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

College Funding with Life Insurance – Part One

Presented by Brian Leising If you work in the college planning market, you are well aware of strategies to move assets or overfund permanent life insurance policies for tax-free cash.  What’s better than rearranging existing dollars into better funding vehicles?  How about FREE MONEY! One of our life insurance carriers actually offers college scholarships to children and grandchildren of policyholders. Here is a link with more details on Foresters competitive scholarship program. They specialize in low face amount non-med term and final expense whole life.  This would be a great addition to existing college planning and a great fit for families without the resources for larger college funding plans.
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.
Long Term Care and Disability Insurance

Critical Illness Insurance for the Small Business Owner

Presented by Tim Dreher What kind of an illness or injury would it take to keep a small business owner at home and away from their business?  A bad case of the flu or a broken arm, probably not.  Most business owners got where they are today by being diligent hard workers who have shown up every day to get the job done.  It would take something more than a little illness or injury to keep them at home.  However, an event such as a heart attack, stroke or a cancer diagnosis probably would. Critical illnesses are striking more Americans every single year.  Some 1.4 million Americans are diagnosed with cancer (American Cancer Society) annually.  An estimated 785,000 Americans will have their first heart attack and some 600,000 Americans will experience their first stroke (American Heart Association), and with new advances in medicine, the vast majority will survive. The financial consequences of surviving a critical illness are something few people are prepared for.  A lot of the cost associated with caring for someone with a critical illness is covered by most health insurance plans.  But approximately 67% of all costs associated with a heart attack, cancer and stroke are non-medical costs.  Also, most high-deductible health plans have deductibles and co-pays that can easily run into thousands of dollars and yet they would still need to continue to pay their premiums. Suggest purchasing a Critical Illness policy.  This specialized insurance provides a lump-sum, tax-free payment upon diagnosis should a policyholder suffer from certain specific critical conditions. What a difference a cash payment of $10,000, $25,000, $50,000 or even $100,000 would make to a client when their covered condition is diagnosed. The money could be used to:
  • Pay off a mortgage, or just make the monthly mortgage payments, credit card debt or other loans
  • Supplement lost income as a result of waiting periods, elimination periods or deductibles
  • Find alternate medical treatment that may normally not be covered by most health insurance plans such as experimental treatments
  • Make modifications to their home in order to accommodate different health conditions
  • Or even just to take some time off to heal and not have to worry about their business but instead concentrate on getting well again.
Having a lump sum payment from a critical illness plan paid to your client just might make the difference of the business surviving. Contact your Critical Illness marketing specialist at Financial Brokerage at 800-397-9999 to get additional information about this highly important form of protection.
Long Term Care and Disability Insurance

As a Producer, it Might be a Good Time…

Presented by Leonard Berthelsen There has been a fair amount of concern and frustration in recent years among producers and consumers towards long term care insurance and what seemed like never-ending rate increases.  The amount of uncertainty related to increased rates are concerning to both existing clients and new prospects. Rate increases in previously written blocks of business probably will have some additional adjustments in years to come as the carriers grapple with trying to keep those plans above water and still profitable, especially in this low interest rate environment.  We certainly want them to pay their claims and fulfill their commitment to their policyholders, so rate adjustments become a necessary evil. Carriers today now possess more experience with this product which provides an opportunity to better understand the claims process, persistency and mortality which all bode well in the pricing of new plan designs that carriers are implementing.  Carriers are concerned with having to raise rates on clients after they purchase the insurance and are looking for ways to mitigate that issue as much as possible. Some carriers have introduced plans that have small automatic increases in premiums at set intervals throughout the plan’s lifetime.  These plans are still competitive and affordable and this design could potentially prevent rate increases later down the line. Others have brought out plans that have a credit account built into their product that allows the credits, accumulated over time, to be used to offset any rate increase that the carrier may need.  Again, this is another attempt to find a way to minimize the need for rate adjustments later on. Additionally, the hybrid and linked benefit products could be the right product for some clients. If the client is investing money into an annuity, and long term care needs are even a mild concern to them, then having an annuity with long term care benefits might just make sense.  Even if long term care issues never present themselves, the annuity value is still there to provide income or a means of funding their legacy.  There are linked benefit products that give life insurance and long term care equal footing in the plan.  If the long term care benefit is never used then the life insurance is paid out at time of death.  If long term care is needed, then the life insurance amount available for payout at death would be reduced.  The benefits are paid out one way or another. Another option carriers are looking at is pricing for high deductible long term care plans.  A consumer would select a high deductible ($50,000 -$300,000) plan and the insurance benefits would start after the deductible is met. We are seeing a different thought process as well as a different mindset from carriers regarding new innovative product designs.  They realize that their products have to offer the benefits wanted by today’s consumer at a price that is affordable. Long term care insurance products are changing but their importance is not.  There are many different ways to protect your client and their assets from a long term care issue.  The important thing is that you’re having the conversation with your clients about their long term care needs and showing them the many different solutions you can provide.