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It wasn’t too long after I turned my face from home and toward the world that I bumped into the reality of having to fend for myself at mealtime.  With few culinary skills and less patience I quickly adopted the philosophy that if something took longer to make that it did to eat, then the dish wouldn’t have a place on my bill of fare.  The practice is still my prime directive when left to my own devices for the next feed.

That’s not to say I don’t appreciate higher cuisine when those with greater skill and patience are willing to attend.  Nor that aptitude goes unnoticed when the one who prepares a multi-course, multi-dish spread with its varying cook-times and procedures manages to make everything come out in a coordinated manner at the right time.

But it’s really not any different when we are involved in an insurance sale where the policy is to be owned by an irrevocable trust.

The important difference is that you don’t have control over all the elements.

It usually goes something like this:

• The clients do not want to spend money on a trust till they know they can get insured.
• Once they get an offer they meet with an attorney to:
  • Figure out what they want.
  • Instruct the attorney to draft the trust.
• The attorney is as slow as molasses in January.
• The clock is ticking on the carrier’s offer.
• The deadline comes and the trust ain’t done.  Sometimes we are able to get an extension on the offer only to find the attorney is even slower than molasses in January.

Despite the fact that the information on the trust that will be the owner and beneficiary of the policy is unknown, work can begin on processing and underwriting.

Simply have the insured/creator of the trust sign the app as insured in all necessary places.  For owner and beneficiary put “trust TBD”.  Because the application becomes part of the policy it will be necessary to submit a new Part I prior to issue and after the trust is established with the trustee signing as owner and the trust designated as the beneficiary.

It the worst happens and the trust is not completed before the deadline for delivery then one of two common scenarios usually plays out.  If a grantor trust is anticipated the insured can accept ownership and later sell the policy to the trust.  Because it is not gifted there is no 3-year look-back.  Because it is a grantor trust there is no transfer-for-value.  Some choose an alternative strategy wherein a “surrogate owner” is used who will eventually gift the policy to the trust.  This is dicey.  There is no guarantee the surrogate will, in fact, gift the policy at the appointed time, let alone the proceeds if the insured dies too soon.  In either case there could be significant estate or gift taxes due.

The best approach is, once a medical offer makes the need for a trust evident, to hire an attorney who will confirm in writing that he or she will get the job done in a timely manner.

There are many issues so call for assistance on your casework dealing with insurance in trusts of any kind (revocable, irrevocable, charitable, special needs) and, while you’re at it request a copy of list, Top Ten Tasty Meals in Under Ten Minutes.  Call 706-354-0401 or wire tom@cpsadvancedmarkets.com.

Clients and prospects increasingly understand the need to supplement their retirement through their own savings efforts – as Social Security and company sponsored pension plans may not provide sufficient income for their retirement goals.

Qualified plans such as 401(k)s are an excellent way to save for retirement, but they are limited and are only available if provided by an employer.

Traditional IRAs and Roth IRAs also offer additional saving opportunities, but individuals must meet specific income and contribution limits in order to use these qualified accounts. As a result, clients and prospects need help finding additional solutions that will help them fill the retirement income gap.

Your clients recognize that they need to save as much money as possible, as soon as possible, in order to secure their financial futures.  Fortunately, you are well equipped to help clients address their retirement income needs by relying on the knowledge and expertise available to you.

Life Insurance, properly structured, can be a valuable tool for clients to supplement their retirement planning efforts.

During their working years, death benefits provide cash when it is needed most – but these funds can be used to decrease debts and replace income so that loved ones can maintain their standard of living.

At retirement, your clients can access policy cash values via tax favored withdrawals and loans.  In addition to these benefits, clients can also choose to add a long-term care rider that will provide valuable benefits should they have a qualifying long-term care expense.

For more information about how you can help your clients address one of their biggest financial challenges, while securing valuable protection against an untimely death or devastating long-term care event, please contact your Life Sales Rep.

Sleep apnea is a serious sleep disorder.  If left untreated, it can result in a growing number of health problems including high blood pressure, stroke, heart failure, diabetes and depression.

Here’s the good news – it is possible to get Preferred considerations on successfully treated sleep apnea.

If the condition is mild (Apnea Index below 20 and oxygen saturation greater than 80% on sleep study), all Preferred classes can be available if treatment is successful.  More severe sleep apnea conditions may qualify for Standard Plus or Preferred if successfully treated.

