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In addition to the simplicity, ease of implementation and administration, and plan design and funding flexibility, an executive bonus arrangement can meet an array planning needs if presented properly to the employer and comprehensively to the executive.

Life for Life or Life for Less

The need to protect against death isn’t always one that lasts a lifetime.  If coverage is placed in anticipation of future estate tax liability, then the policy better be there until the end – unless an insured wants to bank on the repeal of the inheritance tax during some rare moment of temporary governmental sanity.

On the other hand, if the purpose is merely to replace income lost due to death prior to retirement, then term insurance may be a better and more economical choice.  There is no reason a plan cannot fund term insurance.

An Additional Resource for Retirement

In an age of restrictions on access to qualified retirement planning opportunities for the highly compensated, more employees are using over-funded permanent policies as a sort of “Super-Roth IRA” to build cash that will be available on a tax-advantaged basis, and to supplement other retirement fund sources in later years.

A plan participant has the freedom to choose whether he or she wants to design their policy under slim or fat funding scenarios, in order to meet their particular needs.

Sometimes “Policies” is the Best Policy

It may better suit multiple needs if the amount of the bonus to an executive is used to purchase multiple policies; e.g. a term policy to protect for income replacement, and a permanent product for lifelong needs.  At retirement, the term policy can lapse or can be converted if the need for permanent protection has increased.

Providing for a Long-Term Care Event

A participant should consider the option of adding a rider that will allow early access to benefits should long-term care be needed.  Withdrawals for long-term care expenses may frustrate the effectiveness of the policy, if the employee is over-funding the contract for use as a supplemental retirement vehicle.

Again, this problem can be avoided by using a two-policy executive bonus arrangement – one that is over-funded for retirement purposes, and the other with a LTC rider.

And Maybe a Hint of Disability Protection

The waiver of premium rider has been pushed to the side in most sales presentations today, but its use can assure that policies will be maintained  in the event of a disability, and even if employment ends prior to retirement age for that reason.

To Infinity and Beyond – A Bonus is a Bonus is a Bonus

The executive bonus can be used to fund any vehicle agreed upon by the employer and the employee.  If additional life coverage is not needed, then consider funding an annuity or a free-standing long-term care policy.  All aspects and advantages of a 162 bonus plan still apply.

Call for design and sales support for a business prospect that needs a simple, non-invasive benefit plan for key employees.

Did you know that Non-Smoker rate classes are available on marijuana use?  In some cases, Best rates may be possible.

Take a look at these potential rate classes for recreational marijuana use:

• 1 time or less per month may qualify for Preferred Plus Non-Smoker
• 3 times or less per week may qualify for Preferred Non-Smoker
• Up to 4-6 times per week AND no more than 1 time per day may qualify for Standard Non-Smoker

Medicinal marijuana use is underwritten differently than recreational use.  Rate classes for medicinal marijuana are based on the underlying condition being treated.  Some carriers may require a valid prescription for eligibility, particularly in cases involving daily use.

Contact the Underwriting Team for best possible outcomes on marijuana use.

Long-Term Care can be a tough subject.

Often times, you have to do a little detective work to ensure your cases are processed through Underwriting quickly.

Here are six things you can do to help uncover important information the underwriter needs to issue your case.

Ask about specialty physicians

Knowing if a specialist is treating your client gives the underwriter clues about their health condition.

For example:

• If your client had bypass surgery, ask whether they have a cardiologist.
• If they had joint replacement, ask if they have an orthopedist.
• If they have rheumatoid arthritis, ask if they see an arheumatologist.
• If your client is taking multiple medications for depression and anxiety, ask if they have a psychiatrist.
• If they have diabetes, ask if he sees an endocrinologist.

Pay attention to the date of diagnosis

A recent diagnosis (within six months to one year) may not be enough time to assess the client’s stability.

Note the date of the last doctor’s visit

If it’s been over two years since your client’s last physical exam and lab work, they won’t qualify for preferred underwriting.  Also, pay attention to recent doctor’s visits.  Ask your client if they have a follow-up visit planned.  Knowing an applicant is undergoing treatment allows the underwriter to order an attending physician’s statement immediately, instead of waiting until the client mentions it during the personal health interview.

Listen carefully for these things:

• Pending tests – Be sure to ask if the client is scheduled for a test that has not yet been performed.
• Recent surgeries – Ask what type of surgery the client had.  Was a malignancy found?  Has the wound healed?  You also should ask if the client is released from care or requires further follow-up.
• Physical therapy – Ask about the diagnosis.  Is the pain or condition resolved?  Do they require further treatment?  Find out if the physical therapy helped or if surgery has been recommended.

