Bernard F. Pettingill, Ph.D. and Nils Westerlund, DPT - Cost Benefit Analysis of Life - Universal Life Assessment Plan (ULAP¹⁰⁰)

PALM BEACH GARDENS, Fla.--(BUSINESS WIRE)--Can you afford your own life expectancy or to live to 100? This question is concerning millions of individuals and must be answered intelligently in light of massive declines in retirement savings, evaporating home equity, escalating medical costs, advances in medical research, focus on wellness with increased life expectancies, escalating insurance premiums, growing concern over Social Security inadequacies and forecasted insolvencies of Medicare and Medicaid.

A study from Health Care Financing Administration reports national healthcare expenditures per capita are over $1,300,000,000,000 with retirees facing increasing Medicare premiums and higher co-pays. The Centers for Medicare and Medicaid Services estimated that out-of-pocket expenses amounted to $3,800 per year for individuals and $7,600 for couples. Moreover, most individuals over 65 will require long-term care in their lifetime. Individuals need to stay healthy as long as possible to minimize future medical expenses and decrease their National Retirement “At Risk” score. The Center for Disease Control and Prevention recommends a structured wellness program with medical research in the US, Israel, Sweden and other countries highlighting the importance. In fact, US scientists are on the verge of creating a small device, which will quickly scan for diseases by testing blood, saliva or urine samples.

The economics of living are changing with medical advances rewriting long held longevity beliefs. Due to increased life expectancies as forecasted by the US government, Social Security is now the largest federal spending program at over $610 billion, according to Chairman Ben Bernanke of the Federal Reserve. With respect to Social Security insolvency, President Bush has called for privatization to address these inadequacies and Nobel Laureate Milton Friedman has also repeatedly emphasized the shortcomings. The Heritage Foundation calculates that taxpayers, who earn $60,000/year, will pay $284,360 into Social Security but only receive $2,208/month. The same taxpayer, saving the exact $284,360 weighted with US treasuries and bonds would receive $7,372/month. However, given the current state of the investment landscape, critics of the system argue that long-term trends are unpredictable and cannot be adequately forecasted. If businesses such as AIG, Goldman Sachs, Countrywide, Smith Barney and Lehman are unable to successfully chart a profitable course, how can individuals?

Now is the time for “change” with a comprehensive universal life assessment plan that would manage life’s uncertainties. A Universal Life Assessment Plan (ULAP¹⁰⁰) would encompass all aspects of an individual’s life from birth to death. A taxed-deferred, fully funded investment would be set-up over one’s life, with allowable withdrawals for health care, advanced education and ultimately a comfortable retirement. The power of compounding would be significant by investing pension savings over decades. For example: $1,000/month saved in a structured investment for 30 years equals $1,000,000 in the 50th year, but over $1,700,000 by the 70th year. Following death of a covered individual, the residual amount would pass to their estate. In short, every individual would receive a ULAP¹⁰⁰ analysis of their life’s risk which would start as a child and last a lifetime to facilitate health, financial security and insure an individual can stay independent for 100 years.

Note: It is not the intent of the authors to provide a complete and comprehensive analysis, but a benchmark for ideas to move towards a universal life assessment plan that can reverse the trend in retirement underfunding and facilitate lifelong independence. Additional information is available in full 6,500+ word article from B.F. Pettingill, Ph.D. and Nils Westerlund, DPT, 561-622-0330 or www.bpettingill.com. Article has numerous appendices, which contain the most comprehensive life questionnaire compiled to date.