Life Insurance
Life Insurance
Life Insurance
Long Term Care and Disability Insurance
Long Term Care Concerns
Presented by Michelle Daharsh Not many people really ever want to think that they will need long term care services because it is not a pleasant thought. Having to rely on someone else because we became frail or our cognitive ability has slowed are certainly not things that we look forward to. According to the 2015 Medicare & You, Centers for Medicare & Medicaid Services, 70% of people over the age of 65 will need long term care services and support at some point in their life. Sort of an ominous fact, don’t you think? Ask your client this simple question: “What is your greatest concern when it comes to long term care?” This question will be sure to stir up answers ranging from not having to rely on their family for care, or staying in their home as long as possible, or they hear it is awfully expensive. Maybe their concern is protecting the legacy that they worked so hard to build over the years? Regardless of the answer, the end result is most likely all the same – if a long term care event occurs and they don’t have long term care insurance in place, all of these concerns can, and likely will, be exposed. Being able to uncover your clients’ concerns for long term care puts you, as the agent, in a position to educate them on what protection it does provide. Not only does long term care insurance provide care for the client, but it also protects the family, their home and their legacy. Show your clients the need for long term care insurance first – ask them questions, assess their situation, and help them understand their options. Doing this will give them the peace of mind that their biggest concerns are protected and making the purchase of long term care insurance a much easier decision.
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: In part one, you were instructed to 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 (reviewed in the first article). The heading on the right should be ONGOING INCOME NEEDS. Ask your client if their fixed expenses 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. Let’s use that 70% number for the right column. Add the incomes of the couple and take that number times 70%. That’s the income they still need if one passes away. For example, if you had a couple with one spouse making $60,000 and the other making $40,000, one remaining spouse would still need $70,000 total. That translates to an additional income need of $10,000 if the $40,000 spouse dies, or $30,000 if the $60,000 spouse dies. How can we use life insurance to provide that income stream? I like to use easy math. Let’s say we need to generate $30,000 per year. A lump sum of $300,000 earning 10% interest would generate $30,000/year without reducing the principal ($30,000 times 10). A lump sum of $600,000 earning just 5% interest would do the same (half the interest rate, double the lump sum). You could split the difference if the client expects a rate of return in between, $450,000 at 7.5% interest. Use your judgment and ask your client what return they would reasonably expect to earn based on their past investing experience. Once you have the numbers from both columns, add them together to arrive at the amount of coverage your client just told you they need.
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