Take a look at this case study:

• 50- yr- old male
• Small business owner applying for $2 million of term coverage
• Non Smoker, with no tobacco use in 30 years
• No adverse family history
• Began complaining of fatigue five years ago
• Sleep study showed an Apnea Index of 30 and oxygen saturation of 80%; CPAP was recommended
• A follow up sleep study 18 months later showed an Apnea Index of 2 and oxygen saturation of 98%
• There is documented compliance of CPAP use and no further symptoms
• EKG and lab studies were within normal limits; Cholesterol of 185/ratio of 2.3
• Underwriting Decision: Preferred Non Tobacco

Treatment success is shown by a follow up sleep study and documented compliance of the recommended treatment.

Contact your Underwriting Team – regardless of the impairment, we know what it takes to get you the best rates for your clients.

If you have older clients sitting on nonqualified assets — especially clients who may have difficulty qualifying for traditional long-term care insurance — there’s a smart strategy to help them get the protection they need, without incurring tax penalties or risking legacy planning.

For clients over 70, it can be a winning combination!

The LTC Catch-22 and How to Solve It

According to the Census Bureau, the fastest-growing segment of the population is adults age 85-100. Because of improved health care and medical technology, many are expected to live even longer.  Unfortunately, while this portion of the population swells, few are holistically prepared for a long-term care event and the costs associated with it.

Many of them want long-term care coverage, but they can’t afford it, or they don’t qualify for it.  Others are in denial that they would ever need it or are misinformed as to what coverage entails.  Finally, some are hesitant to pay premiums for a policy they may never file a claim on.

Fortunately, many of the same individuals, those ages 70-85, could be ideal candidates for a Hybrid Long-Term Care Annuity.

The way the products are designed, the client will either use the long-term care benefit without incurring any tax penalties or, if they never have a long-term care event, can pass the death benefit on to a beneficiary.

Nonqualified Annuities and the Key to Protecting More Retirees

It’s well known that nonqualified deferred annuities are a popular solution for Americans planning their retirement because they offer tax-deferred growth and the opportunity to provide a source of income.

According to a 2013 Gallup Poll where nonqualified annuity participants were interviewed, 86% of people buy one for its tax-deferred accumulation. While some decide to annuitize their contract, most clients never do.

One of the things we train people to ask clients who have nonqualified annuities and don’t plan to annuitize them is ‘What would cause you to spend this money?’  It turns out 73% say it is an emergency fund, they do not need the income, it would be in case they need assistance.

The downside for many clients using their current, nonqualified funds for a long-term care event is that it can come at a hefty price with fees and taxes.

Tucked inside the Pension Protection Act of 2006 is a special exemption for those holding nonqualified annuities.  The provision allows policyholders to make withdrawals for long-term care events (such as at-home nurse visits and live-in facilities) tax free.  These withdrawals are also not counted as income but rather as a reduction of cost basis.  The catch is that, because nonqualified annuities are a form of tax-deferred growth, only select products qualify.  The exemption allows policyholders the ability to access the bases of the annuity rather than the growth, preventing a taxable event from occurring.

An Annuity Offering Hybrid LTC

While many annuities may carry long-term care provisions, few can touch the benefits that a true Hybrid LTC Annuity can offer.

That starts with an annuity’s easier underwriting requirements.  I tell people looking for long-term care that underwriting is so much easier than on traditional policies.

Contact your LTC Specialist for more information on this opportunity.

Federal Employees receive income protection through their work, but most don’t have any idea what their long term disability plan would actually pay if they got sick or hurt.  After reviewing the facts about what benefits are actually paid out, there could potentially be a big challenge for most of these employees if they had any kind of a long term illness or injury.

Federal Employees are covered under a plan called the Federal Employees Retirement System (FERS) – it pays the employee 60% of their taxable income for the first 12 months and after a 30-day waiting period.  Beyond that, the benefit drops to 40% and benefits can be offset up to an additional 60% of what is received by Social Security.

There are currently over 2,697,000 civilian federal employees with Disability Income Protection under the FERS plan – and over 84% of those do not carry any supplemental coverage.

I recently spoke with a 43-year old client of mine that is an Investigator with the Department of Labor – she has been with the DOL for 8 years and would probably be there until she retires.  We sat down and did the math together on what her benefits would be if she got sick or hurt and couldn’t work.

Her current taxable monthly income is $7,850.  If she were to get sick or hurt for a period over 1-year, her FERS Disability Plan would pay her, $3,140 taxable income until she is 62 years old.  After a modest combined tax rate of 25%, her net monthly income would be $2,355.

