A more compelling reason is the opportunity to enhance the income value of the IBRP. The LTC rider is less expensive to add to an overfunded life insurance policy due to a smaller net amount at risk; the rider, therefore, has an insignificant effect on the income stream available in retirement years.
The IBRP contract with an LTC rider will average about 2% less income per year than a contract without the rider.
The IBRP is an overfunded contract with several design options.
His investment professional suggests he use an IBRP as the next best opportunity for tax-preferred savings.
Using the LTC rider in conjunction with the IBRP in this example allows for an extra $332,367 to be distributed from the policy, assuming death occurs at age 86.