that is what the That was theparty of the partnership, and that's why
you know, I have so manygreat memories of Gail Halabinka doing presentations on
this and she was just brilliant,and you just laid it out as well
as anybody can lay it out.There's the value. Thank you appreciate that,
Keith, Yeah, thank you all. Yeah, thank you for a
great weekend you as well. Appreciateyou calling in and sorry to hear about

(36:13):
your mom, and best of luckwith your dad. Hopefully things go okay
for him. So it's a challengingenvironment that you that you're in, and
I wish you the best of luck. With it, we're going to turn
our attention to life Insurance next Keith, great call, Thank you so much,
and again if you want to giveus a call, it's eight hundred
eight two five five nine four nine. We're gonna take a short break and

(36:34):
when we come back, I'm gonnagive you some announcements. We have some
programs coming up, including the nowfamous Elder Law Forum. Folks. We
get over one thousand people at thisand you can attend either live or virtually.
It is a very intensive day.If you want to really see what's
happening in healthcare and long term care, this is the show to watch,
and you can do it from thecomfort of your own home or office,

(36:57):
and we'll show you how to signup when we come back. Listening to
Life Happens Radio with Bob Vandy LouPiro. We'll be back after this short
break. Simon and Garfund on Saturday. Is it somebody's birthday, like Paul

(37:20):
Simon's birthday or something? I lovePaul Simon? So was this your request
or no? Now we're greeted,Well, I just hit him. They're
you know, they're they're good.Baby Boomer music got it and that's who
we service primarily and that's who weare, and that's who we are.
So I want to give you aheads up that we have a program coming
right up. It is actually thisTuesday, April sixteenth, day after TAXT

(37:46):
Day. So once you file yourtaxes, come join us for dinner at
the Desmond and we're going to betalking about securing your future with legal and
financial planning. And it's our lawfirm, myself, my partner, Aaron
Connor, and Dave Kopeck. Allright, David one of the other WGY
personalities, and yes he is one, and Dave is going to join us
on Tuesday evening. We hope youcan too, and you can sign up

(38:09):
starting registration at five thirty dinner inprogram at six. You can sign up
right now by calling the Seminar hotlinewhich is five one eight six two eight
four two five five. I'm sorryto give you so many phone numbers five
one eight six two eight four twofive five. You can call our office,
you can email us info at pyroldot com, or you can go

(38:30):
right to our website or WGY's websitewgy dot com or pyrol dot com.
A lot of ways to sign upjoin us Tuesday, securing your future financial
and legal planning. We're going toput it all into the mix and hopefully
give you a good education. Sojoin us, Bob, you and I've
done some of those, Yeah,turned out very well over the years.

(38:51):
And the Elder Law Forum May sixteenthagain. If you want to sign up,
go to pyrolat dot com. Eventsyou can register right online. And
life insurance, and we were bringingin Sean britt And Nationwide is a life
insurance company, and Sean is goingto talk about the products and product development.
But long term care insurance, thereare not many policies available companies in

(39:13):
New York state, yep Garently NewYork is a tough state from a regulatory
perspective. But life insurance, thereare many and an infinite variety now of
different kinds of life insurance, whetherit be guaranteed, universal life or variable
life, whole life. Just talka little bit about the different chassis and
how long term care plays in.Yeah, it's very important, and that

(39:37):
should that sounds like it'll be agreat event with you and Dave know him
very well, and do yourself asa favor and sign up for that,
folks. That should be a greatnight. Yeah, the New York,
for good or bad, is definitelya heavily regulated state in a very tough
state to get product approved. Inpart of that has extended to long term
care insurance. In fact, thereare only a few companies that offer traditional

(39:59):
long term care and ship insurance rightnow in the state of New York.
And as we talked about the partnership, even though it's still there in structure,
there are not currently companies that areselling partner on the policies on the
books. But if you structure,the thing about the partnership is it had
a lot of consumer protections, right, and a lot of requirements for the
policies that companies just can't afford anymore, right, right, So if we

(40:21):
flash forward to where we are today, to your point, Lou, yes,
there are although we don't have quitethe number of life insurance policies that
other states do, there's you know, there are policies that we can get
outside of the state of New Yorkthat, for whatever reason, we can't
seem to get approved in the stateof New York. It's that regulatory environment
once again, but there are numerouschoices on that life insurance side. And

(40:43):
you mentioned nationwide. That's why we'rethrilled to have SEAN. They have the
industry leading what we refer to asa linked benefit product, which, technically
speaking, as you alluded to LOU, as a life insurance product. So
I have a life insurance death benefitthat comes from this policy. If I,
for example, if I never needlong term care and I pass away,
there's an income tax free death benefitthat gets paid to my beneficiary or

