Frequently Asked Questions
Here’s list of questions that financial professionals often ask about the Customized
Longevity Planning ReportTM – or CLPRTM
– and 21st Services. If you need more information, please call us at 877-317-3008.
Click on the questions below to go to the answers.
What is a CLPRTM?
21st Services, the leader in life expectancy analysis, delivers a scientific assessment
of expected life span for each individual client through a powerful combination
of actuarial and statistical rigor combined with deep medical knowledge. The life
expectancy data is provided in the form of a Customized Longevity Planning Report
(CLPR), and includes the median/average life expectancy customized for your client
based on their specific medical, family and personal history, as well as the projected
maximum life expectancy. The report provides the entire longevity curve indicating
the probability of living to various ages.
The CLPRTM – or Customized Longevity Planning
ReportTM – is a customized, comprehensive evaluation
that shows your client’s life expectancy, expressed in several ways. It is based
on an analysis of your client’s specific medical, family and personal history. 21st
Services’ methods have been honed and tested in 10 years of providing evaluations
to the life settlement industry. (Click here for more about
the CLPR.)
Why should a planning professional use the CLPR?
There are actually many reasons (Click here for
10 Reasons), but here are the main ones:
- The CLPR enables the planner to answer the most fundamental questions in financial
planning: How long are we planning for? What is the client’s average life expectancy?
What is the client’s maximum life span likely to be? The answers are the starting
points for all recommendations, the underpinning of a suitable, strategic financial
plan.
- The CLPR gives the planner new perspective and insight into a specific client’s
unique situation. It supports the creation of effective plans designed to maximize
the value of the client’s portfolio and estate, promote prudent spending, and enhance
quality of life.
- The CLPR provides independent third-party support for the suitability and appropriateness
of your recommendations. The benefits of following your advice are much clearer,
so your client is more likely to embrace and comply with the tactics supporting
the strategies – whether they relate to changing spending patterns, changing the
asset mix, or buying appropriate financial products and services.
- By using this tool, you demonstrate a commitment to a higher level of planning excellence
and professionalism. That differentiates you from other planners and can enhance
client trust and loyalty.
How accurate is the CLPR?
21st Services is committed to providing the most accurate product possible, based
on all the data we can obtain and on our proprietary analytical processes. We measure
the accuracy of our life expectancy evaluations by monitoring our actual results
to the expected outcomes.
Because 21st Services is only 10 years old, a relatively small number of
cases have reached the median life expectancy. To supplement our own data, so that
we can better track our results, we are sponsoring a mortality study of the Medicare
records of 15 million senior citizens. A not-for-profit research organization, Chronic
Disease Research Group (CDRG), is conducting the study. We will begin to receive
the results of this study in 2009. We will use the results to validate and refine
our underwriting procedures and our propriety mortality table.
Click here for more on the study.
What if my client lives longer than expected? Do I have liability?
The CLPR is a statistically supported estimate, not a prediction. You have to make
an assumption around the client’s life expectancy in order to plan. This is a more
responsible way to do it.
Jeffrey Kelvin’s white paper “A New
Standard for the Ethical Planner” suggests you may have more liability if
you don’t use a life expectancy evaluation like the CLPR. Mr. Kelvin is a compliance
advisor to some 2,000 financial planners. Starting your plan with a statistically
supported longevity estimate, based on your client’s own medical information, is
far more defensible than automatically adopting an “alive to 105” assumption for
every client – or than using a life insurance industry or Social Security mortality
table, according to Mr. Kelvin.
The “alive to 105” stance can have particular dangers if the client has a short
life expectancy. A badly skewed retirement investment strategy can lead to misallocating
assets and postponing spending to the point that the client doesn’t fully enjoy
the time they have. It can be just as dangerous for the client if you guess too
long as if you guess too short.
It’s also important to remember that the CLPR provides an individual’s entire longevity
curve, not just a median life expectancy. Any point you choose is still customized
to your client. Together, you can choose logical points along the curve for planning
purposes. For example, you may want to make sure the estate plan is solid before
or at least by the median (50% probability of survival) point. You will probably
want to make sure basic living expenses and long-term care costs are covered out
to the end of the curve.
Recognize, too, that the life expectancy analysis is a snap-shot in time. Our life
expectancies evolve as we age, due to the passage of time, changes in health and
habits and advances in medical treatments. An updated CLPR should be obtained at
least every three years.
Who pays for the CLPR? How are other advisors handling the fee?
Some financial advisors incorporate the cost of the report into their fee for service.
Others have chosen to refer their clients to 21st Services to purchase and obtain
the report directly. For more on these two options,
click here.
Will this information be reported to the Medical Information Bureau (MIB)?
No, it will not. 21st Services is not a member of the MIB.
How long has 21st Services been in business?
Founded in 1998, 21st Services has become the leader among life expectancy providers,
combining actuarial and underwriting expertise with sophisticated, proprietary software.
We’ve provided more than 100,000 life expectancy evaluations to investment institutions,
supporting over $1 billion in transactions.