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Do your clients have clear visions of their future?

While many may have a vague sense of what they want, things to accomplish, or relationships they hope to develop, very few can actually articulate what they think their life will look like five or more years down the road.

As an advisor, it’s important to not only help your clients plan for the future they desire, but to also help protect it. And the best place to start is by protecting their income.

Income, when viewed over an entire career, is likely to be your clients’ single biggest asset. It is the source of funding today, tomorrow, and every day thereafter.

Income will pay for a lifetime of purchases, both large and small; it will fund the monthly cost of a mortgage, make up a portion of savings, and eventually support a comfortable retirement.

What if your client were to become disabled?

A 35-year old with an annual salary of $50,000 with 3% raise each year who experiences a permanent disability may lose up to $2,625,138 in potential earnings by age 67. Without a plan in place to protect that potential, your client is exposed to an enormous amount of risk. (http://www.whatsmyeiq.org)

How can you get the conversation started?

Start by asking your clients what would happen if they got sick or hurt and suddenly didn’t have the ability to earn their income.

• How long could they last before their lifestyle would be disrupted?
• If they have a family, how would they be affected?
• Would they need to dip into personal savings or other assets to cover expenses?
• What would be sacrificed to keep their life intact while they recover?

Your clients’ incomes fuel the engines that drives them into the future.

Without it, their ability to fund the futures they envision and that you helped to plan is in jeopardy. Now is the time to talk to your clients about income protection – there are affordable plans available to protect a most valuable asset.

Contact your DI Sales Specialist to discuss the income protection opportunity and the availability of plans to meet your clients’ needs.

Comedian Steven Wright tells of the time a burglar broke into his apartment while he was asleep, stole everything, and replaced it all with exact replicas.  Later his best friend walked in, looked at Steve and said, “Do I know you?”

Americans have never been averse to imitations when the original was unavailable, especially when the substitute still did the job and was more economical as well.

This passion for the more commonplace might help you make sales to clients who have maxed out their qualified retirement options and are looking for an effective way to accumulate more for supplemental income when they no longer work.  In this case there is an “imitation” that may be better than the original.

Consider a Roth IRA, best described as “a reverse traditional IRA.” Contributions are after-tax and distributions are tax-free.  But consider, too, an over-funded universal life policy that builds significant cash value in later years.

Compare the features and uses of the two vehicles:

The perceived value of an executive bonus plan is greatly enhanced when the policy is designed as an over-funded contract and the possibility of withdrawals to supplement retirement income is highlighted at the time of implementation.  But any client is more inclined to consider use of an insurance contract for retirement purposes when the similarities to a Roth IRA, or any qualified plan, are explained.

Speaking of similarities, there is the story of a citrus farmer in the Central Valley who has developed a grapefruit that looks exactly like an orange, except that it is bigger and it is yellow.

Get in touch to discuss how a client’s retirement can be better, or with any other planning questions that arise in your casework, at either 706-354-0401 or tom@cpsadvancedmarkets.com.

Term Life Insurance is generally purchased to replace the income of the bread winner of the family and to provide sufficient financial liquidity for the family to satisfy any outstanding debt, such as a mortgage or medical bills.

These days, many clients are looking for ways to save money, and are cutting back on luxuries as well as many day-to-day necessities.

There is a way to keep clients covered, while at the same time saving them some premium dollars – and generating some commission dollars for you.

The Income Protection Option (IPO) is a product feature designed to help you meet the financial needs of your clients, with premiums 20-25% lower than traditional Term Life Insurance.

By merely restructuring how the clients’ death benefits will be paid out, the policies can provide a guaranteed annual income stream to the surviving heirs for as many as 30 years, or as few as five.

