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When meeting with clients to discuss the benefit that a Long-Term Care (LTC) Insurance policy has on their overall financial plan, tax deductions might not be the first thing you emphasize, but should be one of your top five discussion points.

Taking the time to explain the tax advantages may provide the tipping point for clients who are hesitant about purchasing a policy.

Here are a few scenarios on how to approach each type of client:

The Client On The Fence

Many states offer a deduction or credit on paid LTC Insurance premiums, which can make purchasing coverage more attractive to your clients.  For example, in the state of Ohio, residents are able to deduct the entire annual premium for their LTCI policies on their tax returns.

The Planner

If you are working with clients on their tax strategy, consider turning their tax refund into an LTC Insurance premium payment.  It’s a great way to plan for the cost of the insurance and can make annual premium payments a non-event.

Business Owners

When a C-Corporation purchases a policy on behalf of its employees, and their spouses or dependents, the corporation is entitled to take 100% deduction as a business expense on the total premiums paid.  If self-employed, clients can deduct 100% of their out-of-pocket LTC premiums up to the age-based Eligible Premium amounts*.

Current Policyholders

Clients who already have an LTC Insurance policy may not know about the tax deductions available to them.  So during your annual review, be sure to educate them about a missed opportunity to take a tax deduction.

Contact your Long-Term Care Specialist today to learn more about the tax advantages of LTC Insurance.

Selling Disability Insurance (DI) is a delicate process. You know your clients need the protection, but the ‘hard sell’ angle can be too aggressive.  Today, we are working in an environment where a subtle approach has proven much more effective when opening the conversation about Disability Insurance.

Instead of drilling your clients with horror stories about the difficulties they will face without having a DI policy in place, ask them the right questions in order to make the DI sale.

Three Questions That Will Start The Income Protection Conversation

Do you have an income protection plan, if you were to get sick or hurt and couldn’t work?

“No,” will be the response you will most likely hear, leading you to question two.  However, you will have a percentage of clients that may have an Employer funded group plan – and most employees with Group Long-Term Disability couldn’t tell you what their employer sponsored plan would pay if they went on claim.  Simply suggest they send an email to their HR dept for an electronic copy of their benefit book.

Most group plans will pay 60% of their earnings and is fully taxable to maximum benefit.  After taxes, that monthly benefit plummets to around 43% of their earnings – a substantial pay cut, and many aren’t able to sustain their standard of living at only 43%.  The opportunity is to have them buy a small personal policy to bring their income up to 65 to 70%.

How long would you be able to make your monthly bills if you couldn’t work?

This is where we would use the subtle approach to start painting the picture of what it is going to look like after an illness or accident.  Ask your client how long their Savings, Retirement Plan, and Credit cards would carry them.  3 months?  6 Months?  1 year?

And where is the money going to come from after that?

Wait to let them answer.  You are still painting the picture.  Let your client know that you have an affordable plan that would protect their income if they got sick or hurt.  Simply ask if they would like to learn more about it.  You will have a percentage of clients who ‘get it’ and will want to learn more, and you will have those that don’t care.  And that’s okay – as long as you make the effort to provide them the protection, when they are ready to buy, they will come to you.

These three simple questions will paint the picture for your clients and help identify their need for an Income Protection Plan.  Please contact your DI Sales Rep for support with your Income Protection Business.

In the 2000 comedy flick Family Man, the investment guru played by Nicolas Cage is asked if he likes kids.  His response:  “On a case-by-case basis!”

But when minors are to be a party to a life insurance policy we can’t be so selective.

Every case is a potential problem and contracts must be implemented accordingly.

Minors are not legally competent (as in not allowed under the law) to own a policy or take possession of the death benefit, so… the easiest solution is to always use a state’s Uniform Transfer to Minors Act (UTMA) when drafting a beneficiary designation for a minor child.

A few basics:

• The device is created in the beneficiary designation and operates like a “poor-person’s trust” when a separate formal trust is too expensive or too complicated to use.
• A custodian-beneficiary is appointed to watch over the policy and proceeds for the benefit of the minor according to the directives in the state’s UTMA.
• A successor custodian should always be appointed, since there is a good chance the custodian may pass away before the minor.
• When the minor reaches the age of majority (which can differ with each state) the policy or proceeds must be turned over to him/her “lock, stock and barrel” – unlike a trust where control can be delayed well into adulthood.
• The wording must comply with state law.  In addition, always check with the carrier Claims Department for its approval.
• There must be a full and separate designation for each minor beneficiary.

The most important thing on a life insurance policy is the beneficiary designation.  But you’d never know it by the small amount of space given for it on the application – space that is especially inadequate if a minor is involved.  A UTMA designation will always take a separate page to be appended to the application.

