Annuities

Bonus or No Bonus Annuity

Presented by David Corwin I think I’d take the latter – let me explain why. I’ve been in this ever changing Indexed annuity world for several years now and not unlike any other aspect of the insurance world, it is constantly changing. I’ve worked with hundreds of agents in my career. I work with some agents that only write bonus contracts. I’ve compared two of the best selling products with a particular carrier; one with a bonus and one without. I used the same index strategy and time period and the results were quite alarming. The bonus product that offers a 10% premium bonus netted $151k at the end of 20 years and the product without a bonus was over $215k. Why is this you ask? Well, I will tell you that typically on bonus products the commission rate is higher and thus the cap rates are lower than on a non-bonus product. This can result in much better performance long term.
Long Term Care and Disability Insurance

Not responsible for your parent’s debts? Filial responsibility laws…

Presented by Leonard Berthelsen Many times we have a notion that we know how something should turn out, only to find out that the complete opposite is true. Filial responsibility laws are in place in 30 states in our country today. What is the Filial responsibility law? It basically makes an adult child responsible for the care debts of an ailing parent who cannot afford to pay for their care. We all thought that was what Medicaid was for, right? It is no longer enough for a person to have limited assets in order to qualify for Medicaid but apparently their adult children as well. Take a look at a Pennsylvania case that involved an ailing parent whose son was sued by the nursing home even before Medicaid had made a decision on the applicant’s eligibility. The courts ruled that by the mere fact of having a Filial responsibility law in place, the nursing home didn’t need to wait for a decision from Medicaid and could choose any or all of the adult children to be the responsible party for their parent’s bill. This potential liability should move more of our clients to reconsider long-term care insurance. We have talked as an industry for years that it makes good sense for adult children to have that conversation with their parents about their wishes and finances concerning long-term care issues. I think the urgency is a little stronger now in light of what we are starting to see happen. Long-term care insurance is still the best protection for a parent wanting to maintain choices and flexibility. It now has become even more important for the adult children to have that conversation with their parents and even consider paying the premiums for their parent’s policy. It could save them a tremendous amount of money in the long run.
Disability

DI Made Easier

Presented by Tim Dreher Are you like me when it comes to selling Income Protection?  I love to get out there and meet new people and give them peace of mind by helping them to protect their greatest asset – their ability to earn a paycheck.  But after the client says “yes”, I dread all of the paperwork that comes with the sale.  Is it just me or have applications become as big as phone books recently? Well, fear not fellow agents.  Thanks to several of our DI carriers, we now have a solution to those long, long applications with a streamlined application process called a tele-app.  The tele-app is a shortened version of the regular application with Section B (medical questions, prescriptions, and health history) of the application missing.  The agent completes only parts A and C of the application, which consists of basic demographic information and the signature page.  Once the application is submitted to the carrier, the client receives a simple and brief (normally 15-20 minutes) fact finding phone call by a highly trained and experienced telephone interviewer well versed in underwriting and medical terminology.  If something comes up in the client’s health history during the call that raises a red flag, the experienced interviewer is able to ask the right follow-up questions for clarification, helping to reduce the need for attending physician’s statements, medical records and paramedical exams.  This has been shown to cut the underwriting process by as much as thirty-three percent.  Quicker issue time means you get paid faster. Finally, another great benefit of the tele-app is to avoid having to ask your client about their personal and private health history, which in many situations, can be a little awkward and uncomfortable for both of you. In a nutshell, the tele-app simplifies the sales process for both the agent and the client, resulting in a quicker issue time.  Be sure to give the tele-app a try with your next client. You’ll be glad you did.
Life Insurance

The Eight Elements of Extended Care Riders – Element…

Presented by Brian Leising Finding the right formula for each client Not all extended care riders on life insurance policies are created equally. Do you know the differences? Different combinations will appeal to different clients more than others. Here are eight of the major distinguishing features among insurance companies offering extended care riders. All include some combination of the eight elements. This allows you to find the right formula for each client.
Premium Payments Benefit Qualification Benefit Amount
Pf Payment Frequency Pa Payment Amount
Lg Lapse Guarantee Tc Tax Code Pm Payment Method
Wp Waiver of Premium Ep Elimination Period If Inflation
Element 6 – Payment amount Insurance companies use two primary methods to determine the benefit amount paid to your client. The payment amount will be either based upon a known figure up front, or will be determined at claim. If there is no cost for the extended care rider up front, charges are assessed at the time of claim. In this scenario, the company will set a maximum acceleration amount available to the client. The client may elect to request that entire amount or a lesser amount. The carrier will then base their charges on the client’s life expectancy and current interest rates. For instance, they may determine the client has a life expectancy of five years. They will take the dollar amount requested, calculate the interest they would expect to earn on that money over the next five years, and then subtract that amount from the client’s benefit as their fee. With this type of payout calculation, it is impossible for a client to know exactly how much money they will receive until they actually file a claim. This works well for clients who absolutely will not pay for a feature they believe they will never use as there is no upfront cost for this type of rider. If there is a charge up front for the rider, the benefit will be a known number. Most carriers express the monthly benefit as a percentage of the face amount. 2% is common, but some offer 3%, 4% or the full Federal per diem amount as the monthly benefit. At least one company allows the client to name a specific dollar figure on the application. This method gives the client the ability to know exactly what to expect upon filing claim. Look for Element 7 – Payment Method in July.
Annuities

Keeping up to date

Presented by Jim Linn Whether you are new to the industry or a veteran, there are areas regarding your licensing and contracting that need to be monitored. 1.     Most insurance licenses are valid for 2-3 years depending on the state.  If you cannot locate your printed copy, you can go to your state’s insurance department website and look yourself up or go to www.nipr.com.  2.     CE credits:  Don’t forget to get your CE credits done in advance of your renewal.  Too many times we get calls from agents that need their CE completed by the end of the week or even the next day.  There are several online options to help complete your CE and typically you can find courses or seminars offered to earn them as well.  3.     Anti-Money Laundering (AML):  Depending on the carrier, it is required anywhere from 1-3 years.  Some carriers offer their own specific AML or require their own training program.  In general, most carriers accept AML training completed through LIMRA.  Keep in mind that they no longer offer a printed certificate of completion so you may need to take a screen shot as proof of completion. 4.     E&O Insurance:  renews annually and is required by most carriers.  If we do not have a current E&O certificate on file, it may hinder your contracting process.  5.     Change of Address:  In most states you have 30 days to notify the insurance department of your change in address.  The easiest way to make this update is by going to www.nipr.com.  You can update multiple states at one time if licensed in several states.  By making sure these areas are up to date, you will not only keep your license in good standing, but also help in expediting any carrier contracting requirements.