Why Permanent Life Insurance?

Many times when we think of the most common reasons why someone might purchase life insurance, we think of some of the major financial risks our clients face if they die before they retire. These common risks include lost income, the ability to pay off a mortgage and the ability to fund a college education for children. Typically because all of these risks prior to retirement are temporary, they are protected with term life insurance. As your client gets closer to retirement these risks are greatly reduced. With term life insurance your clients can typically purchase a large death benefit for pennies on the dollar, and they can choose not to continue coverage after the level term period expires.

So as a life insurance agent or financial advisor, why would I ever recommend purchasing permanent life insurance to my clients? To answer that question you should consider another question first. Why do my clients need life insurance after they retire? There are several risks that clients face after they retire that are not as commonly discussed but can have a major impact on your client’s retirement plans. These include unknowns like the potential of increasing tax rates, stock market volatility, underestimating how much they’ll spend in retirement, lost social security income due to either the death of the spouse or changes to the program and many others that we could spend more time on.

Today I want to highlight a particular risk that can have a devastating impact not only on your client’s financial situation, but on their children’s and grandchildren’s future as well. This is the risk of long term health care expenses that arise as our client’s age. Long term care is more expensive than most think and many will be responsible for covering their expenses. According to a 2017 AARP fact sheet, 52% of people turning 65 will need long term care services in their lifetime. Because these services cost several thousand dollars a month and can last for years, this is a risk that must be addressed.

Life Insurance with living benefits is becoming more common as a way to protect against this risk. The flexibility of these policies make them a very attractive option for those worried about paying for expensive long term care insurance and never using it. These policies come in all shapes and sizes in terms of guarantees, how interest is credited, how to access the benefits, etc. So what should you recommend to your clients? Well we certainly have our favorites here at Financial Brokerage that we’d love to discuss with you, but I’ll share a brief hypothetical example using a product that’s currently on the market to highlight some features available that we favor.

CASE STUDY

• 45 year old male at preferred non-tobacco
• $309.84 per month in premium for 20 years (paid up at age 65)
• $250,000 face amount/ $5,000 per month true LTC benefit
• At age 65
    • Guaranteed option to surrender policy for return of 100% of premiums paid
Or:
• $92,855 of cash value
• No lapse guarantee death benefit of $250,000/ $5,000 per month LTC coverage to age 85
• Cash value expected to grow and death benefit/ LTC coverage projected to run to age 120

With 1 policy you cover part of your client’s pre-retirement death benefit need; you protect against their health care expense need throughout retirement, and they also accumulate cash value in reserve to hedge against other unexpected financial risks in retirement.


— Since 1996 —
 
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17110 Marcy Street • Omaha, NE 68118
www.financial-brokerage.com
 


Underwriting with Andrea #6

Declines got you down?
Underwriting is both an Art and a Science. Here at Financial Brokerage we know that the clients you protect have their own unique histories that often present Underwriting challenges. With so many options available, knowing where to start can be daunting. Let us help you choose the right carrier the first time. Stop Declines before they happen and contact me the next time you’ve “got a guy” that you’re not quite sure where to start with. You might just be surprised at what I’ll find…
Today’s Challenge
Today’s client is one of 5 siblings and the only child born with Achondroplasia. Male, age 51, in good health other than blood pressure controlled with medication. The client has two children of his own, one born with dwarfism and one born of average height. Some of the more common concerns with dwarfism include difficulty breathing during sleep (sleep apnea), pressure on the spinal cord at the base of the skull, progressive severe hunching or swaying of the back with back pain or problems breathing, narrowing of the channel in the lower spine (spinal stenosis) resulting in pressure on the spinal cord and subsequent pain or numbness in the legs, arthritis, etc…

The Resolution
Due to the known risk factors there were unfortunately multiple carriers that were unwilling to even look at this risk and opted to decline without reviewing any portion of the clients medical history. However, as has been proven time and again, shopping this out worked to everyone’s advantage because there were at least 4 carriers that were happy to look at the big picture. Two of our leading carriers indicated that Standard (at best) might be possible. One carrier was a tad more guarded and indicated that this would need to be reviewed by a medical director but they were fairly certain that an offer could be made. I was pleased to see that coverage was at least possible but nothing made me happier than the carrier that indicated Preferred Plus was possible! Of course this tentative offer was subject to an acceptable BMI, no complications from achondroplasia, and the client had to be fully ambulatory without the need for walking aids, but Preferred Plus NT when most other carriers wouldn’t even consider-That’s a big win in my book!

Finally!…An IUL Presentation Clients Can Understand

Accelerate your LIRP sales by using the Ensight visualization software. We’ll show you how to turn confusing ledger lines into a full color, interactive display you can share with your clients. This case study makes it easy for clients to visualize their money at work in a tax free, no market risk environment over their lifetime.

Underwriting with Andrea #5

Declines got you down?
Underwriting is both an Art and a Science. Here at Financial Brokerage we know that the clients you protect have their own unique histories that often present Underwriting challenges. With so many options available, knowing where to start can be daunting. Let us help you choose the right carrier the first time. Stop Declines before they happen and contact me the next time you’ve “got a guy” that you’re not quite sure where to start with. You might just be surprised at what I’ll find…
Today’s Challenge
Male, 20 years old, non-smoker. This applicant was in need of Life Insurance for business purposes but was declined due to a diagnosis of Grand Mal /Tonic Clonic Seizures 10 years ago. For the first 4 years, while in his early teens, he had a variety of seizures, 0-2 per day. In 2011 the client stopped having daily seizures with no explanation and in 2013 he had his last seizure when he started taking Topiramate. The APS has this noted as Generalized Epilepsy. The client sees his Doctor annually and all has been favorable since 2013.

The Resolution
The majority of our carriers were in the table 2-4 range; some went as high as table 6 due to the client’s young age. However, one carrier among the many I reached out to, came in at Standard, and that was without using any type of table shave program! Of course, all of these offers were subject to an APS and full review of Neurology records, but it just goes to show what a difference shopping these cases can make!

Underwriting with Andrea #4

Declines got you down?
Underwriting is both an Art and a Science. Here at Financial Brokerage we know that the clients you protect have their own unique histories that often present Underwriting challenges. With so many options available, knowing where to start can be daunting. Let us help you choose the right carrier the first time. Stop Declines before they happen and contact me the next time you’ve “got a guy” that you’re not quite sure where to start with. You might just be surprised at what I’ll find…
 
Today’s Challenge
Male, 58, non-smoker, Preferred risk in all regards except that he has a previous Opioid addiction. The client is a medical professional and at high risk for relapse due to how readily available these medications can be, therefore, he is currently taking Suboxone as a preventative.

 
The Resolution
I reached out to approximately 20 different carriers with the knowledge that obtaining coverage would not be an easy task. In the past, we’ve seen instant declines for continued Suboxone use regardless of the situation, duration of use, etc. and up until this week, I’ve had no success in finding coverage with any of our carriers. However, after much research, I was able to find one carrier that is now willing to consider under the conditions that the client has been abstaining from any kind of Opioid for at least 3 years and is taking a low dose of Suboxone, only. I was also able to find a second carrier that indicated Table 4 to 6 may be possible depending upon the case history. Never say never, Underwriting guidelines change every day!