LONG-TERM CARELESS? An analysis of long-term care insurance policies with the goal of finding a better value-for-money solution
Our research suggests that standard LTC policies are generally not good value for money if you are in average or above average health. LTC policies are only a good deal for folks who are in significantly below average health, and hence more likely to claim. But insurance companies typically reject those applicants. But even if LTC is poor value for money, most healthy individuals do need LTC coverage to reduce the risk of financial hardship and potential ruin.
There is a better solution, especially for those who enjoy above average health. Our research paper “Long Term Careless?” takes a detailed look at handling the considerable financial strains of long-term care and answers the questions individuals and their advisors need to ask.
For anyone around retirement age you should be pleased to know that on average your chance of reaching age 90 is about double what it would have been if you had been born a generation earlier. Human longevity has been increasing fairly steadily over recent decades due to improvements in medical science as well as lifestyle and environmental factors.
This may make you feel better. And so it should, assuming you relish the idea of a longer lifespan. Then after a brief glow of self-satisfaction your thoughts move onto another topic. But the increase in longevity is much more than a “feel-good” factor. Understanding the concepts and applying easy to-find information can make a dramatic difference in your financial decisions today with far-reaching results for decades.
As authors of “The Predictive Power of Portfolio Characteristics” we aim to demonstrate how to improve predictions of future equity fund results, using only measurable portfolio characteristics as opposed to past performance. After publication at the end of 2014, the paper quickly rose to rank #1 in downloads for its category in the Social Science Research Network’s online database.
This research may prove to be a valuable tool for anyone involved in manager or fund selection. The abstract and a link to the full paper can be found at http://ssrn.com/abstract=2539670.
For many affluent Americans, a high tax rate has increasingly become an accepted aspect of financial life. But with careful planning and the right professional advice, substantial investment portfolios can now legitimately be protected from that high tax bite.
Recent developments in the insurance world have now for the first time made a strategy used for years by family offices and the “super-rich” available for investors with portfolios in the $2 million to $20 million range. Financial advisors can now free these clients’ portfolios from taxes on ordinary income and capital gains without having to change their investment strategies.
Conventional wisdom suggests the American pension industry is heading for disaster as DC plans increasingly replace DB. If DB plans go the way of the dinosaur, does the US face an era of penury for pensioners? We disagree!
This new research focuses on the evolution of hybrid or variable plan structures that can provide adequate retirement benefits at a cost that sponsors can afford. Right now, these plans are just a blip on the radar (just like DC was thirty years ago). This presentation argues that new ideas and proposals for hybrid plans can change the future course of the pension fund industry, with major implications for plan sponsors, consultants, participants, and asset managers.
Research, articles, recent media coverage and other topics of note