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What’s good for the goose is good for the gander; or so we are told.  But adages aren’t always truisms, so unfortunately the conventional wisdom behind them must be applied categorically and with ginger – especially when building financial justification for a case.  The coverage guideline a carrier uses for one insurance need may not be applicable to another.

When buying insurance, a thoughtful purchaser and advisor always struggle with whether or not sufficient coverage now will do the job down the road – especially where there is a reasonable anticipation of increasing need.  A good example is insuring against future estate tax liabilities.

Most successful clients know that they are going to be worth considerably more later

So they would rather go ahead and over-insure against the possibility of a higher tax bill, rather than risk less favorable medical underwriting if they were to wait and try to purchase more at an older age.

Most carriers will accommodate this concern by allowing clients to index their estimated taxable estate (usually an amount resembling their net worth) for inflation.  A common formula allows application of a reasonable rate of interest (currently 3-4% unless compelling circumstances justify more) for a period equivalent to 75% of the insured’s life expectancy not to exceed 15 years.

The parameters differ from company to company, so the issue of indexing can influence the choice of carrier.

Future increase in asset value is also important when buying coverage to fund buy-sell arrangements

Co-owners set a current purchase price knowing that the business value will increase as the enterprise prospers.  Soooo . . . one would think that the estate tax indexing guideline should apply here as well.  But if you went to an underwriter back in the 16th century and argued, “Deeply drinketh the goose as does the gander” (that’s how they said it back then), he or she would tell you that it ain’t necessarily so.

Carriers will not allow anticipated increases in business value as financial justification for more coverage.  Perhaps the concern is rooted in the fact that someone other than heirs could benefit if the insured’s goose is cooked at too early an age.  Advisors should suggest that otherwise unneeded key person coverage may be a justifiable source for the additional insurance sought.

Indexing, as well as many other issues related to financial underwriting, can create fewer problems when addressed early in the planning process.

Call us and talk about situations you have that may require some foresight when insurance is needed for estate or business situations.

Speaking of “honkers” – have you ever noticed that when a gaggle flies over in V-formation one side is always longer than the other.  There is a good practical reason for this.  It’s because there are more geese on that side.

In today’s economy, some of your wealthier clients may be hesitant to purchase Survivorship Life Insurance coverage due to uncertainty, either in the market, estate taxes or their family’s circumstances.  There is another way to cover their insurance need without the finality of a Survivorship plan or the cost.

We have contracts with carriers who offer the ability to convert Individual Term Insurance policies into a Survivorship plan during the designated conversion period.

Your clients receive immediate insurance protection while locking in their underwriting class.  This approach requires less of a commitment coming out of your client’s checkbook while satisfying the total insurance need.

The policies can be owned individually or by an Irrevocable Life Insurance Trust (ILIT) and down the road they will have the ability to convert into a SUL plan at attained age if the uncertainty regarding estate taxes and the current market condition erodes.

Items to keep in mind when considering using an ILIT to purchase Term coverage

First, if you use a trust, the individual who is not covered by the Term policy will need to provide evidence of insurability when the policy is converted to a SUL plan.  Second, you could have the trust purchase half of the total insurance need on each spouse.

Using this method, the individuals will be able to acquire the total insurance need without showing proof of insurability at the time of the policy change.

If you have clients who are hesitant to address their estate planning needs and are taking a “wait and see” approach, you may want to introduce this strategy.

Our Life Sales & Marketing Associates can show you which carriers Term policies can participate in this concept and prepare quotes showing the most affordable options.

Have you ever had a case resistant to the end zone, defeated by a carrier’s strong defense?

On the field of impairment risk underwriting and in a contest of carrier vs. carrier, the final scoreboard can be unpredictable.

Let’s review the highlight reel of a recent case to get to a carrier winning play:

A 58 year old male seeking $1 million of term coverage, Non-Smoker, 5’11”  230 lbs., takes medication for cholesterol and blood pressure. Was diagnosed with Hepatitis C in his late teens due to a contaminated blood transfusion. Liver biopsies show stage 2 fibrosis with no evidence of cirrhosis. He had curative treatment in early 2015 with Harvoni and post-treatment testing showed sustained virologic response. Current liver function testing is normal.

What does the scorecard look like?

Carrier #1 – A giant loss as they declined to offer.

Carrier #2 – Their tentative Table E NT offer fell short of a first down.

Carrier #3 – Despite a healthy crediting program in their playbook, Table B NT was their best offer.

Carrier #4 – Touchdown with Standard NT!

When you’re at the line of scrimmage, making the right call is essential to moving the ball down the field and into the end zone.

Our Underwriting Team, made up of experts and all-star level talent, is here to help you scout the carriers, even the playing field – and win cases.

Multi-life LTCI continues to be one of the leading sales opportunities in the long-term care insurance marketplace today.  Usually the hardest part of making a sale is finding the prospect, however, a multi-life prospect might be as simple as opening your client files.