Case Study

• A case was placed in April 2012
• The 20 year, $2.5 million term policy was issued at a standard risk class, with a monthly premium of $577.00 for a male age 47
• Now the client is age 48
• I designed a new policy that includes the Income Protection Option – which will pay $500,000 upon his death, and provide a $100,000 annual payment to the family for 20 years – same total payout of $2.5 million
• The new monthly premium is $476.73 – the client now has a new 20 year term policy costing $100 less every month – lowering the Life Insurance cost by 20%

Income Protection Option will not fit in all sales scenarios; however, we encourage you to review the term cases you have written over the past few years.  Reach out to your clients – ask if the extended death benefit payout would work for them.

Contact us today for more information.

Just as basketball fans had to get used to the 3-point shot first debuted by the NBA in the 1979-80 season, we must get used to current trends in underwriting.

A new blood test was introduced into the game and has been around for several years now.  It’s called the proBNP.

What is it?  The proBNP blood test is a marker for overall cardiovascular risk and a marker of long-term mortality in individuals with heart disease.  It is released by the heart as a natural response to when the heart is not strong enough to pump adequate blood and nutrients to meet the body’s needs – when it is deprived of oxygen, or when the main heart muscle is enlarged from working too hard.

If the proBNP is abnormal on an exam lab panel, some carriers will automatically decline the applicant or ask for an additional cardiac work-up at the his/her expense in order to reconsider.

However, if the proBNP is favorable on an exam lab panel, one of our A-rated carriers can use the result as an underwriting credit for applicants ages 70 and up.

Here’s an example:

• Male, Age 75, Non Smoker; Seeking $500,000 of UL coverage
• History of a TIA (mini-stroke) 3 years ago
• Followed closely by his physician
• Insurance lab panel showed a proBNP of 55 (normal)

Under normal circumstances, this would be a mild substandard rate – however, with the credit, he can now qualify for Standard.  That’s a 3-pointer and a win-win for us all!

Contact your Life Underwriting Department for more information.

One challenge with presenting the need for long-term care is that it is viewed as a risk, not a certainty.

It’s not that your clients don’t want the coverage, but convincing someone to allocate funds towards something they may never use can be a difficult objection to overcome.

Good news – Asset Based Long-Term Care (LTC) with Guaranteed Premiums paid for life is here.

It allows your clients to use the LTC benefit if needed – and if they don’t, they can leave the death benefit or accumulated value to their estate.

Clients receive a guaranteed amount of life insurance.  All of which may be used for qualifying long-term care expenses – also, the premium is credited with a guaranteed interest rate, raising the cash value each month.

With the use of the OneAmerica Care Solutions® Rate Calculator, financial advisors can run a quote for key Asset-Care individuals anywhere, anytime.  Plus, get an easy to understand take-home guide for your clients.

Access the OneAmerica® Care Solutions Calculator and run a quote today

Contact your LTC Sales & Marketing Team to learn more.

Could you afford your home without your income?

For some people, “income protection” is a phrase that strongly resonates with their everyday lives.

Consider This

• 71% of American employees live paycheck to paycheck.
• 62% of all personal bankruptcies filed in the U.S. in 2007 were due to an inability to pay for medical expenses.
• In the last 10 minutes, 490 Americans became disabled and cannot perform their job duties for at least 90 days due to an illness or injury.

The Income Protection Sales Approach

Below are script ideas to get you started selling Individual Disability Income (DI) insurance using the income protection sales approach:

• Why do you go to work every day?  What if you couldn’t?
• What would your life be like if you couldn’t earn a paycheck because of an unexpected illness or injury?
• How would you pay for the big things in life like housing, groceries, utilities, etc.?  And what about the little things like date nights, kids’ dance lessons, vacations?
• Protect your paycheck with Individual Disability Income (DI) Insurance.  If you become too sick or hurt to work, it provides monthly benefits to help you maintain your lifestyle.

Get started approaching clients today.  Use this printed approach presentation.

Contact your Disability Income Specialist today for more information and marketing materials.

