Why we do what we do
Presented David Corwin Anyone who has been in the life insurance business for any length of time will tell you that if there is a single reason why they would look for a new profession, it would most likely be the rejection they receive in an effort to sell life insurance. When we let our client sell us on the reasons why they don’t need coverage, we give in. That is the primary reason I feel that insurance agents fail, they give up way too easily. We must persist, we must be stronger! I am constantly reminded of how crucial it is to have the proper amount of insurance to protect one’s family. It March of 1998 I was still considered a rookie. I was in an appointment that was a little difficult. I had dealings with this family in the past as they were current clients; with only an auto insurance policy. Really nice family; Rick, Debbie and there 14 year old son Rick Jr., they always liked to hear what I had to say. They were the kind of family that after your appointment is made you realize why we do this day after day. Throughout the interview and presentation of the information that I gathered, it became glaringly obvious that I needed to make a strong case as to why they both needed life insurance. Rick would always try to get me off the subject, but Debbie seemed to be genuinely interested. There were many objections I had to overcome to gain their confidence and trust. They couldn’t afford much, so I ended up writing a term insurance policy on both of them. Rick also had a small group policy which I included in the analysis that I ran so they only took out enough insurance to cover the mortgage. I wrote the policy on March 18th, 1998, and I remember thinking on the way home, I just touched another family in a way I hope they never realize. Unfortunately, that realization came all too soon. Rick worked nights at a bakery and would get off of work around 4 a.m. On March 27th, just a week and a half after writing the policy, Rick was driving home from work around 4:30 a.m. and fell asleep at the wheel. He was killed when his pickup went off the road and collided with a light pole. Around 7:00 a.m., I received a frantic phone call from Debbie who didn’t know what to do. I couldn’t believe that less than 2 weeks earlier I had written a life insurance policy to prepare for just this kind of an event. I told her that I would call in the claim and we would talk later. After the insurance company did their investigating and found no wrong doing, I was able to deliver a check to her. Rick also had the group policy, which Debbie had no idea how to submit a claim on. After making a simple phone call to his human resource department, I found that he had an accidental death policy through work that enabled Debbie to receive a portion of his income. I then assisted her with putting away part of the money and using a portion of it to pay down the mortgage to a payment amount she could handle on her income alone. She had never dealt with this kind of money before, so she was really counting on me to help. As with most people, she went a little overboard with some of the money. I can’t say that I could blame her for that, and if it helps with the grieving process, that’s all the better. With some of the money, Ricky Jr. was able to get a car on his 16th birthday. I must say that was a rough year for her family, not only with dealing with the death of her husband, but then Ricky had an accident that summer. He was driving on a country road, lost control of his new car and drove off the road. She called me at my office and I was shocked. Fortunately, he just suffered a bump on the head and a sprained ankle. I visited him in the hospital to help comfort the family and felt great to do so. I will never forget the look in her eye or the way she thanked me a million times. But what really made all the rejections bearable was to be able to see the positive effect that I had made on her family by countering the objections with sound advice. It was priceless and will never be forgotten. I am sure that all of you have heard stories similar or maybe you have some of your own. It is paramount to our business that we strive to make our clients realize the importance of not just having life insurance but having the proper amount of insurance. But what’s more important is remembering why you chose this industry as your profession, recognizing the value you have to offer, and never let rejection get you down. Answer objections with facts, convey information confidently, and show your determination with persistence.
Six Questions for Six Life Insurance Sales to Seniors…
Presented by Brian Leising Do you have senior clients? Did they purchase only one product from you? Was it a Medicare supplement, annuity, long term care or final expense policy? If you were able to uncover the need for one insurance product, could you uncover another? What if you had six simple questions to ask your clients that would uncover additional sales? Once you have determined your client has the proper life insurance coverage, you should be asking them: “Have you protected yourself from the high costs of extended care should you become ill or frail as you age?” The high cost of long term care is the greatest threat to a client’s retirement funds by far. After a fall, the stock market bounces back, the elderly do not. Long term care insurance has traditionally been used in this situation but is not a good fit for everyone. Linked benefit, life insurance based long term care policies offer protection with guarantees not found in traditional policies. The life insurance based solutions guarantee the client’s premiums will never change. They also guarantee a benefit will be paid out. If the long term care benefit is never used, the death benefit will pass to the insured’s heirs. Your clients are not really protected until they have some form of extended care coverage in place. In part four, I will review a question to ask seniors who have their protection in place and have extra funds to leave to following generations.
Annuity Hybrid LTC Plans
Presented by David Corwin The Need: Let’s say you have evaluated the possibility that you will need long-term care at some point in the future and concluded that purchasing long-term care insurance to cover at least a portion of long-term care costs might make sense in your situation. You are, however, concerned about paying premiums for insurance coverage that you may never need. Alternatively, you may have several needs competing for the dollars you have available to invest. A Possible Solution: You may be interested in a newer generation of long-term care insurance that blends several types of insurance coverage in a single contract. These “hybrid LTC” policies, also known as asset-based plans, combine the benefits of an annuity with the availability of long-term care benefits should you need them in the future. Annuity/LTC Hybrid Plan: With an annuity/long-term care plan, you purchase a single premium deferred annuity, usually with a lump sum deposit. You choose the amount of long-term care coverage you want (generally 200% or 300% of the amount of your lump sum deposit) and how long you want the coverage to last (usually two to six years). You must also decide if you want to include inflation coverage for the long-term care benefit. If you never need long-term care services, the annuity can be redeemed for its accumulated value at its maturity date, or it can be left to accumulate at interest and the long-term care benefits will remain available. When you die, your beneficiaries may inherit all or some of the accumulated annuity value, depending on any long term care benefits paid during your lifetime. Assuming you have the liquid assets available to purchase a single premium deferred annuity, your financial advisor can assist you in designing an annuity/LTC hybrid plan that fully funds at least a portion of future long-term care expenses through an annuity that has the potential to increase in value for the future benefit of you or your heirs. Taxation of LTC Hybrid Plans: New tax rules that went into effect on January 1, 2010, clarified the taxation of LTC hybrid plans, including: Tax-Free Payment of Long-Term Care Benefits: The cost of any long term care benefits charged against the cash value of an annuity contract will not be includible in gross income, but will reduce your investment in the contract. Tax-Free Exchanges of Existing Annuity Contracts: If you have an existing annuity contract that you do not need for other purposes, you can exchange it on a tax-free basis for an LTC hybrid plan. Tax-free Section 1035 exchange requirements can be complex. In order to avoid unforeseen and/or negative tax consequences, you should seek professional tax advice before implementing a Section 1035 exchange.