COMPREHENSIVE RETIREMENT PLANNING: MORE THAN JUST PLANNING FOR A PAYCHECK

What encompasses a comprehensive retirement plan? For many, planning for retirement focuses just on the need for consistent income and not running out of money. Comprehensive planning should also include protecting financial assets.

The cost of a chronic or critical illness can devastate any retirement plan. The price of medication for life-saving therapies continues to be a highly contested debate. While patient advocates suggest that a drug's price should be in line with the value it provides, drug companies typically price these life-saving therapies at whatever the market will bear.

In August 2017, the FDA approved a groundbreaking treatment called CLT019, re-christened by Novartis as Kymriah. Carl June, a professor of Immunotherapy at the University of Pennsylvania’s medical school whose research led to the development of Kymriah, referring to the potential to treat other types of cancer with this type of therapy stated, "I think the whole cancer world’s going to be changed forever." Kymriah has been shown to significantly raise the chances of survival for children and young people with an aggressive form of leukemia. The FDA approved this first-of-its kind cancer therapy aimed at bolstering a patient’s own immune cells.¹ While the potential results are remarkable for this therapy, so is the cost. Swiss pharmaceuticals giant Novartis AG said it would charge $475,000 for the treatment.

Therein is the dilemma. Life-saving therapies exist, Kymriah just being one example, but are priced at such staggering levels that potentially limit their availability. However, at what point does the economics of paying for these expensive treatments supersede the benefits they provide?

While no one likes to think about the possibility of being diagnosed with cancer, or any other illness, planning for the unknown is important. While patients rarely pay the full cost of the drug therapies, there is an additional safeguard to consider when doing your retirement and estate planning: life insurance with living benefits. In addition to a death benefit, accelerated benefits riders may also provide living benefits in the event of certain medical conditions including heart attack, stroke or cancer. Based on the severity of the illness–minor to life threatening–the policy owner can elect to receive some or all of their death benefit while they are living.³

Just as planning to live a long life in retirement is important, it is also important to plan for the unknown. Risk in retirement planning may come in different forms. Your financial plan should provide maximum flexibility for all of life’s contingencies. In addition to sound investment and income planning, risk protection through permanent life insurance with living benefits can further enhance your retirement plan.

¹Novartis Defends Therapy’s Price, Wall Street Journal, 8/31/17

²Ibid, WSJ 8/31/17

³Payment of Accelerated Benefits will reduce the Cash Value and Death Benefit otherwise payable under the policy. Receipt of Accelerated Benefits may be a taxable event, may affect your eligibility for public assistance programs, and may reduce or eliminate other policy and rider benefits. Please consult your personal tax advisor to determine the tax status of any benefits paid under this rider and with social service agencies concerning how receipt of such a payment will affect you.

Riders are supplemental benefits that can be added to a life insurance policy and are not suitable unless you also have a need for life insurance. Riders are optional, may require additional premium and may not be available in all states or on all products. This is not a solicitation of any specific insurance policy.