Alternate to Costly Long-Term Healthcare Insurance Is Enhanced With New Federal Pension Law, Legacy Financial Says

MILFORD and WORCESTER, Mass., Sept. 28 /PRNewswire/ -- Until just recently, couples in their 50s and 60s have had only two, less-than-ideal, choices when it came to paying for long-term healthcare: buy costly insurance, or do without insurance entirely and risk depleting a hard-earned nest egg accumulated over a lifetime.

A newer alternative, known as Asset-Based-Combination Policies or ABC Policies have now gained further advantage with implementation of the Federal Pension Protection Act in January of this year.

"ABC Policies combine long-term healthcare protection with benefits that include principal protection, a death benefit and interest growth," says Paul J. Mauro CLU, ChFC, president of Legacy Financial Advisors, Inc., a leading financial advisory firm headquartered in Massachusetts (http://www.lfsadvisors.com).

 "Instead of leaving money in a low-interest bank account or CD and then having to pay long-term healthcare insurance premiums for some 20 years, couples can now deposit a single, lump-sum premium in an ABC Policy to provide for care whether at home or in a nursing facility," explains Mauro (hi-res photo at: (http://bit.ly/paul_j_mauro_clu_chfc).

"What's more, provisions of the Federal Pension Protection Act that went into effect in January of 2010, favor ABC Policies by simplifying income reporting and adding tax advantages. Notably, payments for long-term care from an ABC Policy are tax exempt if they do not exceed Federal guidelines."

In short, besides covering long-term healthcare, ABC policies provide:

• 100% money-back guarantee of the deposit
• A death benefit at least equal to the single deposit
• Interest growth on the money deposited at current rates
• 100% guaranteed -- with principal protected by the strength and solvency of the insurance company issuing the policy.

According to a May, 2010 report by the Center for Retirement Research at Boston College, a healthy couple turning 65 last year can expect to spend $260,000 on healthcare, with 5% of this group spending $570,000 or more.

Paradoxically, if one or both spouses are chronically ill at age 65, costs will be lower, $220,000 and $465,000 respectively, say BC researchers Wei Sun, Anthony Webb and Natalia Zhivan.

"Our experience among Legacy Financial Advisors' clients shows they are spending much more and often face the additional financial burden of caring for their aging parents," says Mauro adding, "With the cost of nursing home care reaching $120,000 annually in Massachusetts, an ABC Policy can go a long way toward eliminating the biggest worry facing seniors and retirees today."

Mauro compares traditional long-term healthcare insurance to an ABC Policy. For couples who sign up for long-term healthcare insurance in their 50s and 60s, premiums will come to $3,500 - $10,000 annually for a maximum benefit of about $500,000. The older the couple is when they sign up, the higher the annual premiums, and the greater the risk they will be disqualified due to medical issues.

For the 65-year-old couple paying $10,000 annually, premiums will total $200,000 over 20 years to have $500,000 in long-term care coverage available for either or both spouses.

Alternatively, one can take $100,000 out of a bank account paying almost no interest and deposit that money into an ABC Policy at a reasonable interest rate. In addition to fair interest rates, one gets a death benefit paid back into the estate, plus the long-term care insurance benefits they need for security. The biggest plus is that they obtain about $500,000 of long term care protection but they have no yearly premium to pay.

After 20 years, the 65-year-old couple who bought ordinary long-term care insurance is out $200,000, while the couple with the ABC Policy retains the initial $100,000 payment plus interest and gets the same protection as well.  Mauro adds, "ABC Policies are available to anyone regardless of past medical history. Applicants typically have to answer a few medical and cognitive questions when they apply."

Emphasizes Mauro, whose firm specializes in retirement planning for middle-class millionaires, "As with most financial planning products, having a comprehensive, up-to-date financial plan can save a substantial amount of money when protecting your family from a long-term healthcare disaster."

Legacy Financial Advisors, Inc. is an independent financial services company serving a diverse client base since 1974.

Legacy's clients are successful individuals, business owners and families, including professionals, tradespeople and government employees. Typically, they are retirees and pre-retirees who work with Legacy to convert from accumulation planning to lifetime income planning.

Legacy Financial Advisors, Inc. caters to those who expect totally independent advice, delivered Face-to-Face. 

The firm's business model is based on three sound principles – adherence to a fiduciary standard of behavior of always doing what is best for the client; providing a stable firm with a deep level of education, training and experience required to deliver top-quality solutions to client issues, and all clients expect and receive outstanding personal service achieved with Legacy's dual advisor system, giving each client two advisors.

Legacy Financial Advisors, Inc. has offices throughout Massachusetts and across the United States. Executive and administrative offices are in Milford and Worcester, Massachusetts, with satellites in Waltham, Peabody, Braintree, and West Yarmouth on Cape Cod. Legacy accommodates all clients schedules and travel limitations.

Paul J. Mauro, CLU, ChFC and Linda Mauro of Bolton, Massachusetts own Legacy Financial Advisors, Inc. The couple, together with Legacy, created the Codger Cup Golf Tournament at Wedgewood Pines Country Club in Stow, Massachusetts. The annual Codger Cup benefits the Northeast Spinal Cord Injury Association and Individuals suffering from spinal cord injury.

Securities and advisory services are offered through SII Investments Inc. a member of FINRA and SIPC. SIPC, SII and Legacy are separate and not related companies. For further information about Legacy and to obtain a copy of Legacy's form ADV visit http://www.lfsadvisors.com.

To schedule a free initial consultation, contact Cathy Tharp at [email protected] or call 800-427-9781. 

Legacy Financial Advisors, Inc., 321 Fortune Blvd Milford MA 01757.

SOURCE Legacy Financial Advisors, Inc.