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Every client is different.  Every client’s needs, goals, family situation, budget, risk tolerance, health, and protection concerns are unique.  What motivates your clients?  And why does it matter?

Two big reasons why you want to learn what truly matters to your clients are:  1) You can better design solutions to meet their needs, and  2) You can use this information to motivate your clients to implement your recommendations.

When you know which questions to ask, and learn detail of what your clients would like to accomplish, you start to get a clear picture of what matters most.

You must be willing to ask the discovery questions and be patient with the clients’ responses.

A few of the classic, high-level questions are:

• What do you want your retirement to look like?
• What kind of legacy do you want to leave?
• How do you plan on taking care of your children if something happens to you?

Or, you can try a question or two that might normally be outside your comfort zone, such as:

• What keeps you up at night?
• What are you most passionate about?
• What is important to you about life?

You might be surprised what you learn by asking questions you’ve never asked before.

Contact your Life Sales Representative today to learn more about the tools and resources we have available for you.

Nothing makes an underwriter happier than details to health histories.

When a health history (“I’ve got a guy” scenario) is shared with me, I look for the basics of the Who/What/Where/When and Why.

These details help frame the health history and add context.

The standard set of questions include:

• What is the nature of illness / health issue or underlying cause? For example:
  • For cancer, type of cancer, area affected, Stage and Grade, PSA readings (if applicable), any recurrence or cancer spread
  • For Diabetes, most recent A1c reading, Type 1 or Type 2,
• Date diagnosed?
• Diagnosed as Mild, Moderate or Severe?
• How is the health issue treated?
• Are symptoms well controlled?
• Any complications?
• Fully recovered?
• Date of last follow-up with a physician and the outcome
• Present Condition

Also helpful:

• Height and Weight
• Any use of tobacco products (cigarettes, cigar, tobacco chew, e-cigs)
• Any family history such as diabetes or cancer

Every additional detail gleaned or morsel of information provided, builds the story of each particular individual – and allows the underwriter to provide a firmer response with quicker turnaround time, versus working with gaps in information in what could have been a well written story.

Presenting each client’s history to the carriers in the best possible light will allow us to provide you with solid recommendations, the best carrier options, products and plan for a successful outcome.

Our Underwriting Team is here to provide guidance and direction – the full story of each client’s health history has a shot at a happy ending.

Who will need it and for how long, how much it will cost, the state of the long-term care insurance marketplace, and the toll on caregivers.

If there’s a single unsolved problem in the retirement plans for many middle and upper-middle-income adults, it’s what to do about long-term care costs later in life.

Very high-income, high-net-worth people can plan to self-fund long-term care costs, though I’d advise them to do the math on long-term care cost inflation before getting too comfy with the idea that they’ll have enough to do so.  Meanwhile, people without significant financial assets will need to rely on Medicaid-provided long-term care.  That’s most people: Medicaid and other government programs cover the majority of the long-term care costs in the U.S.

Sandwiched in the middle are people with some, even significant, financial assets–just not necessarily enough to comfortably fund a $300,000 (or more) long-term care outlay at the end of their lives.  For them, the choices are stark and rather unappealing.  They could purchase traditional long-term care insurance and risk premium hikes.

Alternatively, they could purchase one of the increasingly popular hybrid life/long-term care products and face an opportunity cost, as discussed here.  Or they could forego insurance altogether, planning to self-fund care or use nonportfolio assets, such as a home sale, to cover any long-term care costs.

The best way to make smart decisions is to go into the process armed with the facts.  How likely are you to need long-term care and for how long?  What does long-term care cost, and what does it cost to insure against it?

Click here to view the 75 Must-Know Statistics About Long-Term Care

Originally published August 20, 2018, on Morningstar

As you know, no two clients are the same.  They have unique financial situations, diverse needs and different occupations.

Luckily, one of our strategic carriers offers a comprehensive DI portfolio that offers a fit for every one of your client’s individual needs.

This product portfolio includes Accident Only, Short-Term Disability (accident/sickness), Long-Term Disability (accident/sickness) and Business Operating Expense.