Chances are, you already have clients who could be excellent contacts to expand your LTCI worksite business.

Look for existing clients who meet one or more of the following hidden multi-life triggers:

Owns a business or holds a professional occupation such as an attorney, physician, CPA or consultant
Holds a high level position or has influence in the executive decision making process
Runs a successful business that’s looking to offer more benefits to its employees
Could benefit from the tax incentives of purchasing LTCI with company dollars
Owns a business with employees who could benefit from discounts and possible underwriting concessions

Keep in mind that your best prospects may be organizations that are willing to pay some or all of the premiums for five or more policies.

Gaining multiple LTCI sales from a single contact benefits you, but what about your clients?

Not only are there a variety of carve-out benefits to choose from; there are additional benefits they should be made aware of:

Generally not subject to ERISA
Employer paid premiums are often deductible as an ordinary business expense
May qualify for reduced underwriting and discounts
Unisex pricing

To learn more about the multi-life sales opportunity, please contact your LTCI Sales Rep today.

We are excited to bring three new solutions to your marketplace and the opportunities they present to help you grow your business.

Key Person Replacement Insurance, the Business Loan Protection rider and the Supplemental Health Benefit rider are only offered by a few carriers, which is why we are the place to go for Individual Disability Insurance (DI).

Key Person Replacement (KPR) Insurance:

This policy is an efficient way to provide business clients with the funds necessary to handle the loss of a key employee due to a total disability.  Benefits can be used at the discretion of the employer, but common uses include:

Recruitment and training costs
Temporary staff needs
Indemnifies the company for lost revenue
Approved in 45 states

Business Loan Protection (BLP) rider:

In the event of a total disability, this rider reimburses the insured business owner for the covered business-related loan obligation.  The rider is available on the HH 702 Overhead Expense (OE) Insurance policy.  Examples of loans that can be covered under this rider include:

The purchase of a practice, existing business, equipment, building and/or land
The expansion of the business or practice
Facility renovations and improvements
And increase in working capital or build up of inventory
Approved in 46 states

Supplemental Health Benefit (SHB) rider:

This no-cost rider helps protect clients in the event of serious illness.  It provides a one-time lump sum benefit equal to six times an individual DI policy’s Maximum Monthly Disability Benefit and Social Insurance Substitute Benefit if the insured is disabled under the terms of the policy and has coronary artery by-pass graft surgery, cancer or a stroke.

Please contact your Disability Income Marketing Manager for details and availability in your state.

*Not available in all states.

When discussing and designing executive bonus plans, too much time is lost talking about and describing “single bonus” and “double bonus” methods, and too many cases may be lost because they haven’t been discussed at all.

Just a quick study of vanilla executive bonus:

The employer, (ER) agrees to pay the cost of a selected employee’s, (EE’s) life insurance plan (or any other asset for that matter – but that’s another topic).  The ER gets to deduct the amount paid to the carrier and then reports it on the EE’s W-2.  Boom!  At the end of the year the EE realizes an increase in his or her tax bill for what has been, in effect, a non-cash benefit.

Even with proper forewarning, the effect under the “single bonus” method can result in the plan losing its luster in the eyes of the participant when tax time rolls around.

So, then you explain that the ER can avoid this delayed sticker shock by “grossing up” the bonus so that the  amount committed to the plan each year equals the anticipated cost of coverage, and the tax that will be due on the total “double bonus.” But if the double bonus method is explained to the ER in response to this concern, it can leave him or her feeling that he or she must commit more than anticipated in order for the plan to keep its sizzle.

The psychologically sound sales solution:

Don’t mention double or single bonus at all.  Once you have determined that an ER wants to assist an EE with the cost of insurance, focus on the amount they are willing to commit.  Then, back into the coverage that can be purchased with what would be the after-tax portion.  Once the breakdown is established and the plan is in place, it is easy for the ER to send the premium amount to the carrier and withhold the remainder.

The ER is still within the original budget, and the benefit is presented to the EE with the assurance that there will be no out-of-pocket tax due at the end of the year as a result of the coverage.  The transaction is not a non-recognizable event to the EE, but when explained and implemented correctly, it will have that sensation on April 15.

Don’t forget the participation possibilities:

If the after-tax amount of the bonus is less than what the participant to the plan might need to achieve an overall risk management goal, emphasize that the policy belongs to the EE and it can be designed so that it provides the total coverage needed with the commitment of additional personal premium payments, either through payroll deduction, if the ER agrees, or by direct payment.

A properly designed executive bonus plan doesn’t solve every non-qualified benefit need, but almost.  Call for assistance on any case design work you have.

Retirement planning has become the first priority for many individuals.  Social Security and other retirement plans may not be sufficient for the clients’ needs.  Though a client may be funding a 401(k) and IRA, they still might worry that they do not have enough savings opportunities, or that they may have a potential retirement shortfall.

One of the most overlooked savings tools for retirement is life insurance.