That’s just a start.  There are always devils in the details, e.g. accommodating contingent minor beneficiaries.  So call with questions or help on a policy involving minors at 706-354-0401 or tom@cpsadvancedmarkets.com.

You probably know that Cage’s real name is Nicolas Coppola.  He changed it for the screen because he didn’t want to appear to be cashing in on the reputation of his uncle, director Francis Ford Coppola.

There is no denying that the Biden Administration will be making some tax-law changes in the future.  The Administration has already suggested that they would like to reduce the Estate Tax Exclusion limits which currently sits at $11,580,000 per individual.

Depending on what the exclusion limit adjusts to, this simple tax change could impact a significant amount of our high-earning clients.

From 2011 to 2017 the Estate Tax Exclusion was $5 million (adjusted for inflation) and then jumped up dramatically in 2018 to $11,180,000.  So, the question is purposed, what if the new Administration tries to re establish the $5 million limit?  How many of our clients would have a serious estate tax issue?

The Solution

Permanent Life Insurance is an asset that can manage your client’s taxes, make sure they leave a legacy to their beneficiaries that will not be taxed at a 40% clip from the government, and provide them peace of mind with a level payment.  The unique tax advantages of life insurance policies, when properly owned and funded by a Trust, could save families thousands of dollars in estate taxes.

As financial advisors we do not have a crystal ball but what we do know is funding a permanent life insurance policy now for the purpose of estate protection with the element of cash value accumulation provides your clients and their families flexibility to shield their net worth from bureaucrat changes happening today and in the future.

Please reach out to your Life Sales Representative for more information.

How many times have you heard clients’ concerns about the cost of Long-Term Care Insurance?  It is the single most common objection, but this objection can be overcome by understanding the underlying issues at work here.

If your clients are like most, they do not think they will ever need LTCI, and they do not really understand what they are getting for their money.  So how can you help them overcome these misconceptions?  This requires asking some very specific questions.

Many producers make the mistake of showing an illustration too soon – the premium then becomes the problem instead of the solution.  You must first develop the need.

Try starting with

• “What is your written plan of care should an extended health care need arise?’’  The majority of people do not have a plan, other than thinking their family will take care of them.
• Your follow up to this response should be, “I am happy to hear you have such a wonderful family that wants to be there for you, but have you had this conversation with them?”  Most likely, this has never even crossed their mind.
• Then if applicable ask, “Are all of your children employed?”  And if so, “Which one could afford to cut back on their work week, or quit all together to provide needed care?”
• The next question is critical and must also be asked.  “Which one of your children do you want to do your bathing or toileting?”  Follow up with, “Wouldn’t you rather have a trained professional come in and take over that burden, freeing up your family to spend quality time with you and allowing you to maintain your dignity and independence?’’

The purpose of this dialog is to get your clients to really understand what care giving encompasses.  It is at that point they realize the true value of a LTC policy.

While the life insurance sale is a very logical one, the LTCI sale is unique, as it is an emotional sale.  When an extended health care need arises, it is an emergency, not a planned event.

A LTCI policy not only provides financial support, it also provides much needed emotional support for the family members dealing with the emergency.

If and when a person becomes ill, there will be a need for care and a way to pay for that care.  A Long-Term Care Insurance policy is the most cost effective way to provide for that.  The premium is not the problem – the premium is the solution to the problem.  If you can get your clients to understand this, you will get the sale.

Contact your LTCI Specialist today for more ideas on how to develop the need and start closing more business!

Did you know that 82% of business owners are not covered under the same Workers Compensation policies they are required to pay and carry for their employees?

Health insurance would take care of their medical expenses in the case of an injury or illness, but how would they recover lost income?

Could they maintain current revenue distribution from the company to pay their bills while recovering?  Will their business be able to sustain itself during their absence?

An affordable Income Protection policy to help your business owner clients protect their income from injury and illness both on and off the job is available.

Reach out to any business owner who carries Workers Compensation Insurance for their employees and ask if they have a plan in place for themselves.

Compare the premium difference in adding the owner under the Workers Comp policy versus an Individual Accident & Sickness Plan – you’ll find the savings to be significant.  All the while securing valuable coverage for your clients.

For smaller organizations, a Business Overhead Expense Insurance policy may be a good fit – it will reimburse the owner for all fixed business expenses and keep the doors open during recovery.

Contact your Disability Income Specialist for case design customized to your clients’ needs.  The sales opportunities are endless.

The poet and playwright, Oscar Wilde, once described a cynic as someone who knew the price of everything and the value of nothing.