Her exact words were, “I had no idea. I could barely make my Mortgage Payment with that”.  I then reminded her that if she qualified for social security, her FERS benefits could be reduced by up to and additional 60% of what she receives from Social Security. That’s the Shocking Reality.

Work with carriers that specialize in offering supplemental coverage to Federal Employees.  Call your DI Sales Specialist today – we can show you how to grow your business by offering coverage to the Federal Employee Marketplace.

If you have read all three parts of The Bounty Trilogy then you are familiar with the often overlooked, but perhaps more compelling part of the tale.  Most are familiar with the mutiny aboard the H.M.S. Bounty and of the mutineers attempting to escape the long arm of British naval law by establishing an intended utopia on the uncharted Pitcairn’s Island.

Ignored is the fate and feat of Bounty Captain William Bligh who was set to sea with his 18 loyal crewmen in the ship’s 23-foot launch with few supplies – 4,000 miles between the small boat and the nearest safe British haven on the island of Timor.

In a remarkable act of seamanship, Bligh plied the Pacific waters for 47 days bringing his men to safety, each subsisting on a daily allowance of a couple ounces of bread.  Lack of resources forced the sale of the launch to raise money for the return to England.

And there was insult to injury when the sale took place in a Dutch auction, where bidding starts at an excessive price and is slowly lowered until a buyer is found.  Few like a Dutch auction because it doesn’t create a true free market environment that results in the best price for the seller and a true opportunity for every buyer.

Consider This:

Thank goodness that when shopping carriers the bidding goes in the other direction.  Consider a recent case where father/husband/doctor made $500,000/yr. and had $5,000,000 coverage in force.  He wanted $5,000,000 coverage on the non-working wife/mother.  If he lost her, his intention was to quit work and stay home with the kids.  The wife had $1,800,000 in force which she would replace.

Before wasting time on medical underwriting – it is good to, first, make sure a carrier will give you the amount of coverage sought, especially regarding coverage for family members other than the bread-winner.

All carriers require at least the same amount on the working spouse, but consider the range of results for financial offers in this case:

• Company A – $1,000,000 (i.e. they felt the mother was already over-insured)
• Company B – $1,500,000 (low reinsurance limit, didn’t want to explain any more to a re-insurer)
• Company C – $2,500,000 (good large carrier, would give 100% of the amount on the working spouse, but only up to $2,500,000)
• Company D – $5,000,000 (no questions asked)
• Company E – $5,000,000 (no questions asked)

Finding up front how much coverage is allowed before taking apps can save time and embarrassment – just one more example of why the spreadsheet doesn’t tell the whole story!

Call us and we’ll do the leg work for you and discuss other reasons one carrier may be a better fit than others.

Captain Bligh was eventually acquitted with honor in the formal inquiry regarding the Bounty mutiny.  He went on to sixteen more assignments (mostly commands) eventually reaching the rank of Rear Admiral.

Business owners are faced with many challenges when doing the planning related to a successful exit.  Typically, business owners focus on day-to-day operations far more than on retirement, or on keeping the business going in the event of death.  Business owners need your help!

You can rely on our expert guidance – we’ll help you target potential opportunities and navigate through the entire planning process.

We offer the following exit planning tools – at no cost:

• Access to a Succession Consultation Group
• Materials that will help motivate and engage your clients
• Professional review of a completed business succession fact finder
• A report summarizing the findings
• Participation on conference calls with you and your clients
• Analysis including applicable ideas, agreements and concepts
• Undeniable value to your client

Target Market:

• Owner aged 45-60
• Substantial owner net worth
• Owner wants to exit business in 2 to 10 years, or transfer the business at death
• History of stable earnings over a period of years
• Annual revenue of $2 to $50 million
• Sustainable and transferable cash flow
• 5 to 100 employees

We deliver the most relevant tools for you to use – please contact us today for assistance with growing your share of sales in the business insurance marketplace.

We see many applications that were initially quoted and subsequently submitted using rate classes that the client has no chance of qualifying for – and it should be no surprise that many of these policies end up being closed out or not taken by the insured.

There are no secrets to the medical underwriting guidelines for each carrier – and our team of specialists can help you to accurately quote and qualify your clients for coverage before you ever take an application.

Quoting accurately from your first presentation will increase your placement ratio and help you make more money

While it may take an extra two or three days at the outset to determine the best fit carrier and rate class, it’s far better than the additional two or three weeks that it takes to close a file and start a new application process with a different carrier.

