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 1 – Payment frequency Life insurance policies with extended care benefits come in single-pay or multi-pay varieties. The single-pay plans were the first life insurance based extended care plans on the market. Clients pay one lump sum into a modified endowment contract (MEC) which is leveraged to purchase a death benefit and a long term care (LTC) benefit. In many situations, the death benefit approximately doubles the lump sum and the total long term care benefit nearly triples the lump sum. This policy design works well for clients with money already set aside to “self-insure” their extended care risk. Potential clients for multi-pay policies comprise a much larger market and account for most sales. These are funded with recurring (annual, semi-annual, quarterly, monthly) premiums and are an affordable option for clients who are used to paying for all their insurance policies (auto, homeowners, traditional LTC, health) in this manner. Look for Element 2 – No-lapse guarantee in February.
Life Insurance

MYTH: “I won’t need life insurance when I retire.”

Presented by Brian Leising

Four responses you can use with your clients.

  1. Really? So, that means you are getting a free funeral?

The last time I checked, it is actually against the law to dump a body in the nearest ditch, bury someone in the backyard or cremate your remains in a giant bonfire (marshmallows anyone?). You won’t die for free. Cremation may cost less than a traditional burial, but morticians and funeral homes still like to be paid for their services. Why reserve dollars you could spend and enjoy when a basic life insurance policy will cover your final expenses for pennies on the dollar? With no planning, you will become a burden to your family. (Unless they’re skilled with large bags, ropes, rocks, have a large car trunk and live near a body of water. Oh, wait, that’s the other kind of Family.)

See response #2 next week.

Life Insurance

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? Let’s start with the first, most basic question: “What planning have you done for your funeral?”  Listen to your clients speak.  They may discuss their will, preferred cemetery, music to be played, what funeral home to use.  When they finish, follow up with “How will your family pay for all that?  Do they really want to pay full price?”  This conversation could lead to a fully underwritten life insurance sale, but don’t neglect basic final expense policies.  Some people don’t need anything more than a basic burial plan.  In lower income households, that may be the only sale possible.  Premiums are guaranteed to remain level and underwriting is simple and fast.  You should know whether your client qualifies for coverage before you walk out the door.  People still purchase pre-paid funerals from funeral homes, you can offer them greater leverage on their dollars. Next week I will review question number two, for use with people who already have life insurance policies in force.
Life Insurance

QUICK TWO-COLUMN LIFE INSURANCE NEEDS ANALYSIS SYSTEM – Part…

Presented by Brian Leising This is the short-form life insurance needs analysis system I use with life insurance prospects and clients.  The ten minute conversation achieves the same answers as an inch-thick comprehensive analysis, without the fancy full-color report.  Here’s how it works: Ask your client to take a piece of paper and draw a vertical line down the middle.  The heading on the left should be FIXED EXPENSES.  The heading on the right should be ONGOING INCOME NEEDS.  Start on the left.  Everybody needs funds to cover their final expenses (casket, burial, cremation).  Ask you client if they have any idea what that costs.  Maybe they had a loved one pass away recently and know current expenses in your area.  If not, I suggest $10,000-$20,000.  Next, ask them to list all debts they would like to pay off upon death. The largest will be their mortgage if they own their home.  Automobiles and credit cards should make up the remainder of the debts.  If the client has children, ask how they plan to fund college tuition.  If that is in their plans now, you can include an amount to cover that need in this column.  You could use other resources (outside the scope of this article) to determine what future tuition may cost.  You may want to revisit that portion at another time if time is a concern. Add up the numbers on the left column.  Ask your client if all those things were paid off, would they be able to maintain their standard of living on the remaining spouse’s income?  If they hesitate or are unsure, suggest that when one spouse passes away, the remaining spouse and children will need roughly 70% of the former combined income to maintain their standard of living.  Usually they will need some additional income. We will take a look at those ongoing income needs in the right column next week.
Life Insurance

Three ways for a Property and Casualty Agency to…

Presented by Brian Leising   Are you concerned about losing clients to your competition?  Looking for new ways to boost your retention rates and grow revenue?  The average client retention rate is 10% higher when agencies cross-sell products.  Many agencies fail to effectively cross-sell life insurance because they do just a few basic things the wrong way.  You need a plan.  Here are three items that all successful agencies use to sell life insurance to their auto and homeowners’ clients: Have a system in place to ask for life insurance business.  It doesn’t matter what system you use, have one and use it.  One agent I know has a dollar bill and sign on his desk that says “This dollar is yours if I don’t ask you about life insurance.”  Do you send out annual review letters or e-mails?  Be sure you include life insurance.  You could also play a video in your office waiting area.  The LIFE organization has several “Real Life Stories” available at www.lifehappens.org. Work on this first, then check back next week for part two.