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.
Annuities

Financial Surprises of Retirement Paychecks

Presented by Richard Mangiameli When we started working, one of the biggest surprises of our young adult life was the difference between our gross and net paycheck!  We were introduced to the world of Income Tax withholdings. Forty or so years later, we get the next biggest surprise – not having enough money to retire with!  Again, the difference between our gross and net retirement paycheck.  Retirees are concerned about their retirement income being under siege with expenses, mandatory medical spending, lifestyle and outliving their money.  This is an area where you, as an insurance professional, can protect your clients and help them with product solutions. A clear view of the current trends in the retirement landscape will take you a long way toward finding the product to provide the solution.  For example, the big focus today is the need for guaranteed income for life, without the fear of losing control.  With fewer company pension plans and increasing life expectancy, retirees face a growing gap between income they can count on and expenses they expect to face.  Fixed Index Annuities can offer predictability, no direct downside market risk, and the potential for guaranteed income for life – an attractive benefit to clients searching for ways to leverage assets and build a more stable future. After the 2008 market crash, many people found their financial foundation was not as sturdy as they once thought.  With the risk of longevity, medical expenses and inflation affecting retirement income calculation, many are looking for ways to supplement their income, accumulate assets and cover basic living expenses in the future.  The opportunity to have upside potential, with no downside risk, provides your clients with peace of mind for long-term financial security, asset accumulation and can provide guaranteed income for life. Fixed Index Annuities with an Income Rider can offer the “peace of mind” benefits that retirees are looking for today.  If you need to know more about how the Fixed Index Annuities with Income Riders work, call Richard Mangiameli, LUTCF, FSS, at 800-397-9999.
Long Term Care and Disability Insurance

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!  
Annuities

The Gift of a Lifetime . . .

Presented by Richard Mangiameli As we work with seniors, it is very important not only to protect their principle but also to provide them with a Gift of a Lifetime Income. Help them choose from all these many options:  roll-ups, spreads, cap rates, bonuses, company ratings, liquidity needs, surrender charges and withdrawal options. This article in NAIFA’s Advisor Today, will encourage you and remind you to remember to be proud of what we provide. http://www.nxtbook.com/naylor/NAIS/NAIS0215/index.php?startid=30
Long Term Care and Disability Insurance

DISABILITY INSURANCE SOLUTIONS FOR DIFFICULT OCCUPATION CLASSES

Presented by Donna Ries   All occupations have a need for income protection, but some occupations may be more difficult to insure with certain carriers for disability insurance than others.  Two occupations in particular, which have a wide interpretation of DI coverage, are Chiropractors and Paramedics or Emergency Medical Technicians (EMT). Chiropractors are viewed differently by DI carriers; some are willing to insure them, others are not and even others offer limited benefits.  The nature of their occupation is considered risky by both claim experience as well as the physical demands of the job.  Having to adjust their clients by lifting, bending and physical contact with their clients is considered a manual profession.   In a worst case scenario, some DI carriers would not even consider insuring a Chiropractor.  There are other DI carriers that would insure up to a two year benefit period and still others that would offer a Chiropractor a five year benefit period.  So when we think this profession might be one to avoid when considering DI protection, take another look and you might just be surprised. There is even more diversity in coverage choices available for a paramedic or EMT.   At worst, one DI carrier would not consider this profession for coverage, yet another DI carrier would consider for short term disability only.  There are also DI carriers that would offer a two year benefit and another carrier all the way out to age 67.  With physical exertion and initial patient contact, yes there is increased risk but still insurable. The point is that Financial Brokerage offers multiple DI carriers and solutions for both of these occupations and many more.  With the diversity between multiple DI carriers, you can count on Financial Brokerage to find which carrier would best meet your client’s needs. Give these occupations some consideration and give your DI Sales Manager at Financial Brokerage a call at 800-397-9999.  I think you will be pleased by the outcome.