Is Waiting for the Supreme Court’s Decision on the Affordable Care Act Affecting your Bottom Line?

Presented by Leonard Berthelsen

often talk with agents like you and get varied opinions on how the Supreme Court will rule on the Affordable Care Act.  Are they going to rule in favor of the government regarding subsidies for the Federal Marketplace, or will the market be unsettled as a result of the decision?  We all speculate on what the decision is going to be, and of course have our own opinion on what should be the ruling.

The end result is simply this, the decision has very little to do with whether our clients need life insurance, disability income protection or long term care insurance.  The need will still be there, regardless of what the decision is.

Our task is to stay focused on what we can change, what we can do for our clients and how we can make a better life for those we touch every day.  It’s easy to get caught up in all the turmoil, all the discussion, but in the end we need to do what we do best, that is help our clients.

We chose our profession because we wanted to help people, and that has grown into a passion for many of you.  Keep the passion burning, stay focused on what you can affect and you will find in the end that your clients are better off knowing you and working with you.

Don’t Make Your Clients Sell at a Loss

Presented by Brian Leising

Managing the effects of financial market fluctuations is a critical element in retirement planning.  If retirees receive plan distributions in a stable or rising market, they have the potential to preserve or grow their retirement assets.  If these clients take distributions in a declining market, they are often drawing down and selling into losses.  What if they did not have to sell at a loss but had an alternative fund to draw from in those down years?  This could be a three million dollar decision.

I explain how in this quick video.

UNDERSTANDING WHAT GOES INTO A DISABILITY UNDERWRITING DECISION

Presented by Donna Ries

The purpose of disability income is to protect your client’s income in the event they should become disabled from an accident or sickness and unable to work.  The following are common areas every disability carrier considers.

Age:  Disability income insurance is designed to protect your client’s income during their working years.  The issue age has a direct impact on the premium paid for coverage.  Generally the issue ages are between the ages of 18 – 60 (the higher the age, the higher the premium) and since no one has found a way to reverse the aging process yet, we have to go with their current age.

Income:  The benefit amount your client considers has a direct correlation with your client’s income.   The entire amount of income is typically not covered; otherwise, the client would not typically have an incentive to try and return to work.  If your client is paying for their own disability insurance with after-tax dollars, the monthly benefit amount averages between 50% to 60% of their income and it would be paid tax free.  However, if your client’s employer is paying for coverage, or if the employee is paying the premium with pre-tax dollars, a larger monthly benefit is typically allowed because the benefits are taxable to the employee.

It is also important to specify if your client is self employed.  If the client’s income is derived from 1099 reportable income, then the amount of income needs to be stated in terms of net income instead of gross income because of the business deductions allowed.

Occupation:  Disability protection deals with the type of work your client participates in.  The more hands-on or risky the occupation, the higher the premium could be.   It is important to find out your client’s day-to-day duties and not just a job title to determine their occupational class.  For instance, if your client states that they are a manager, that description is too vague to determine a quote.  A little bit more information will help in determining what occupation class to quote from.  Managing a clerical staff is certainly different from managing a tree trimming crew.  The risk between these two types of managers is significantly different.

Health:  Your client’s overall health is taken into consideration.  Height and weight certainly play a role in determining eligibility and each carrier has a slightly different approach with this issue.  Your client’s health history is taken into consideration when determining eligibility and it may necessitate an exclusion if the health condition is significant.

These considerations for disability insurance are common factors no matter what carrier you choose for your client.  Having a better understanding of what goes into the underwriting of disability protection will certainly help you better explain the process for your client.  Feel free to call your Financial Brokerage DI marketing specialist at 800-397-9999 to help you pre-qualify your client.  We are here to help you quote and place your next disability case!

 

The Important Decision at Retirement

Presented by David Corwin

Did you know that, at retirement, you might have to make a difficult decision that could negatively impact your future financial security and that of your spouse? At retirement, you will have to decide how your pension benefit will be paid out for the rest of your life:

Should you elect to receive the maximum retirement check each month for as long as you live, with the condition that upon your death, your spouse gets nothing?
OR
Should you elect to receive a reduced retirement check each month, with the condition that upon your death, your spouse will continue to receive an income?

Did You Know…
* The decision you make will determine the amount of pension income you receive for the rest of your life?
* This decision is generally irreversible?
* In making this decision, many people unknowingly purchase the largest death benefit they will ever buy and one over which they have no control?

If you are married, federal law requires that, in order to protect your spouse, you must elect a “joint and survivor” annuity payout option for your pension benefits. This guarantees that your surviving spouse will continue to receive at least one-half of your pension income.

This concept is sound, except that you have to pay for a joint and survivor annuity payout option:
* Your pension benefit is reduced for as long as you live.
* If your spouse dies before you, your pension benefit cannot be restored to its unreduced amount.
* All pension payments cease when both you and your spouse die.

Let’s look at the results of the three most common pension benefit options, using a hypothetical example:

Life Income Option: If you receive your pension benefit under the life income option, you receive the maximum lifetime pension payment. If you die first however, your surviving spouse receives nothing after your death.

Joint and One-Half Survivor Option: If you elect the joint and one-half survivor option, you’ll receive a lower lifetime pension payment. On the other hand, if you die first, your surviving spouse will continue to receive a lifetime pension benefit equal to 50% of your pension benefit prior to your death.

Joint and Equal Survivor Option: With the joint and equal survivor option, you’ll receive a significantly lower lifetime pension payment. Your surviving spouse, however, will continue to receive 100% of your pension benefit if you die first.

In making this important decision, you should evaluate the risks associated with retirement income protection funded with life insurance:
* Your income after retirement must be sufficient to ensure that the life insurance policy premiums can be paid and coverage stay in force for your lifetime. Otherwise, your spouse may be without sufficient income after your death.
* If your pension plan provides cost-of-living adjustments, will upward adjustments in the amount of life insurance be needed to replace lost cost-of-living adjustments after your death?
* Does your company pension plan continue health insurance benefits to a surviving spouse and, if so, will it do so if you elect the life income option?