A good friend of mine has sold residential real estate for years.  Describing some of her non-cynical clients, she tells many stories of long-time homeowners who struggle with the problem in reverse when life changes force them to bargain off the bungalow.  On the one hand, her seller sees the staircase in the front hall as the one children, and then grandchildren, crept down far too early each Christmas morning.  On the other, the potential buyer sees a loose banister and worn carpeting.

The different points of view and the effect of each on either worldly price or more poignant sentimental value can make coming to terms a difficult process.

“My job,” she says, “is to as comfortably as possible inject a shot of reality into my client’s thinking!”  Often an advisor has to do the same for a long-time business owner who concentrates too heavily on and overvalues personal and emotional attachments to the establishment; or maybe who, because they have never viewed the business “from the outside,” underestimates the worth of his or her firm.

There are several reasons an owner should have a realistic view of a business’s worth

First, many consider what “might be gotten” upon its sale as a considerable asset in a retirement plan.  Or second, a fair valuation is important to be sure the terms of any transition agreement are reasonable and equitable for all parties.  Third, and perhaps related to transition planning, if the cost of purchase under any agreed buy-out event is to be insured, a good valuation will be necessary for financial justification of coverage with the carrier.  And fourth, maybe, if the valuation figure is much higher than expected it can be subtly used by the owner to enhance his or her reputation at the next club party or church supper.

The bad news is that formal valuations can be expensive.  A thorough job could run as high as $20,000, give or take a few grand.  The good news is that there are informal alternatives available that are adequate for the planning purposes mentioned for no cost and a minimum amount of bother.

We represent at least two carriers who, as a service, will do informal business valuations using just the data from a simple questionnaire and three years of the company’s financial information.

The results assess the estimated worth of the company using several valuation methods common in the industry.  The results are in a format presentable for both the client and any tax or legal advisors involved.  In addition, we offer support in the presentation of the findings to both the client and the advisors.

In 1803 Emperor Napoleon, burdened by the concerns and costs of a revolt in Haiti and a pending war with Britain, raised some cash by selling the 828,000-square-mile Louisiana Territory to the United States for about 42 cents an acre in today’s currency.  Just another example of where an informal evaluation might have helped.

Give us a call regarding this important business planning procedure for your clients.

When it comes to underwriting, one of our A + rated carriers follows a responsibly aggressive approach and looks closely at controlled impairments.

Don’t let one impairment, like elevated blood pressure force your client into a Standard Non-tobacco class.

Here’s an example for the record:

• 60-year- old female non-smoker
• Has no history of high blood pressure
• Her current BP is 150/92 (normal should be 140/90 and under)
• Applied for $1 million of Permanent Life Insurance

This carrier offered Standard Plus!

If you aren’t quoting Standard Plus for your healthy standard cases, your clients could be paying more than they need to.

Our Underwriting Team is here to help with all of your impaired risk cases.  Please contact us today for more information about this carrier and how we can help boost your sales.

Looking for a life-based long-term care product that can cover two people under one policy?  Sometimes clients are unsure whether or not they need protection – and may want to cover their spouse instead.

Kill two birds with one stone with a joint life product, which not only protects your client and his/her spouse, but also uses the same funds to do so.

This product offers the ultimate level of flexibility – it allows your clients access to a shared pool of long-term care benefits stemming from one premium payment.  In addition, the second-to-die whole life structure creates a larger pool of shared benefits than they would otherwise have from a single life policy.

And for your single clients, the policy can be structured for two family members instead – assuming they do not have an age gap of more than 25 years.

Compare your options:

Other benefits include reduced cost of insurance charges and underwriting flexibility.

To learn more about the life-based long term care product and additional products being offered in the asset-based LTCi marketplace, contact your LTCi Sales Rep today.

Most consumers believe that accidents are the primary cause of disabilities, but research shows that over 95% of disabilities are not work related; therefore workers’ compensation cannot be used.

Here are what consumers tend to believe versus the real facts:

• 37% have never thought about how they would protect their income if they got sick or hurt.
• Approximately 42% believe that they just need their sick leave and vacation days if disability were to strike.
• Their own “personal odds” of becoming disabled are 1 in 100, when in fact 1 in every 4 Americans in the workforce will become disabled.
• “Cancer is the leading cause of disability.” In reality, Musculoskeletal/Connective Tissue Disorders are the leading cause of disability at 28%, while cancer is the second leading cause at 15%.

As you can see from these statistics, it is crucial to educate consumers about the risk of income loss and how to better prepare for it.

Nearly 70% of consumers think that it’s important to start planning for a loss of income at any age – so there’s certainly an opportunity to connect with young consumers on how they intend to plan and maintain their financial independence if an illness or injury prevents them from earning an income.

Visit the CDA Website for more information about this specific survey, and contact your DI Sales Rep to learn more about marketing and selling Disability Income Insurance.