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Experts in Longevity Analysis
- Customized Longevity
Planning Reports/CLPR
- Life Expectancy Certificates
- Senior Mortality Data
- Policy Tracking
- Custom Services
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FOR FINANCIAL PROFESSIONALS
What’s
your client’s
life expectancy?
The fear that they will outlive their assets
drives 66% of the people who seek out
financial planners.*
But how do you help them if you can’t
answer the key question:How long are
you likely to live?
When you’re planning for boomers and seniors, you’re at a disadvantage if you don’t
know whether your client is likely to live to age 70 or to age 102. It’s hard to
plan for a risk you can’t define.
That’s where the Customized Longevity Planning ReportTM
– the CLPRTM – comes in. It’s a longevity analysis
that is completely customized, medically based and statistically sound. It’s from
21st Services, the leader in life expectancy analysis.
Click here for more on our Customized
Longevity Planning Report.
We believe the CLPR is the best tool on the market to help you
- understand your client’s longevity risk
- develop risk mitigation strategies, and
- identify products and services that will give your clients the security and peace
of mind they need.
Deferred &
Immediate
Annuities
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ORDER NOW
Click here to see CLPR options and start the ordering process.
Explore these topics on the CLPR
and its fit with financial planning:
CLPR introductory video by 21st Services
co-founder Paul Kirkman
CLPR introductory
message
What is a CLPR?
10 Reasons to Use the CLPR to Help You Plan
Two Financial Planning Case Studies
Sample Planning Strategies Based on the Longevity
Curve
The Experts Comment on the Longevity Curve and Financial
Planning
The Science of Life Expectancy at 21st Services
Our Medically Based
Longevity Report vs. the Free Online Calculators
Q&A
* Source: “The Best-Laid Financial Plan,”
The Wall Street Journal, October 6-7, 2007, page R9.
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See our advertising in
financial planning magazines.
“What good are all the
online and commercial calculators and planning software packages,
if the key assumption that planners are starting with is incorrect?
Stephan R. Leimberg, Esq., speaking at a meeting of the National Association of
Personal Financial Advisors (NAPFA), September 5, 2008. Read more of Stephan
Leimberg’s thoughts on life expectancy evaluations.
Build your client’s plan on the right foundation.
Start with the CLPRTM.
News From 21st Services
21st
Services launches version of its longevity analysis just for financial planning:
the CLPR
21st Services has introduced a special version of its life expectancy evaluation
– called the CLPR – to financial planners this fall. Find out more about this special
product and how it helps both planners and consumers.
Click here to learn
more.
First
results in March from 21st Services’ ground-breaking mortality study of 20 million
Medicare records
21st Services is conducting a major research project, which will increase the data
foundation for our longevity analysis and reports. The first results are due out
in March 2009.
Click here to learn
more.
Online
version of 21st Services’ longevity report debuts February 2009
21st Services’ longevity report for financial planning is now available in an online
version. It saves time and money and produces very reliable results.
Click here to learn more.
Financial Planning
“I can give you the perfect financial plan if you just tell me how long you’re going
to live.” It’s an old saw, but it makes sense. How do you allocate assets, select
investment vehicles, advise on spending plans and guide asset transfer and gifting
decisions – without a sense of how long assets will accumulate or when the transfers
are likely to take place? The CLPR can help answer planning questions like these:
- Does my client have the right balance in his/her investment portfolio?
- Can my client take on more risk because he/she is likely to have a longer planning
horizon?
- Should I be reducing risk because the horizon is likely to be shorter than average?
- Can I use this touchstone – the CLPR results – to test specific investment choices
– aggressive vs. moderate vs. conservative?
- Are my recommendations really suitable, given what I now know about my client’s
life expectancy?
Asset Allocation
Should the client’s portfolio focus on growth or income? Standard planning tools
set fairly rigid guidelines – under 60: X% growth, Y% income. Over 60: X% income,
Y% growth. But if your client has a longer-than-average life expectancy, or a shorter-than-average
life expectancy, the rules may no longer apply.
- Does my client’s long life expectancy mean we should adjust the growth/income ratio
in the portfolio, in favor of more growth?
- If my client has a shorter-than-average life expectancy, should we shift more to
income-producing vehicles so my client has the option to increase current spending
and enjoy the time he/she has – or to cover uninsured health care costs?
Retirement Planning
Planners who routinely use the CLPR tell us they sometimes wonder how they ever
developed a retirement plan without it. “How long will my client be retired?” is
the critical first question in retirement planning. A life expectancy evaluation
like the CLPR can tell you whether you’re planning for a decade – or three! It can
help answer questions like these:
- How much money will my client need at retirement?
- Is my client on track to outlive his income?
- Should my client plan to work past normal retirement age?
- Should my client start taking Social Security before full retirement age – or wait
until several years after retirement?
- Should we be changing the investment plan for his/her retirement funds to emphasize
growth (for a long retirement) or income (for a shorter one)?
- Does my client’s short life expectancy mean we should be pushing up some of the
spending plans – on travel, for example, or a second home – so he/she enjoys life
while still healthy enough?