If you wanna feel better about yourself just do an Internet search on something like Celebrities Without Makeup, or Un-photo-shopped VIPs.  It will do your heart good to see how plain looking or, in some cases, how down-right ugly-wuggly many icons among the “beautiful people” really are in their natural state.

Personalities whose reputation rests significantly on their physical attractiveness even have a critical team member responsible for the prior scouring of any pictures intended for distribution to assure that nothing un-doctored, un-enhanced, or unflattering slips through for consumption by the masses.

The Lady and Lord Mucks of the entertainment world understand that they work in a tough marketplace and things simply sell better when they look good.

Perhaps we insurance advisors could take a lesson from that when showcasing our own products and services.  The difference is that a properly accoutered insurance-funded benefit plan will not only sell more easily, it will remain an ongoing thing of attractiveness and substance to those it protects.

A prime example is the often unadorned (and as a result the often unsold) executive bonus arrangement.  The plan chassis is simply an executive-owned policy paid for by the employer.  But creative use of some of its flexible features makes it the most attractive non-qualified benefit in most business situations:

Eliminate sticker shock

The amount of premiums paid by the employer is reported on the executive’s W-2.  Avoid the sting of a year-end tax increase by adjusting the bonus so that the after-tax amount covers the planned premiums and the remainder can be withheld to cover taxes on the total bonus on April 15.

Forget about recovering costs

Too many employers worry about getting premiums back if the executive leaves after a couple annual bonuses.  If recovery is a serious issue than use a split dollar plan.  Otherwise provisions requiring reimbursement are burdensome and reduce the attractiveness of the plan to the executive.  An employer can reduce risk by funding a policy at lower premium levels in the early years, then increasing the bonus amount as the service period lengthens.

Make it a “gold watch” as well

A policy that must be maintained by the executive beyond retirement can be seen as an anticipated burden that takes some of the luster off the current benefit of the coverage.  Fund the policy in a manner that will achieve paid-up status and allow the executive to carry the self-sustaining policy into his or her non-working years.

Make it a “living benefit” as well

Adding a long-term care rider gives the executive lifetime protection as well by assisting with costs of care using tax-free accelerated benefits.  Funding the policy to paid-up status at retirement gives the executive this protection through his or her entire life.

Economize using a “two-policy solution”

A paid-up permanent policy, especially with an LTC rider, can get costly.  Recognizing that death protection needs are higher during the working years, structure the plan so that the bulk of the coverage is provided with a level-premium term policy for the duration of the anticipated working life.  This can be dropped at retirement when no longer needed.

In addition, carry a smaller permanent policy whose death benefit will cover a significant portion of costs if long-term care expenses arise, but will still provide adequate estate liquidity if long-term care needs don’t arise.

The ultimate futility of cosmetic or techno-treatment to shore up current or deteriorating beauty was summed up best by comedian Moms Mabley when she said, “Beauty is only skin deep, but ugly is to the bone!”  But there is no decline in the beauty of a well-designed benefit plan that will keep good executives in the company fold through the provision of employer-provided lifelong protection.

Call with questions on your next case at 706-354-0401 or tom@cpsadvancedmarkets.com.

Clients often think of life insurance solely as an instrument to protect them in the event of premature death, unaware of the valuable tax benefits that are afforded through cash value life insurance.  And in today’s volatile marketplace, clients that are saving to retire need all the help they can get.

You have access to many products that can provide your clients with tax favored cash accumulation and if structured properly, will also provide for non-reportable, tax-free income.

The ability to specify a premium schedule is one of the great features available in our cash value life insurance products, removing the objection that the policy costs too much money.  By educating your clients about the benefits of cash value life insurance as a long-term savings vehicle, they are likely to fund the policy with as much premium as they can reasonably afford.

While term insurance may be efficient for replacing income, or indemnifying debts, clients are very likely to outlive their level benefit period – receiving no return on their premium contributions.

