The Income Stream Death Benefit – Part Three

Presented by Brian Leising

I’d like to help you close more life insurance sales by showing how an income stream death benefit can help your clients save money and better understand how their coverage works. We will explore the problem in part one, present a money-saving solution in part two and simplify everything in part three.

Make it easy

I realize the example in part two did not take into account the fact that a beneficiary receiving a lump sum could invest that amount and receive more than the lump sum divided by 20 each year over 20 years. Assuming a modest 3% interest rate, $735,490 would provide the beneficiary $50,000 per year for 20 years. A 30 year term life policy based on that face amount would cost only $638 per year. That’s actually slightly lower than the income stream death benefit price of $647.75 quoted previously. Why would a client pay an extra dollar per month for the income stream? Simplicity. What’s easier to understand: “$50,000 for 20 years” or “$735,490 invested at 3% should generate an income stream of $50,000 per year for 20 years. “

Sometimes we fail to understand the majority of the population does not deal with interest rates, inflation and compound growth on a daily basis. Keep it simple.

For income replacement life insurance sales, consider using the income stream death benefit option. It will help you close more life insurance sales, potentially save your clients money and certainly give them a better understanding of how their coverage works.

The Income Stream Death Benefit – Part Two

Presented by Brian Leising

I’d like to help you close more life insurance sales by showing how an income stream death benefit can help your clients save money and better understand how their coverage works. We will explore the problem in part one, present a money-saving solution in part two and simplify everything in part three.

What’s the solution?

  1. Conduct a needs analysis with everyone you see, discuss paying off debts and funeral expenses, funds for college and income replacement.
  2. Instead of a lump sum for their income replacement needs, use an income stream death benefit to clearly show how life insurance fulfills a client’s needs. Several insurance companies offer clients the exact income amount and time period they need to replace lost income. Better yet, clients receive a discount when choosing an income stream rather than purchasing a lump sum. For example, assuming a male age 35 receiving the best available rate class, $1,000,000 of 30 year term would cost $814 per year. If the need was actually to provide $50,000 per year for 20 years (still a $1,000,000 pay-out) the client could pay as little as $647.75 per year using an income stream death benefit option. That’s about a 20% savings in annual premiums amounting to a total of nearly $5000 over the life of the 30 year term policy.

The Income Stream Death Benefit – Part One

Presented by Brian Leising

I’d like to help you close more life insurance sales by showing how an income stream death benefit can help your clients save money and better understand how their coverage works. We will explore the problem in part one, present a money-saving solution in part two and simplify everything in part three.

The Problem

How many people do you quote term life insurance for every year but never take action? Many of those people did not purchase life insurance from someone else. They are still uninsured. How can you get them back in your office? You may need to revise your approach. How do you determine how much coverage a person needs? What needs analysis system do you use?

Many people do not purchase life insurance because they don’t see the need. Many of those with insurance have no idea why they purchased the amount they have. The amount was likely a random number they picked among many their agent presented. If an analysis was conducted, they may have been intimidated or confused by the large face amount presented. Many people do not understand how large a lump sum is actually needed to provide adequate income replacement.

Major Premium Increases Projected for Part B Medicare in 2016

Presented by Leonard Berthelsen

Several reports recently, including one from CSG Actuarial, have indicated that there is going to be a major shift in the financing of Medicare Part B in 2016.

It is being reported that the Part B premium that Medicare recipients pay will increase from $104.90 per month to $159.30 per month. That is a 51% increase! The Part B deductible is projected to increase from $147 annually to $223. Again, a 51% increase!

The big unknown here is whether the Medicare Supplement carriers will follow suit and increase premiums as well. Plan F Medicare supplements are projected to have claim costs of up to 8% higher in 2016 due to the increased Part B deductible. On the other hand, the Plan G Medicare supplement is anticipated to be premium neutral for the carriers as the deductible is paid by the Medicare enrollee.

There has been no official report from Medicare or CMS about these reported increases but we have come to accept that those announcements are generally made late in the year prior to implementation.

What does it mean to a producer that has the discussion with their clients about Medicare and supplemental coverage? Simply put, some real opportunities for you and your clients.

If someone has a Plan F Medicare supplement and is insurable, there very well may be an opportunity for a discussion about a Plan G Medicare supplement. Carriers will undoubtedly tout the major differences between the G & F plans that they offer, and pricing certainly will be at the forefront. There could be an unusually large group of Medicare supplement clients looking at alternatives when these new rates go into effect.

With Financial Brokerage rolling out our Medicare supplement line of carriers later this month, there will be some opportunities presented to you with these changes. We are offering a great carrier line up, competitive commissions, state of the art quoting-to-application electronic quote system and Shared Success credits all in helping you be successful in your practice.

Six Questions for Six Life Insurance Sales to Seniors – Part 6

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?

When you meet with a person who is a grandparent, what photos do you see on their walls? The photos of their children are long gone and the walls are now adorned by their adorable grandchildren. Just try to ask a question about their grandchildren and see if you can get a word in edgewise for the next hour. They love to talk about their grandchildren and would do just about anything for them. Did you ever think to ask “Who handles your grandchildren’s life insurance and college funds?”  Parents may not have thought about these topics and if they did, may not have the funds to pay for them.  Chances are your senior clients have more disposable income than their children and are in a better position to help.  They are at a stage of their lives where their primary concern is leaving a legacy.  Two gifts their grandchildren will always remember will be their first life insurance policy and their college tuition paid for by Grandma and Grandpa.

If you have been following my “Six Questions for Six Life Insurance Sales to Seniors” posts, you now have six easy conversation-starting questions to ask your senior clients.  You know what direction the conversations should take and what sales they will lead to.  For resources to implement these ideas, send me an e-mail (bleising@fb-inc.com) and we can discuss further.