(41:06):
to my trust if I do needlong term care. And we refer to
this sometimes as the one two fourplan. And it depends on how old
you are in terms of how muchbenefit you get. But you could put
in a dollar in premium, youget a two dollars worth of death benefit
and you get four dollars worth oflong term care benefit. So just rough
numbers, if I had a singlesum of one hundred thousand, I could
get a two hundred thousand dollars deathbenefit and a four hundred thousand dollars long

(41:29):
term care benefit. Now, againit depends on how old you are in
terms of how much you get.But it's that magnification of benefit, multiplication
of benefit that makes these products popular. Why really for two reasons. Number
one we talked about with traditional longterm care insurance the fact that there have
been premium increases. So with traditionallong term care, premiums unfortunately are not

(41:50):
guaranteed. It would be almost impossibleto take a traditional long term care product
and apply a guaranteed premium to thatactuarily speaking. So that's one reason that
people when they're looking at it andevaluating their options, it's traditional right for
me, Well, gee, Idon't like the idea. The premiums aren't
guaranteed. Much more stable today thanthey were ten or fifteen or twenty years
ago, but still not guaranteed.The other part of it is people will

(42:12):
sometimes say, well, ge,what if I never use this? And
to the point that I think Jackbrought up he's got friends, Well,
g, don't waste your money onthe insurance. Well, if you buy
traditional long term care insurance, generallyspeaking, if you don't ever have a
long term care event, the policywould not pay a benefit. It's like
your homeowners or your car insurance.If that bothers you, if you're doing
your long term care planning and yousay, well, gee, if I

(42:36):
don't have a long term care event, I still want a benefit to come
back into my estate. That's whatthey're where the virtue of the death benefit
comes into play. And those productsthat we talk about Nationwides and others,
the premiums are guaranteed, So Ipay my premium either in a single sum
or in the instance of nationwide fiveor ten years, and then I'm done.
My premiums are done, and it'sguaranteed. I'm never going to have

(42:58):
to pay premiums again. So ifyou'll like the notion of having guaranteed premiums
and at the same time having adeath benefit, so if you never need
long term care, a benefit isstill going to come back into your estate.
Those products are very popular. Thelast thing that those products nationwides in
particular, you alluded to this earlier, lou The benefits are payable on an
indemnity basis so important, so important, especially if you're working on that trying

(43:21):
to replicate the partnership and using atrust in an insurance insurance policy together.
I have stumped for that Bob business, as you may remember, for twenty
five years or thirty years, aslong as I saw long term care insurance
because as attorneys, as an elderlawattorney, I work with clients when they're
filing acclaim, you know when theyneed benefit. And I work with clients

(43:42):
at a point in time when they'revery stressful. There is you know,
they're trying to find caregivers, they'retrying to go through this whole process and
file this insurance benefit and then youhave to file monthly. You have to
pay out of pocket and then filemonthly to get reimbursed for the expenses.
And guess what you're going to bepaid? Expenses that the company may not
think or a legit or covered bythe contract. They've gotten better with that

(44:06):
loop at home. But then certainlyif I'm in a facility, for example,
that's an easy one. They're goingto assign benefits to the nursing home
and those I don't have to filemonthly if I'm at home and there's some
question about whether I might get betterokay in that instance, Yeah, they're
going to keep a close eye onthat. Yeah, But I mean right
down to the hours and keeping theschedule of the aids and how many hours
are you getting reimbursed for. It'sa lot, But when you get that

(44:30):
check in the mail, it's money. It's cash. As our friend Phil
used to say, Phil Gollant,you say, get sick, get check.
Yeah, so the same as yourcash is king you were referring to
earlier. You know, you getsick, you get a check. What
you do with that at that pointin time, Well, that's kind of
up to you. You can usethat to offset the cost of care you
might actually be paying out of pocket. You can pay a spouse or a

(44:52):
family member where some reimbursement policies mayor may not allow for that. So
it gives you more flexibility. Plusthe fact you can't use a reimbursement policy
in that trust planning that you weretalking about, Well, that's correct,
but you can't put it into atrust. We have designed a trust.
And this goes back to when theHertford was around. You may remember the

(45:14):
Hartford Life insurance Company. They werethe first to roll that type of product
out. Yeah, they add anindemnity policy and I remember talking to their
one of their attorneys, Rick Blazer, was in the home office, very
bright guy in the insurance industry,and Rick and I were going about,
how do we design a trust toown this contract, which we did,
and I actually got invited to theirnational sales meeting and presented on Trust owned

(45:34):
life insurance for long term care.But what Rick said was, we have
data for two hundred years on lifeinsurance. We know when people are going
to die. I mean, it'spretty statistically accurate. And what they did
then was just measured backwards from thatdeath benefit and say, Okay, we
may have to pay that money outthree years, four years, five years
in advance, but we're going topay it out, So we're underwriting the