How You Can Help

Recommending a cash value insurance policy at a younger age and more favorable health will better prepare your clients to address critical financial concerns such as retirement income planning, college tuition funding for loved ones and also paying for unexpected events (medical emergencies, litigation, home renovations, etc.) in their family.

The longer that you can fund a policy and allow the cash value account to compound interest and grow, the larger the potential income stream will be.  One of the unique features of using life insurance is the death benefit – if the insured dies prior to accessing their cash values, it will provide a tax-free return on the premiums paid to date.

Many of your clients want to have a conversation about their options in regards to preparing themselves for retirement, but feel overwhelmed by the thought or do not know where to start.  If you haven’t shared how cash value life insurance can play an integral role in their long-term financial planning strategy, you are likely missing out on easy sales; leaving the door open for another broker to have that conversation with them instead.

Your Life Sales Rep can provide you with an understanding of the different products available for cash accumulation.  We can provide you with customized solutions for each client.  Whether they can spend $100/month, $1,000/month or $10,000/month, we can create a solution that fits their budget.

Contact us today to learn how you can begin to position cash value life insurance as a core product offering to all of your clients.

One of our top rated carriers made changes to their wellness crediting program to automatically give clients who maintain a healthy lifestyle the potential to be upgraded to a better underwriting offer and price.

This program is open to:

• All Ages
• All Face Amounts
• Most of their product line (some product exceptions apply)

An insured may be credited up to one classification, including from Preferred to Preferred Plus. This crediting program can improve substandard ratings, too.

Some of the criteria includes:

• BMI range of 22-29 (ages 18 and older)
• Untreated blood pressure < 120/80
• No incidents of CAD, diabetes or cancer in parents or siblings prior to age 60 years, or both parents live to age 75 or older
• Normal routine colonoscopies, mammograms, pap smears, CBCs, skin checks in the last 3 years
• Hemoglobin AIC readings 5.0 – 5.5 range in the last 12 months

Call the Underwriting Department to discuss your client’s health history and this program for the best possible outcome!

How do you get people to sit up and take notice?  Talk taxes.  Tell them you have a way to help them reduce their state and federal tax bill.

A Long-Term Care Insurance (LTCi) policy has the potential to help people lower the amount they pay in taxes.

And at the same time, LTCi provides valuable insurance coverage that can help them remain in their home, protect their retirement nest egg and ensure they won’t have to rely on their kids to take care of them.

LTCi Premium May Be Tax Deductible

Each year, the federal government sets guidelines for tax deductibility.  Individual policyholders may be able to deduct a portion of the premium paid for a tax-qualified LTCi policy.  This is called eligible premium.

Business owners who use business dollars to purchase LTCi can also experience significant tax savings based on the tax structure of the business:

• Self employed business owners may deduct eligible premium paid for the owner, spouse and dependents.  They also may deduct the total premium or actual premium paid for employees.
• Owner/employees of C Corporations may deduct actual premium for the owner/employee, spouse, dependents and employees.

Policy Benefits May Be Tax Free

Benefits received under a tax-qualified LTCi policy are intended to be tax-free as long as they do not exceed the greater of actual qualified LTC daily expenses or the IRS’ per day limitation.

Out-of-Pocket LTC Expenses May Be Tax Deductible

Generally any LTC expenses the policyholder pays out-of-pocket may be claimed as a medical deduction on a federal income tax return.  The only exception is payment for home care provided by a family member who is not a licensed health care professional.

Some States Also Offer Tax Deductions

Currently a number of states offer tax deductions and/or credits for people who purchase qualified LTC Insurance policies.  And these state deductions and credits are in addition to those offered by the federal government.

There’s No Better Time to Talk Taxes

Everyone is looking for ways to save, which is why now is a good time to talk to prospective clients about the tax advantages of purchasing LTCi.  They’re sure to be more receptive when they learn that purchasing the coverage they know they need also can help them reduce their tax bill.

For more information, contact your LTC Specialist today.