The 5-Step College Funding Combo Plan

Authored by Brian Leising You may have heard about using life insurance as a component of college planning.  You may even incorporate college planning with your client reviews.  Do you explore all the options available with your clients?  These five ideas can lead to writing not one, but several policies per household.  All designed to maximize the use of life insurance in college planning. Step 1  Register to use the Smart Track Tool Kit college planning system through our website.  The Smart Track Toolkit can help your clients learn how to rearrange their assets to optimize money available for college.  It could also assist them with important test preparation, the confusing admissions process, and even choosing the right school.  Combined with the Leads on Demand system, you can place yourself in front of prospects with a great sense of urgency.  Step 2  One or both parents should purchase a life insurance policy with Foresters.  Policyholders become members of the Foresters fraternal organization.  Children of members are eligible to apply for one of 350 competitive scholarships they offer annually.  These scholarships are worth $2000 per year.  Foresters offers a life policy to fit almost any budget, often without a paramedical exam. Step 3  Establish a cash value or return of premium (ROP) term life insurance policy on a parent.  Both offer death benefit protection if the parent dies prior to the child starting college or a lump sum available to pay tuition when due.  For guaranteed cash, ROP term offers a fixed amount on a specified date.  If they wish to grow their money while still providing safety, several carriers offer traditional fixed and fixed index universal life policies.  Many of these include an early cash value option, which enhances the cash available in the early years of the policy. Step 4  Ask grandparents to rearrange their assets in a more tax-efficient manner.  Many grandparents have IRA’s and qualified plans with benefits larger than they will need for retirement income.  Most individuals take their minimum distributions and simply re-invest them only to pay more taxes on that income.  By taking this money and placing it into a life policy, they shelter the money so the income is not included on their tax return, provides tax free loans from the policy and produces a legacy at death. Step 5  Utilize a fact finder that takes college funding into account.  Both ING and Mutual of Omaha have software tools to help you plan the future costs of a college education.  They offer examples of current tuition rates at major universities and estimate future costs based on education inflation.  You can add this estimate into your client’s total needs analysis.

How Can a Sole Owner Assist a Key Employee…

Authored by Gary Peterson A key employee who plans to purchase the business at a sole owner’s death guarantees personal job security without the risks associated with launching a new business venture. If, however, payment of the life insurance premiums required to fund an insured buy-sell plan imposes a financial hardship on the key employee, it may be to the owner’s advantage to help the key employee with the premium payments. In this way, the owner assures his or her family of receiving the full value of the business at the owner’s death. There are three ways a sole owner can assist a key employee with the premiums required to fund an insured buy-sell plan: Salary Increase The owner could increase the key employee’s compensation to cover at least a portion of the insurance premiums. Personal Loan The owner could make a personal loan to the key employee for at least a portion of the insurance premium. A schedule for the repayment of these loans could then be included in the buy-sell agreement. Split-Dollar Plan The owner could loan the key employee all or part of the insurance premium with the loans secured by a collateral assignment of the insurance policy. Unless, the key employee pays the employer market-rate interest on the loans,  however, the key employee is taxed each year on the difference between market- rate interest and the actual interest paid, if any.

Educate the Public About the Value of Life Insurance

If your clients and prospects were better informed about life insurance, do you think your job of selling would be easier?

I read an interesting article recently about the cost of insurance.  The article describes a survey that asked consumers to estimate the cost of a 20 year, $250,000 level-term life insurance policy for a healthy 30-year old. Their answer was about $400 annually.  The actual cost is half of that – around $190 annually.

Our job is, in part, one of educating and informing the people we work with about the value of and the remarkable affordability of today’s life insurance.  If the public were better informed about insurance it would make our jobs easier.  If we can demonstrate the real cost of life insurance and help them understand why it is important to have coverage for their families, the natural result will be more prospects and better sales.

So if the population thinks life insurance is expensive or they don’t really need it, it is our job to educate them.  Think about how you can expand your efforts to help educate your clients and your community about the importance of life insurance. An active approach to  this can lead to more business for you.

John Schraut, Life Sales Manager

Make Life Insurance Profitable (even when it’s not your…

We work frequently with P&C agencies to show them how easy it can be to sell life insurance.  Remember, existing P&C clients (works well for banks, CPAs, etc.) already trust you or they wouldn’t be an existing P&C client!  And, when they trust you, it makes the life insurance sale a natural part of your conversation with them.  In fact, if you’re not already having those discussions, you may actually be doing a disservice to your clients.  If it’s important to insure their home, their car and other personal belongings, how can insuring their life be overlooked? So, now that I’ve said it’s “easy”, how do we define that??  1) You’ve already done the prospecting because they’re already your client! 2) Financial Brokerage can create and brand life insurance-focused web pages for you to embed in your current web site 3) FB can also provide to you professional marketing materials to get your clients thinking about life insurance 4) We offer full-featured term quote engines, needs analysis tools and budget calculators that allow clients visiting your site to perform their own research and 5) We offer a robust e-mail marketing tool and provide client-facing e-mail newsletters  for you…all you have to do is provide the client e-mail addresses and send ’em out! and 6) And this is a big one…we have all the electronic tools that make it easy to write the app, which I’ve “blogged” about in the past.  No paper!!  In fact, you may not even need to ask all the awkward health questions (you know the type, “now what was the size of that boil again??”) So, you’ve already got the clients and we provide everything you need to market life insurance and complete the sale in, say, ten minutes.  What’s not to like about additional revenue?!?!  And, if you’re not writing the life insurance, someone else is, and maybe it’s another P&C agency…and when they do, they slowly start to become “creepers”…creeping into a relationship with your client.  That doesn’t sound so good, does it? Contact us at 800-397-99999 and ask for Kevin Kusleika, Senior VP and CTO or Sarah Stewart, COO to find out how we can help you help yourself!