With online technology and competing producers constantly promoting the best available rates in order to get the prospect’s foot in the door, you can stand out from the crowd by explaining to your clients why it is necessary to gather information concerning their family history and personal medical history before you ever show them a price quote.

When you present your client with a summary of all the potential carrier offers, it will be apparent that you are working harder than the competition and are acting with their best interest in mind.

We offer a number of one page fact finders on our website which can help you obtain the necessary information regarding any impairment or condition during your first client meeting.  The medical data will be needed to provide pricing using an accurate rate class that your client may potentially qualify for.  This pre-underwriting exercise will prevent you from showing Preferred Rates to a client who is more than likely going to receive Standard or even Substandard rates.

If you are looking for resources that can assist you in gathering all of your client’s personal information up front to ensure a smooth sales process, our team can provide you with a series of talking points or even a fact finder questionnaire to make the pre-underwriting turn-key and simple.

Contact us today!

Long-Term Care Insurance is an emotional sale.  There’s a growing trend that shows many people who purchase a policy do so because they know someone who needed LTC.  They heard first-hand accounts of the importance of a caregiver, the high cost of LTC services and the impact that can have on a family.

Some people also have seen firsthand the benefits of having an LTCi policy.  They saw how it allowed a friend or loved one to choose a plan of care that fit their needs.  And they know how it protected the family.

The fact is, people buy LTCi because they love their families.

Rather than focusing your sales presentation on benefits and features of the policy, focus your conversation on how the need for LTC can impact the client’s family.

5 Conversation Starters That Can Help You Make the Sale:

• I’d like to talk to you about living a long life and how to be prepared in order to protect your family.
• Long-Term Care Insurance is not protection for you.  It’s protection for your family.
• Long-Term Care is a family issue.  Do you have a plan to protect your family?
• It’s not a question of who will take care of you.  Your family will because they love you.  Instead, it’s a question of how your family will take care of you and the impact it could have on them.
• Long-Term Care Insurance allows your family to keep the promise they made to take care of you by providing the funds to help them do it better and longer.

Contact your Long Term Care Specialist today for more information.

While the chances of surviving a critical illness such as cancer, heart attack, or stroke are greater than ever, living with the condition can create a severe financial hardship for many of our clients.

Traditional health insurance plans cover medical expenses such as Hospital, Physician and Pharmacy. However, additional costs such as the insurance deductibles, child care, insurance premiums, and short-term home health care must often be paid by the recovering patient directly.

Critical Illness Insurance pays a tax-free lump sum payment on first diagnosis of any one of a list of 20 serious illnesses – including cancer, heart attacks, or stroke.

Claims statistics suggest we are 5 times more likely to survive rather than die before we reach age 65 of cancer, heart attack or stroke.

The good news is, medical advances make it so more people are surviving conditions that might have killed us years ago. For example, more than 90% of men diagnosed with testicular cancer are still alive 5 years after first diagnosis, and 80% of women diagnosed with breast cancer have the same survival rate. Over 5.8 million stroke survivors are alive today, many of them with permanent stroke related disabilities.

We have availability to several Critical Illness carriers that offer unique policies to meet your client’s needs

I have found one plan in particular that offers a very comprehensive benefit plan at a very affordable the cost.

Think of putting your premium dollars into a safety deposit box and if you are diagnosed with one of the 20 covered conditions (including Alzheimer’s Disease) the policy will pay the face value. Or if you die of one of the covered illnesses the policy will pay the face value to your beneficiary. If you should die of any other reason, 100% of all premium paid towards the plan will be returned to the beneficiary as a tax-free death benefit.

While most critical illness policies have a reduction of benefit at age 65, we have Critical Illness contracts that extend the full benefits to age 70.

The likelihood of surviving a critical illness grows every year as does the threat of being diagnosed. The coverage is affordable. A $50,000 benefit for a male, age 40, will cost approximately $52 a month. In addition to the lifetime version of the product, there is a choice of 10-15-20 and 30 year coverage periods. There is a plan to fit any budget with benefits up to $500,000.

Critical Illness Insurance is one of the best kept secrets in the industry and provides advisors a great opportunity right now to meet more clients, help more families and increase sales. Look to your clients with a family history of Cancer, Heart Disease, or Hypertension. They are very likely to be interested in purchasing protection.

Contact your Disability Insurance Specialist for detailed information about a plan that meets your client’s needs and budget.