Try to identify the diagnosis behind the medication

Many people refer to a medication in terms of the symptoms it addresses.  For example:

• Your client says they take a “water pill for fluid.” This can mean several things, from occasional lower extremity edema to something more serious, like heart failure.  Also, pay close attention to the medication dosage as this can be a clue to your client’s condition.
• Many applicants will indicate they take a “blood thinner.”  Ask about the diagnosis.  Is there a history of stroke or mini-stroke?  Has the client had any type of heart surgery and, if so, when?  Has the client had blood clots?  If so, how long ago?  Has the client had surgery of the leg?
• If your client says they take a medication for “bones” or to “prevent osteoporosis,” ask if they’ve had a bone density test done in the past two years and what the doctor told them about their bone density.  Typically, these medications aren’t prescribed unless bone density tests have indicated the applicant has some type of bone loss, which impacts insurability.
• If your client mentions taking a medication for “arthritis,” you should suspect rheumatoid arthritis or another serious condition and rate accordingly.
• If your client lists pain medications, specifically narcotics, it’s very important to find out the reason the medication is used, how often it’s taken and how long the client has used it.  For example, does your client use it only after they mow the lawn or do they have pain on a daily basis?

Question everything

If you have a client who is young, but not working, ask why.  Do they have chronic health conditions that prevent them from working?  Are they collecting disability benefits?  The underwriter needs to know.

Please contact your LTC Specialist 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 stays, physician’s fees and the pharmacy bill.  However, additional costs such as the insurance deductibles, child care, insurance premiums, and home health care must often be paid for by the recovering patient directly.

Critical Illness Insurance pays a tax free lump sum payment immediately upon first diagnosis of any one of a list of 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 enable people to survive conditions that could 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.  There are over 5.8 million stroke survivors are alive today, many of them with permanent stroke related disabilities.

How does it work?

We have access 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 cost.

Think of putting your premium dollars into a safety deposit box and if you are diagnosed with one of the 12 covered illnesses (including Alzheimer’s) 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 75.

Consider this:

The likelihood of surviving a critical illness grows every year and so does the threat of being diagnosed.  The coverage is very affordable.  A male age 40 can secure a $50,000 critical illness benefit for only $52.56 per month.  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 before they are diagnosed.

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

While many advisors implement conservative, guaranteed solutions in trust owned policy arrangements, this is not a universal practice.

In a low interest rate environment, many policies that are held in trust may be under-performing and do not have the underlying guarantees to ensure that the policy does not lapse prematurely and that the primary objectives for the insurance planning are obtained.

Consider This Scenario

In a recent conversation with a carrier representative, they shared an instance in which the trust beneficiaries brought a law suit upon the writing agent, the broker general agent and also the carrier for failing to implement a sound insurance strategy and perform periodic reviews to avoid a premature lapse.

Fortunately, there had been a policy review conducted within the last 36 months in which the under-performance was identified and an alternative solution was recommended.

The insured (parents of the trust beneficiaries) elected not to pursue this recommendation and failed to inform their children that the review had taken place.  The courts held that this effort was enough to avoid adverse litigation and the case was dismissed.

Penetrate A New Market

This story can be a great conversation starter with any CPA’s, Estate Planning Attorney’s or Trust Companies.  You may even know a friend or family member who is serving as a trustee who could be exposed to this potential liability.

By offering a complimentary policy review of any trust held policies, you can strengthen your relationships with these professionals – which can lead to future referral opportunities.

There may even be a more cost effective policy solution available even if the current plan is not under-performing.

We can help streamline the policy review process and for more complex trust planning designs; we can leverage our Director of Advanced Markets, Tom Virkler.

Given that most policies held in trust are larger face amounts on older individuals, doing one of these reviews each month could result in a sizable increase in your income.

For assistance with a policy review, please contact your Life Sales Rep.

Does permanent life insurance have a place in your clients’ overall financial portfolios?

Consider the following benefits offered by many of the permanent life insurance products available on the market today:

• Tax-free death benefit, cash growth, income, and long-term care benefits
• Market like returns with no downside market risk and flexible funding
• No required minimum distributions or penalties for pre 59 1/2 withdrawals
• No phase-outs for high income earners
• Potential to earn premium discounts and rewards through healthy lifestyle activities

To learn more about how clients can take advantage of all the benefits of permanent life insurance, please contact your Life Sales Rep today.

We are ready for the challenge…

Bring us your difficult cases and let us help you turn them into policies for your clients and commissions for you.