In addition, there are numerous optional riders you can add to tailor an income protection plan to meet the needs of your clients.

Additional riders include:

• Critical Illness Benefit
• Hospital Confinement Benefit
• Return of Premium Rider
• Extended Own Occupation
• Future Insurability Option
• Extended Proportionate Disability Benefits

For more information about developing a plan tailored to your client’s needs, contact your Disability Income Insurance Specialist today.

When the fat lady sings… As they say, “It’s not over until then.”

There is a comedian who likes to inform his audience that it is his goal to live forever.  Looking out into the crowd he adds, “So far, so good!”  But the fact is that death is the one contingency everyone can be pretty sure will occur at some point.

There is a tendency in the planning process to focus on the matters of final arrangements, like wills and life insurance, and not give proper attention to the possibility of incapacity prior to death.

Different Types of Incapacity

The inability to handle affairs may be caused by something other than mental incompetency.  Conducting business or carrying out activities may be impractical because of the onset of temporary or permanent physical infirmities, or geographic absence due to travel or distant residence.

Give thought to delegation of authority in circumstances other than those involving mental incapacity.

Financial Concerns

The document for delegating authority in financial matters is a power-of-attorney.  It can be as narrow or as broad as needed.  It can in force until revoked, or it can take effect under particular circumstances and can remain valid even into a period mental incompetency.

Revocable living trusts, often used to keep assets out of the probate court, can also give authority over property in the trust to a co-trustee or contingent trustee.

Beware of joint ownership as a solution!  The responsibilities of joint owners is undefined and transactions with certain assets, such as real estate, may not be possible without agreement of all owners.  Also, creation of joint ownership may create gifting concerns.

Medical Concerns

Planning documentation will go under various forms and names in different states (e.g. health-care directives, living wills, health proxies, medical power-of-attorney), but if properly drafted should address three items:

• Direct who will make health care decisions when needed for the principal.
• Indicate who will make any life-sustaining or life-ending decisions necessary.
• Grant HIPAA authorization for decision-makers to receive all medical information necessary without the consent of the principal.

The process should also include proper risk management planning giving consideration to the advisability and feasibility of long-term care and disability insurance options available.

Whom Do You Trust?

All the documentation is fine, but it is only as good as the qualifications and reliability of the attorney-in-fact, trustee, or other fiduciary chosen to carry out the terms.

Good starting points for candidates include:

• Their geographic location – Will they be on-site when needed?
• The intensity of their lifestyle – Will they have time to attend to their responsibilities?
• Experience – Do they have the background and skills to handle the affairs they will oversee?

All this, of course, in addition to whether they have proven trustworthy and dependable in the past.

The importance point to impress upon a client regarding incompetency planning is that if they don’t make a plan the State will make one for them.  Through tedious, drawn-out and expensive guardianship or conservatorship hearings a court of law will set a course that may or may not achieve what the client might have desired, administered by people the client may or may not have preferred.

Call with basic questions and concerns that each client should consider taking to their legal advisors, as well as for information on the long-term care and disability insurance options that can assure that proper funding is available to carry out the intentions of your clients in the unfortunate event of incompetency.

The traditional 162 Executive Bonus Plan is one of the simplest and most popular executive benefits offered in the small business market. The bonus is tax deductible and has few regulations and reporting requirements.  This makes the Executive Bonus Plan extremely attractive to many business owners.

The bonus needs to be considered reasonable compensation in order for it to be deductible, but other than that, the business owner has complete flexibility.

Who is covered and the level of participation is completely discretionary, plus the commitment to the contribution can also be flexible.

Even with all of the positive attributes of Executive Bonus Plans, some employers continue to have concerns.  Many employers are concerned about not having control of the asset (the policy), which is owned by the employee.  The employer may feel that unlike other executive benefit plans, there is nothing to tie the employee to the company, no “golden handcuffs.”

Though employees have an incentive to stay with the company in order to continue receiving premium bonuses, some employers may feel that the bonuses paid are “money out the door.”  Further, they may fear that the employee may handle ownership of the policy irresponsibly.

