LifeHealthPro senior editor Warren S. Hersch recently interviewed two executives with Lincoln Financial Group: Mike Hamilton, vice president of product development for Lincoln Financial’s MoneyGuard Solutions; and Steve Schoonveld, head of Linked Benefit Products.

The interview explored hybrid or linked benefit solutions — permanent life insurance policies with riders covering long-term care and chronic illness expenses — that are increasingly displacing stand-alone long-term care products. The following are excerpts.

Hersch: Describe for me the typical long-term care or chronic care scenario and how a hybrid solution might aid in meeting the resulting financial need.

Hamilton: We have a tool that helps show what can happen following a long-term care event. In a typical scenario, a 65-year-old couple with a $1 million nest egg needs to draw down the retirement asset by $35,000 annually. Factoring in other assumptions — a 5 percent annual growth on the asset, a 3 percent rate of inflation, a long-term care event at age 81 and end-of-life LTC expenses averaging $100,000 annually over three years — the retirement savings declines significantly in value, placing the couple’s retirement and legacy planning goals in jeopardy.

Schoonveld: Research findings have shown that about 70 percent of people age 65 will need some type of long-term care — and it won’t come cheap. The Bipartisan Policy Center estimates that Americans have at least a 25 percent chance of incurring $25,000 in long-term expenses during their lifetime.

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