The Eight Elements of Extended Care Riders – Element…

Presented by Brian Leising The Eight Elements of Extended Care Riders 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 4 – Tax Code and Benefit Qualification Insurance companies file their extended care riders and provisions under one of two (or both) tax codes, 7702(T) or 101(g). What’s the difference? Only the riders filed under 7702(T) may use the words “long term care” to describe the rider. Since the 7702(T) riders are viewed as tax-qualified LTC polices that have been added to a life insurance contract, the LTC benefit in many cases will exceed the death benefit of the underlying policy. Chronic illness riders (101(g)) may only accelerate up to the actual death benefit amount. The difference of greater concern pertains to benefit qualification. With either tax code, benefit qualification depends upon the client losing physical and/or mental abilities. The insured can qualify for benefits by losing the ability to perform two of six activities of daily living (ADL’s) or severe cognitive impairment (such as Alzheimer’s or dementia). With chronic illness riders (101(g)) an additional requirement must be met: the condition must be deemed to be permanent. An insured may recover, but the expectation they will not triggers the chronic illness (101(g)) benefit. Look for Element 5 – Elimination Period in May.

More Final Expense Commercials

Presented by Jim Linn Have you noticed more and more commercials about Final Expense insurance? In the last 2 months, I have seen more commercials about Final Expense insurance than the last 2-3 years combined. The reasoning is that currently 10,000 people are turning 65 each day and carriers are focusing on their life-changing event.  Financial Brokerage offers Final Expense products in addition to traditional plans. Final Expense products are underwritten on a simplified basis, which entails a pre-screen application to determine eligibility, RX check, MIB check, telephone interview (carrier specific), with no exam required. In most cases, policies are issued within 7-10 business days. However, no two Final Expense products are the same. It is specific to the underlying medical conditions of your client. Your client may not be eligible for one carrier or offered a modified plan, whereas, another carrier may offer your client a first day benefit with no waiting period. For example, a client with COPD would be ineligible or offered a modified product by some carriers, but one carrier will offer them a first day product. It is important to ask your clients their medical history, specifically when they were first diagnosed, are they taking medications currently or have they had a reoccurrence of any previous medical conditions.  Financial Brokerage does have a Final Expense quoting tool on our website for your use, but the tool specifically provides premium amounts, with limited underwriting. I would encourage you to contact your life marketer regarding your Final Expense clients so they can identify the best carrier and plan for your client to provide them the best possible product. Just because a specific carrier shows a premium does not mean they would be eligible. Save your client and yourself time by giving us a call at 800-397-9999.

Banner – Connecticut Disallows Voice Signature

The State of Connecticut Insurance Department, in Bulletin S-16, clarified its requirements for “telephonic applications”.  The ruling affects applications from Connecticut residents. According to Bulletin S-16: The completed application must be delivered for review and signature prior to the delivery of the contract.  Delivery may be electronic and electronic signatures are acceptable. Voice response signatures during data collection by a non-licensed individual are not permitted as a signature on the application. At LGA: Effective immediately, a voice signature option will not be offered with AppAssist applications solicited in Connecticut. The customer will receive the completed application via FedEx with instructions to sign all forms. A return envelope will be included.

New Benefits

Per Gary Peterson A new form of life insurance has hit the market.  Not only can the family benefit through a Death Benefit, but the insured can now receive benefits through Living Benefits, Income Riders and Return of Premium (ROP).  Several carriers offer one or all of these benefits for you to give your clients options and flexibility.  Give us a call at 800-397-9999 to discuss the many ways to assist you in your insurance business.