A potential solution for the employer who has these concerns is the restricted executive bonus plan

The Restricted Executive Bonus arrangement is designed to give the employer some degree of control over the employee’s access to the policy during employment.

The restrictive bonus may be approached in many ways; however the most popular method is through a restrictive endorsement to the policy.  Using the restrictive endorsement, the employee agrees to sign an endorsement form, which becomes part of the policy.  The endorsement states that the employee will not exercise certain ownership rights in the policy; usually for a period of years or until the employee reaches a certain age.

It is extremely important that the endorsement signed by the employee not grant any ownership rights to the employer.  The only way the premium/bonus can be deductible to the employer is if there are no ownership rights with the employer.  If the business had any ownership rights, the business’ deduction of the premiums would be jeopardized.

The restrictive bonus should be used sparingly

And only in cases where the employer has expressed significant concern over the lack of control perceived under a standard executive bonus arrangement.  In addition, the employee participant may feel as though the benefit is less compelling since the bonus is already taxable (causing an out of pocket expense in a single bonus situation) and the benefits are not immediately accessible.

In some cases, a restricted plan may even have the opposite effect from the intended goal of tying the employee closer to the company.  It is more practical to use the double bonus, or gross up bonus, when the restrictive endorsement is used. In this situation, the cost is zero and the plan should continue to be compelling to the employee.

The bottom line is that executive bonus is a great way for employers to reward and retain key employees.  The restrictive bonus can be used sparingly when the objection of “money going out the door” arises.  Either way, executive bonus is a great sales concept for the small business market and can generate significant commissionable sales to the producer.

Contact your Life Sales Rep for more information.

Carriers use crediting criteria to improve your clients’ ratings.  The following case study shows how the identification and application of underwriting credits can significantly reduce premiums.

Case Study:

• Male, age 35, NS
• Seeking $2 mil of term

Scenario:

• No tobacco use
• Build is 5’8”, 204 lbs
• Blood pressure 130/85
• Cholesterol 273 with cholesterol/HDL ratio of 5.5
• Father diagnosed with prostate cancer at age 56, but still living at age 67

Underwriting Rating: Using traditional criteria, this proposed insured would qualify for Standard Plus with a $2500 annual premium.

Crediting Criteria: Crediting Criteria added 1 inch to the proposed insured’s height, making him 5’9”, 208 lbs.  He was then considered Preferred for build.

Final Decision: Case was moved to one class higher and issued Preferred – Annual premium = $1753 and saving nearly 30%.

On each case we see, we work hard to identify any underwriting credits your client may qualify for.  Contact our Underwriting Department today.

Learning how to adjust to the changing market is crucial to the continued success of your Long-Term Care (LTC) Insurance business.

Today’s market reflects an expanding, diverse clientele, so being able to respond to their unique needs and budget constraints is critical.  The first step is to understand their concerns around buying coverage, including potential objections about the cost of a policy.

Adapting your approach to the new market will not only demonstrate that you are responding to changing trends, but will ultimately help to increase your LTC Insurance business.

3 important concepts to consider:

Who Should I Target?

The “younger” segment of the LTC Insurance market includes 45-55 year olds.  And while they may understand the need for LTC Insurance, many have competing financial responsibilities, and feel they don’t have the disposable income to spend on a policy.  Your challenge is to create a sense of urgency about the importance of applying when they are younger and healthy, and show them there are affordable ways to access LTC Insurance coverage.

How Can I Help My Clients?

Your clients may not know that they have a surprising amount of flexibility when designing LTC Insurance coverage.  Buying a policy is not an all-or-nothing proposition.  If you start with a policy design that addresses 100% of your clients’ anticipated future care needs, you can offer alternate designs to help lower the premium, if necessary.

For example, suggest shortening the Benefit Period to 3-5 years to save money, while providing ample coverage for most care needs.  Leaving off compound inflation protection can also make a big impact, potentially cutting the premium in half.  With this strategy, consider other alternatives for inflation protection or a higher initial daily benefit to account for future cost of care.

