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Case Study 1 - Long Term Planning
Client: Widow, age 75
Home Value: $1.2 Million
EquityKey Participation Rate: 50%
Investment Fee Received: $150,000
Martha was concerned about the cost of long-term health care after hearing that the average cost of nursing home care was over $70,000 a year. She wanted to put a plan in place to help secure her future and ensure that she would never be a burden to her children.
She considered a reverse mortgage but was worried about the steep closing costs and the rising interest rates/fees that would quickly erode the equity in her home that she wanted to pass on to her children. Furthermore, she had heard that if she was in a skilled nursing facility and not living at home for more than a year, she would have to pay off the loan. These costs and the limited flexibility encouraged Martha to choose the EquityKey program instead.
She received a lump sum payment of $150,000 from EquityKey in exchange for 50% of the future appreciation of her home. With this money, she took $100,000 and purchased an insurance product that combined universal life insurance and long-term-care in one policy. No matter what the future held she knew that she would receive long-term-care benefits and/or a death benefit for her heirs.
With the remaining $50,000 she paid for some much needed remodeling to ensure that she could continue to live in her home comfortably for the rest of her life. She remodeled her bathroom and installed a walk-in tub, a hand-held shower head and grab bars. In addition, she modified her doorways to create barrier-free entryways throughout the house in case she ever needed a wheelchair, scooter or walker. Finally, she replaced her old, troublesome appliances with brand new ones that would last for years to come.
*This is a hypothetical example only. Nothing in this example is intended to provide financial, tax or other estate planning advice. Please contact your financial, tax or other advisor concerning your options and what may be best suitable for you
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