MEETING THE FINANCIAL CHALLENGE
Helping You Ensure Quality of Life
For Loved Ones with Special Needs
LIFE INSURANCE SALES PRESENTATION
Joan Cleveland
Brett Berg
The Prudential Insurance Company of America
0221018
0221018 – 00001-00
LIFETIME CARE AND QUALITY OF LIFE
Lifetime Care
Quality of Life
Is there a difference?
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SPECIAL NEEDS PROTECTION
As long as we’re alive …
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PLANNING FOR THE FUTURE
• What will happen when we are gone?
– Financially?
– Legally?
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SUPPLEMENTAL SECURITY INCOME
There is federal legislation* that says …
Generally, a person must have assets of less
than $2,000 to qualify for Supplemental Security
Income (SSI) benefits and have personal
income less than specified levels.
*42 U.S.C. 1382(a)(3)(B)
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DID YOU KNOW ABOUT SSI?
• Did you know this legislation existed?
• What does it mean to you, your child, and the
rest of your family?
• You may not need the Supplemental Security
Income, but you will typically need Medicaid.
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THE WILL
•
•
•
•
•
I have one.
I have one but it’s old.
I don’t have one.
Do I need one? Yes, but …
The Executor: Who, what?
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THE GUARDIAN
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•
•
•
•
•
.
Am I my child’s guardian?
What does the guardian actually do?
Does my child need one while I’m alive?
Does my child need one when I’m gone?
Who should be the guardian?
How does my child get a guardian?
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THE SPECIAL NEEDS TRUST
The only legal solution to protect government benefits
How does the trust protect government benefit
eligibility?
What benefits does it protect?
What does the trust provide for?
Are there restrictions?
How does it work?
A Special Needs Trust supplements,
but does not supplant, government benefits.
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THE SPECIAL NEEDS TRUST (CONT.)
• Work with an attorney whose expertise is Special
Needs Planning.
• How do you fund the trust?
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FINANCIAL RESOURCES
• How much money will my child’s Special Needs
Trust need to provide him/her with a good
quality of life?
• I don’t just want to fund “needs”; I want to fund
“wants and wishes.”
• From where will the money come?
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FINANCIAL RESOURCES
Child
Parents
Relatives
Government
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FINANCIAL SOURCES & POTENTIAL ISSUES
Real Estate
Liquidity; the Market
Non-Qualified Investments Risk; Not Saving Enough
Qualified Retirement
Investments
Life Insurance
Risk; Taxes; Living Too Long
Let’s Discuss!
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WHAT LIFE INSURANCE CAN OFFER …
• Generally income tax-free death benefit (IRC
Section 101(a))
•
•
•
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•
•
Usually probate free
Can be made to be estate tax free
Can be designed to fit most budgets
Funding of the special needs trust
Can provide guaranteed death benefit
Many Special Needs Trusts are funded with life
insurance
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WHICH IS THE RIGHT CHOICE?
“But there are so many types!
Which one is best
for funding my child’s
Special Needs Trust
and why?”
.
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TYPES OF LIFE INSURANCE – ONE LIFE
TERM
(for a defined period)



Short-term coverage
Initially less expensive
Usually no cash value
PERMANENT
(for your lifetime)



Lifetime coverage
Doesn’t need to be
renewed
May build cash value
50%
are afraid of
making the
wrong choice.
Source: LIMRA’s Household Trends in U.S. Life Insurance
Ownership Study, 2010
MEETING THE CHALLENGE: HELPING TO ENSURE
THE SECURITY OF THE PEOPLE YOU LOVE
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TYPES OF LIFE INSURANCE – TWO LIVES
• Covers two individuals
Survivorship
• Generally costs less than two
separate policies
• Pays at the second death, when the
money is needed most
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FUNDING THE SPECIAL NEEDS TRUST
How much? It depends …
• Annualized monthly expenses—no matter the
funding source
• A “dependable” rate of return
• Principal protection/inflation
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SPECIAL NEEDS TRUST
Review
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THE LETTER OF INTENT
• Serves as a letter of instruction for a future
(or current) caregiver
• Includes what a will or trust cannot—your wishes
for your child’s future
– for health issues, education, where your child will live,
and much more
• Includes the comprehensive information to
support your wishes
• Should be signed and witnessed
.
.
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HOW CAN I MAINTAIN AN INCOME
IF I CAN NO LONGER WORK?
Disability Insurance
• Who is it for?
– You and the people who
depend on you
• What does it do?
– Provides income when
you can’t
• How long can you live on
your savings if you were
disabled?
The chances of a
disability occurring are
much greater than most
Americans realize.
Just over 1 in 4 of
today’s 20 year olds
will become disabled
before they retire.
Source: Social Security Administration,
Fact Sheet March 18, 2011
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START TODAY!
You can begin to help ensure
your loved one’s quality of life today
by meeting with a financial professional knowledgeable
about the Special Needs Solutions program
as well as your
qualified legal and tax professionals.
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START TODAY!
Visit: www.prudential.com/specialneeds
Click on:
Find a Financial
Provider
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START TODAY!
Select
Your State
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IMPORTANT INFORMATION
This material has been designed to provide
general information in regard to the subject matter
covered. It should be used with the understanding
that we are not rendering legal, accounting, or tax
advice. Such services should be provided by your
own advisors. Accordingly, any information in this
document cannot be used by any taxpayer for
purposes of avoiding penalties under the Internal
Revenue Code.
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IMPORTANT INFORMATION
All guarantees are based on the claims-paying
ability of the issuing company.
Prudential, the Prudential logo, and the Rock
symbol are service marks of The Prudential
Financial, Inc. and its related entities.
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IMPORTANT INFORMATION
Life insurance issued by The Prudential Insurance
Company of America, Pruco Life Insurance
Company (except in New York) and Pruco Life
Insurance Company of New Jersey (in New York
and New Jersey). All are Prudential Financial
companies located in Newark, NJ and each is
solely responsible for its own financial condition
and contractual obligations.
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IMPORTANT INFORMATION
Like most insurance policies, our policies
contain exclusions, limitations, reductions of
benefits, and terms for keeping them in force. A
licensed financial professional will be glad to
provide you with costs and complete details.
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