What Can I Do To Succeed?

One of the characteristics of the new market is that the public is more aware of the need to plan ahead for LTC.  They are open to having long-term care planning discussions, and will welcome your guidance.  Take a proactive approach and make it a priority in your practice to initiate LTC planning discussions with your clients by age 50.

By connecting with your clients, emphasizing the value of LTC Insurance protection, and showing that coverage can be adjusted to meet their budget, you will demonstrate that you have their personal needs in mind and are on top of the latest product offerings.  And, that is a recipe for success for years to come.

Contact your LTC Sales & Marketing Associate today for more resources and information.

You know statistics alone don’t sell Disability Income Insurance.  No matter how many scary statistics you quote, some customers can’t fathom why they may need DI.  That’s when having some real life examples your customers can relate to can turn the sale around.

People love stories.  Children beg to hear them.  A campfire wouldn’t be the same without them.

A well-crafted story can evoke an emotional response and paint a picture that leaves a lasting impression.  And that’s what makes stories such powerful sales tools.

Stories are a good way to get people to accept what you are selling.  Telling the right story in the right way can be a powerful form of persuasion.  Making your point with a compelling story can sway opinions and preconceived notions much more effectively than a simple statement.

Why?  Because stories appeal to peoples’ emotions and are more memorable.  Stories provide context.

A Different Approach

But it’s not your only your stories that can work for you.  Your clients may not even realize it but they probably have stories of someone they know who’s been affected by having (or not having) DI.  Listen carefully for indicators that there’s something in their heads and try to draw it out.

In the end, a story your clients can relate to has the potential to make a powerful statement with very little selling on your part.

Click here to visit the LIFE Foundation’s website to read real life stories that can help with your sales.

Two of the top ten reasons that younger women say that they marry older men are, first, they have a better read on those with a more promising future, even if it is shorter; and second, if they sprain their ankle they can use their husband’s cane.

Pretty funny, but not unlike a couple of the underlying reasons it might make sense for a young entrepreneur to associate with an older colleague in a business venture.

The “kid” has the track record of the potential partner to serve as a good indicator how much the codger will bring to the table in the time remaining in his or her active work life. And the older businessperson has picked up things along the way that may come in handy to overcome unexpected hurdles (the cane, just in case you aren’t following the analogy).

But a disparity in age always seems to create a fly in the ointment when it comes time to do some business transition planning.

When insurance ledgers are run in anticipation of insuring for a buy-out in the event of death there is often sticker shock over the difference in cost between coverage for the young ‘un and the old fogie.

Clients expect some spread in cost due to age, but not that much – and it doesn’t help that the older proposed insured’s medical history isn’t as positive as it used to be (after all, you generally don’t use a cane because there has been an improvement in health).

If properly addressed this bump in the road shouldn’t be a problem. Assume a case where the partners will buy each other out with policies they own on each other on which each will pay the premium.

Consider:

• Because the need for coverage is a measurable period of time that is less than life expectancy, term insurance can be used to considerably lower cost up front.  And it is usually eligible for conversion if the policy is needed longer for any reason.
• The higher premium burden of the younger partner can be neutralized by double-bonusing the cost of coverage to both.  This equalizes the expense by creating a zero after-tax outlay and the business is now seen bearing the overall cost of the transition plan.
• After that, focus on the benefits each is to derive from the agreement: either a) the assurance that their heirs will receive a fair price in the form of cash for the business interest, or b) the assurance of funds to buy out a deceased partner and future full ownership of the business.  What each partner derives from the buy-sell is exactly the same, exactly what they want, and exactly what they need.

An uninsurable partner creates different problems, but policy cost due to mere differences in age or insurable health should not be an objection.

Two other reasons in younger women’s top ten are that an older husband will introduce them to a whole previous generation of chick flicks (Thelma and Louise, Steel Magnolias and Breakfast at Tiffany’s), and he can help with homework.

Contact us with any and all questions that come up in buy-sell planning for clients of any age.