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2018 1st Edition (Other Editions)


Despite the lack of guarantees, the advantage of equity investments still remains for beating inflation and for rapid accumulation of investment dollars. Part of the secret to maximizing that advantage is in recognizing the value of diversification by placing money in a variety of products. Consider the value of employing a mix of cash reserves, cash value life insurance, tax deferred variable annuities and a total return of growth mutual fund versus a single guaranteed fixed return. To show the powerful principle of diversification, consider the following scenarios: 

A $100,000 investment with a guaranteed fixed rate of return of 8% will grow to $684,850 after 25 years.
The same $100,000 could be evenly diversified between five separate investments each with a different degree of risk. One could lose all of its value, one could remain even, one could gain 5%, one could gain 10% and one could gain 15%.

The net result would be an accumulation value of $962,800 after 25 years or $277,950 more than the guaranteed investment. Although two of the investments were underperformed by the guaranteed investment, the diversification into other assets that did perform well provided a greater long term total return. 


Usually when people think of long term care, they think of nursing homes. Long term care means more than nursing home care. It means, for example, home health, personal care or help with chores. It can also mean a community program such as an adult day care center or in a nursing home. However, some people may have limited financial resources available and this is a major factor in one's ability to obtain the care or services needed.

If an illness or disability made it impossible for you to carry on as you do today, would you know how to find help? Do you know what services cost? Do you know what protection your current private insurance coverage offer regarding long term care? 

Long term care is distinguishable from acute care such as that provided in a hospital. It refers to the level of care needed by those people with chronic illness or disability requiring continued support. 

Private long term care insurance differs from the usual health care insurance with which most people are familiar. Long term care insurance is one way to cover the costs of caring for the chronically ill not typically covered by health insurance plans. It appears to be one option that makes up for the lack of public funding programs. 


$100,000 invested at 8% for 25 years would grow to: $684,850


$20,000 at a Total Loss -0-
$20,000 at 0% return 20,000
$20,000 at 5% 67,730
$20,000 at 10% 216,690
$20,000 at 15% 658,380
Total All Investments 962,800

Working together, a variety of products will build a stronger financial program with greater possibility to offset inflation. 

This example is for illustration only and is not intended to reflect any existing transaction, results or performance. The amounts and rates shown are hypothetical and shown only as an example. For detailed analysis you should consult with a professional financial advisor. 

Source: Financial Planning Consultants, Inc.