The cash value of a life insurance policy grows on a tax-deferred basis and may provide your client with a source of additional retirement income.

Address potential planning opportunities in your clients’ retirement plans

We can generate a detailed report unique to each client on the potential income gap between their dream income, and what they are actually going to receive in retirement.

A member of our team would use this information to conduct a thorough retirement check-up, and help you show your clients how life insurance can positively affect retirement years.

Please contact us today – we look forward to the opportunity to help you complete a retirement check-up for each of your clients.

Let’s talk about Diabetes.  This is a chronic condition associated with high levels of glucose (sugar) in the blood.  Insulin hormone produced in the pancreas helps to turn glucose from the food we eat into energy.  When the body doesn’t produce enough insulin or doesn’t effectively use the insulin produced, it increases the amount of sugar in the blood and can lead to diabetes.

Types of diabetes:

Type 2:  Occurs when the body is resistant to insulin and cannot effectively use the insulin it produces.  This is the most common form of diabetes.
Type 1:  Occurs when the body produces little to no insulin.  This is an autoimmune type of diabetes and generally diagnosed early in life.  Latent diabetes in adults is a slow-progressing form of autoimmune diabetes.
Pre-Diabetes:  Also referred to as impaired fasting glucose and impaired glucose tolerance, this occurs when glucose levels are higher than normal but still below the level for a diabetes diagnosis.
Gestational Diabetes:  Occurs during pregnancy and generally resolves after delivery.  Women with gestational diabetes have an increased chance of developing Type 2 diabetes later in life.

A1c blood testing (average blood sugar) is key in determining severity when diagnosed as well as ongoing level of diabetic control.

Complications from diabetes can include neuropathy (nerve damage), kidney disease, retinopathy (vision problems caused by damage to the retina), stroke and cardiovascular disease.

Now let’s talk about some potential underwriting outcomes for Life coverage

Type 2 diabetes may qualify at a Standard rate class with good diabetic control and no complications.
Type 1 diabetes could be as good as Table 2 for over age 50 in a best case scenario. Higher table ratings would apply for ages 50 and under depending on diabetic control and any complications.
Pre-diabetes and gestational diabetes may qualify at Standard Plus.

Contact our Underwriting Team for help in pre-screening your client living with diabetes.

Tax season is in full swing – people across the country are in the midst of preparing and filing their returns.

But did you know it’s also an opportune time to talk to your clients about the vital importance of Long-Term Care Insurance?

There are numerous tax-related benefits that come with LTCi.

For example, LTC Insurance premiums may be tax deductible.  Clients may be eligible to receive deductions or credits on their state tax returns for paid LTC Insurance premiums.

Plus, tax refunds are a great way to pay into LTC Insurance premium payments.  Doing so on an annual basis can make paying premiums a non-event.

LTC Insurance is often the missing piece in many financial plans – and tax preparation provides the opportunity for your clients to review their financial plans and identify any gaps in their coverage.

For more information on the potential tax benefits of LTC Insurance or for additional information contact your LTC Sales Rep.

It’s common for advisors to jump to the solution before making sure their clients comprehend what is at stake should they get sick or hurt and not be able to work and provide an income.

The first step, and the most important, is conveying the necessity for income protection to your clients.

Start by finding out what’s paramount to them.  The things your clients value the most require the most protection: Family, Home, Financial Plans, Secure Futures – help clients identify what they can lose should something happen to their ability to earn an income, and acknowledge that it’s a problem needing attention.

Financial Security: If the paychecks stop, how will they pay their monthly bills?

Few middle income families have enough savings to make ends meet if they should lose their income for more than a few weeks.  When the paychecks cease, monthly bills will begin to deplete savings – setting back plans or priorities, perhaps even for years.  For these clients, the definition of income protection is about knowing they can meet their financial obligations and protect their future plans.

Supporting the Family: What changes will they face?

On top of losing a paycheck, a disabling illness or injury can mean changes for the whole family.  Plans are put on hold, routines are changed, family members must pitch in more – and the calendar fills with doctor’s appointments, which leads to more medical bills, and the urgent question becomes, “When will things get back to normal?”  It’s important for them to know there’s a way they can still support their families and keep life as normal as possible if they become unable to work.

Focus on Recovery: How will they recover if the stress of finances is haunting them?

The last thing someone needs when they’ve experienced a disabling illness or injury is the stress of worrying about bills and other financial obligations while they recover.  It’s difficult enough to be facing an uncertain future without the constant worry of financial set-backs – it’s important to know they’ll have a plan in place and monthly Disability Insurance benefits which will help keep things on track, so they can focus on getting well.

Sales Tip: Be sure to thoroughly cover the need before jumping to the solution.

Consumers must understand the consequences of losing the ability to make an income if they get sick or hurt.  To better identify possible challenges for your clients and create a personal profile go to: www.whatsmyeiq.org.

Contact your Disability Income Sales Rep for guidance – we’ll help you identify the best solution for each of your clients’ needs.