Social Security
Even when a client has a sizeable portfolio, Social Security can make an important
contribution to retirement income. When to start receiving Social Security payments
is an important consideration in a financial plan. In this decision, life expectancy
can be the major determinant.
- Should the client, because of a shorter-than-average life expectancy, start taking
Social Security payments early?
- Should the client, because of a longer-than-average life expectancy, wait as long
as possible to start taking Social Security payments?
Business Planning
In a small business, the owner’s or partners’ life expectancy(ies) should be a factor
in major financial decisions, if the principals are 55 or older. When you’re drafting
a buy-sell agreement among partners, it’s helpful to know who is truly likely to
survive whom. The CLPR can help answer questions like these:
- How do I structure the buy-sell, given the likely survivor(s) and their interests?
- Does the likely survivor really want to run the business alone?
- What bearing does the owner’s life expectancy have on the company’s liability to
cover bank loans? Liability under non-qualified deferred compensation? Other business
liability?
Annuities
A life expectancy evaluation is extremely useful when the client is considering
payout options for an immediate annuity – or for a deferred annuity. It can answer
questions like these:
- With a deferred annuity, how long should the client defer annuitization? The longer
the fund accumulates untapped, the bigger it can grow, tax-deferred. So the client
with a longer-than-average life expectancy may want to defer the payout phase as
long as possible.
- With any annuity, what annuitization pattern is best? Lifetime payments? May be
good for a client with a longer-than-average life expectancy. Period certain? May
be good for a shorter life expectancy. Joint and survivor? Here, it would be best
to know both parties’ life expectancies – and get a Joint CLPR as well.
Gift Planning
A life expectancy evaluation can help a client determine when it’s time to get serious
about a gifting plan. A shorter-than-average life expectancy may mean the time is
right to step up the giving of outright gifts. A structured instrument, such as
a charitable remainder trust, can provide monetary benefits to a client with a longer
life expectancy and make sure that the organizations he/she cares about will be
provided for after the client’s death.
- What, how much and when should my client transfer assets in the form of gifts –
vs. transferring them as a legacy at death?
- Would a gift annuity make sense for my client? How should the payouts be structured,
given my client’s life expectancy?
- How much payback can my client anticipate from a charitable remainder annuity trust
(CRAT) or charitable remainder unitrust (CRUT)?
Reverse Mortgages
In recent years, a significant number of seniors who need greater liquidity in retirement
are turning to reverse mortgages. After years of making payments on their home to
a financial institution, they can start getting payments from a financial institution.
The institution eventually owns the home, but the senior can remain in it as long
as they are physically able. A life expectancy evaluation like the CLPR can answer
questions like these:
- Based on the client’s life expectancy, how many reverse mortgage payments are they
likely to receive?
- If the clients are a couple, what is the joint life expectancy, and how does that
impact this decision?
- Is this a good deal for them, or should I seek other assets to turn into cash?
Long-Term Care
Long-term care costs have decimated many people’s nest eggs and derailed many plans
for transferring wealth to the next generation. But clients sometimes balk at the
high premiums of long-term care insurance policies. A life expectancy evaluation
can help them decide whether the premiums are worth it.
- Is the client likely to outlive by many years his/her spouse or caregiver?
- Based on their relative life expectancies, do the husband and wife have an equal
need for long-term care insurance?
- Can a life expectancy evaluation help the client decide what benefits to select
within the LTC policy?
Life Settlement Planning
Life settlements enable clients to sell their life insurance policies for more cash
than they’d net by surrendering the policies. But not every client qualifies for
a life settlement. The CLPR, derived from a life expectancy evaluation tool long
used in the life settlement industry, is a great life settlement pre-screening tool,
used to see whether the client is likely to qualify. The eCLPR, in particular, is
an economical way to “test the water.”
- Should I be considering my client’s life insurance policies as I review the assets
I could help him/her turn into needed income?
- Is my client likely to qualify for a life settlement – because his/her life expectancy
is shorter than average?
Estate Planning
A life expectancy evaluation like the CLPR provides crucial information for a planner.
How far in the future is death likely to occur – and how much before that do we
need a firm plan in place? Because many clients procrastinate when it comes to estate
planning, the CLPR results can provide an incentive to act.
- Time urgency – does a shorter-than-average life expectancy mean we should be working
on the estate plan now?
- How large is the estate likely to grow?
- Should we be creating trusts? What kind? How long should a guaranteed remainder
trust run?
- Should the client create, accelerate or slow down a gift-giving program?
Life Insurance Planning
The client’s life expectancy gives you a better idea of whether he will live long
enough – and earn long enough – to meet his goals for securing the future for his
family or his business. If not, life insurance is often the best answer. Here are
some of the questions a longevity report can help answer.
- Does my client have enough insurance?
- If my client needs more, should it be term or permanent?
- Should my client seek to reduce his/her insurance premiums? Should we drop the premium
to just cover the COI?
- Should my client convert his/her term policy because he/she will need coverage well
past the term?
- Should our insurance focus shift to estate tax protection? Should some of the client’s
coverage be second-to-die? (In that case, CLPRs on both spouses and a Joint CLPR
would be useful.)
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