Case Study:

• Female, age 68, non-smoker
• Seeking $1 mil of UL
• Heart attack with two vessel disease and coronary bypass surgery performed 3.5 years ago
• Our offer:  Standard!

Our experience and expertise make a difference – we’ll be your advocate.

Contact our Underwriting Team today.

While it’s a common belief that designing affordable Long-Term Care (LTC) coverage may prove difficult, if not impossible, there are ways to ensure manageable costs.

An LTC insurance policy is only as expensive as you make it.

Flexibility in plan design and product features enables this coverage to be available to meet most budgets.  When putting a plan in place for your clients, keep these cost reducing tips in mind to prevent sticker shock:

Suggest An Asymmetrical Case Design

You may have some clients who want LTC coverage for themselves, but not for their spouse due to cost.  While two fully loaded policies may prove costly, coupling a “token” benefit policy for one spouse can save a significant amount on their premium.

What can they expect to save?

• One of our strategic carrier providers offers a 40% discount for a married couple applying together (both approved) versus no discount for a married person applying alone.
• Other carriers will offer a 20-30% discount for a married couple applying together (both approved).

Take Advantage Of Age And Health

The earlier your clients start thinking about long-term care, the more options they’ll have to consider, and the more affordable those options will be.  The ideal age to start the planning process is between 45 and 60.

Here are two big reasons why:

• The younger the clients are, the lower their annual premium will be versus a comparable policy purchased at an older age.
• The younger the clients are when they apply for coverage, the better chance they’ll qualify for a preferred health discount.  The older they are, the more likely the application for coverage could be denied.

Adjusting To Fit A Budget

Regardless of a client’s age, they likely have a variety of other competing financial priorities on their mind.  LTC insurance coverage doesn’t have to be an all-or-nothing decision.

The most important thing is to make sure to put some level of protection in place, versus ignoring the risk altogether.  Having a pool of money in place enables clients to hedge against the risk of needing care someday.

We’re here to help you design a plan that is both affordable and the best solution for each of your clients’ needs – contact your LTC Specialist today.

To boost your Individual Disability Insurance (IDI) success, try these 5 tips to emphasize how IDI can provide much-needed income protection for your clients.

Focus on the Need, Not the Solution

Your clients likely don’t know why they need IDI and what it will do for them.  Start with the basics – it provides income in the very real chance of a disabling injury or illness – and save the policy details for later.

Tell Stories to Make It Real

Most clients don’t believe disabilities will happen to them.  They do believe they could get sick or hurt.  Bring the risk to life with real life examples, such as being diagnosed with cancer or experiencing a back injury that prevents them from working and earning income.

Compare IDI with More Familiar Insurance Offerings

Clients understand the need for Auto or Homeowners Insurance to protect them.  Explain that if they don’t have IDI to protect their ability to earn and income, they could lose their homes, cars, and lifestyle when they are unable to work.

Stick to the Facts

Illnesses like Cancer, Heart Attack, or Diabetes cause the majority of long-term disabilities, encourage clients to secure the most fundamental aspect of a financial plan – income.

Position IDI as the foundation of their Financial Plan

Financial planning is pointless if your clients lose the ability to earn an income to fund their plan.  IDI can help ensure access to income if they unexpectedly are unable to work due to an injury or illness.

When selling IDI, clients may shy away from conversations about disability, but will understand and engage in conversations about loss of income.  Helping clients make the connection between income protection and IDI could go a long way toward growing your business.

Contact your Disability Specialist to learn more about how to position IDI as much needed income protection.

The business world abounds with stories of the entrepreneurs who managed success building an undercapitalized venture largely because they made little or nothing in the early years, choosing rather to channel revenues back into the growth of the business.

But there are often unsung heroes in these stories of delayed gratification: those talented and enterprising key employees who, captured by the vision and its opportunities, also sacrificed, giving up other more “sensible” opportunities, committing to onerous work schedules, and settling for less salary during their “salad days” so they might share in the bounty down the road.

The difference is that they have no ownership interest; and therein lies the sales opportunity.

Business owners with a conscience will be sure to reward such sacrifice among loyal employees when company fortunes turn

Unfortunately there are some things over which the they have no control, like their unexpected premature death, or the level of obligation that successor owners might feel for those employees who played a role in getting the company to the dance.

There is an easy and economical way business owners can protect loyal employees, and the concept should be a club in the bag of every agent working the small to mid-sized business market, or who wants to be a player there.

Contact us to discusses how you can increase business sales using the concept of “loyal employee insurance.”