(45:58):
death benefit. It's going to bepaid. We know it's going to be
paid. It's just a matter ofwhen. And it made it so much
easier for them to underwrite those productsand the cost of those riders. And
just talk a little bit about thedifference between the link benefit or hybrid product
and just any policy now that youcan slap a rider around. Yeah,
right, the policy the one twoto four plan that I just described,
that's a pretty specific kind of whatwe refer to as linked benefit. But

(46:21):
you can buy one of the lifeinsurance policies LIU that you referred to earlier.
It's a guaranteed premium, guaranteed deathbenefit, universal life variable, universal
life, whole life, even term. In some instances, you can buy
those products, and you can eitherhave a rider that pays for long term
care or sometimes referred to as chronicillness, and you can either pay an
extra premium and preserve one hundred percentof that death benefit to be accelerated if

(46:46):
you need long term care chronic illnessservices, or you can pay no extra
premium at all and they'll discount theamount of the death benefit that you have
available to you later on. Werethese policies in my view? And this
is a different top for a differentday, But you guys do a lot
of tax planning as well. Onthe estate planning side. We've got some
changes in the not too distant future. In twenty twenty six, when we're

(47:08):
talking to people about planning for estatetaxes, we're seeing more and more the
appeal of having these types of policiesheld in an irrevocable trust, where maybe
I want the benefits from the policyto go into the trust, and I
actually want to pay for my longterm care out of pocket. Why would
I do that? Because I wouldbe reducing my otherwise potentially as state taxable

(47:30):
a state, either for New Yorkpurposes or fed purposes. So it just
builds into that flexibility that you've talkedabout. And the reason you would do
that is the time value of money. If you're claiming that during your lifetime
and you're putting it in the trust, you're reinvesting it. You've got the
money invested, not the insurance company. It's in your pocket, not their
pocket. So it's going to buildup value in your trust. We do

(47:53):
work in Massachusetts. I'm designing anddoing one of these trusts right now for
a client who moved from New Yorkto Massachusetts because the Massachusetts a state tax
exemption is two million dollars and withthe death benefit puts her over the two
million dollars. Yeah, so newYork the exemption is roughly seven million dollars
now, so most people don't havean estate tax issue. If you do,

(48:16):
this is a great technique, andtax planning is going to be more
your focus than long term care planning. But this is a way that you
could do both. And who knowswhat will happen in twenty twenty six,
I mean if we do nothing,it basically the estate tax exemption at the
FED level is going to get cutin half, right, correct, So
from the back, maybe that netnow snares more people in the need for

(48:37):
estate tax planning than might otherwise havebeen the case. Absolutely so, if
you're confused, like many people areabout the insurance and the variety of products,
it's it's mind boggling. And sometimeswhen you talk to a person who's
selling insurance, they have one productand it seems simple, But that's all
you get is the choice of one. Talk about AIB and how you work

(48:59):
with the agents and how you shopthe marketplace, and these are personally designed.
These are not one size fits allplans. Yeah, sure, no,
that's exactly what we do. That'sour kind of raison detri if you
will allude that's what we do.Our whole role is to shop the market
and find the most appropriate product,as I mentioned earlier, to fit that
client situation. So there are someof your listeners out there might be thinking,

(49:22):
well, gee, I've I've gota policy. Do I have the
right policy? I don't have anypolicy at all. Who the heck do
I talk to about this? Idon't have an agent or a financial advisor.
Now, if you do, talkto your agent and advisor and have
them get in touch with us ifthey need that expertise. That we bring
to the table. If you don't, or if you just want to have
somebody review what you have, forexample, or if you don't have anything

(49:43):
and you want to investigate further,Hey, what does this mean to me
in my situation? Give our officea call. We'll right in Clifton Park.
You can call the office at fivepoint eight six eight eight eight one
five four and that eight one fivefour that's going to take you to Brian.
I talked to Brian early. Hehandles a lot of the inquiries that
come in over the radio, andhe'll do a great job of evaluating your

(50:06):
policy. He's got a team thatworked directly with him. He'll take a
look at the policy. Hey,does this make sense? Do I need
to make any changes to my existingpolicy? Or I don't have anything now?
Do I need to look at puttingsomething in place? And he'll do
a great job. Give us thatphone number one more time. Sure five
one eight six eight eight eight onefive to four. Bob, thank you
so much for joining me today.It's just like old times, a walk

(50:30):
down memory lane having you here inthe booth. Thank you for joining us,
Thank you for all the great callswe do appreciate them. Every Saturday,
listen to us here on Life HappensRadio. Join us Tuesday evening for
a dinner seminar no cost to youand Dave Kopek, Aaron Conter myself will
be there at the Desmond and Ihope you listen every Saturday morning the talk

(50:50):
radio WGY. Enjoy the weekend.The sun will come out tomorrow, as
the song says, and hopefully it'llbe a good Sunday. Thank you,