Long Term Care and Disability Insurance

Why You Need to Sell DI Regardless of Your…

Presented by Tim Dreher Many agents and advisors that I talk to just like you are not what I would consider “generalists” but have specialized in one type of insurance product or service. Regardless of your focus, Income Replacement insurance is a product that you should also be talking to all of your clients about to help them protect their most valuable asset…their ability to earn an income. Some of you focus your practice on the sale of life insurance. One of the reasons that you sell life insurance is to provide dollars to replace an income in the event of a death. Your client’s chance of a disability are so much greater than a premature death. Disability Income insurance would also benefit your client by providing income replacement in the event of a disabling accident or illness. Consider combining a death benefit with a living benefit to provide complete and comprehensive coverage for your client. Statistically, you are 16 times more likely to lose a home to foreclosure due to a disability than to a death. If the focus of your insurance practice is on selling group benefits, then you probably already know the importance of protecting your client’s most valuable asset, their ability to earn a paycheck. But do you also realize that many times group long term disability plans, although a good start, might not provide, due to limited benefit amounts and benefit duration, adequate protection in replacing a large portion of your client’s income in the event of a disability? Additionally, group DI benefits are normally either paid by the employer or are paid by the employee on a pre-tax basis. In this case, any benefits paid out to an employee because of a disability would likely be taxable, thus reducing their benefits even more. Supplementing their group LTD with an individual policy is an excellent way to make sure that the client is adequately covered. For those of you that focus on retirement planning, a disability that causes a loss of income can have a devastating effect on your client’s ability to continue to fund their retirement accounts. There are several carriers in the DI marketplace that have income replacement plans that not only help take care of your client’s monthly living expenses, but will also continue to contribute to your client’s retirement account while disabled. That becomes a double win. Finally, many of you are investment advisors and money managers. For most of your clients, their most valuable asset is their ability to earn a living. As their advisor, it should be properly managed and protected just as you would any other asset. Many wealth management advisors charge a fee of roughly 2% of assets under management. Similarly, in most cases, a properly designed Income Replacement policy (DI) can also be as little as 2% of your client’s income. There are many reasons to talk about DI with your clients. It helps you to diversify your portfolio of products and it’s also a great door opener to many sought- after markets, such as high income individuals and business owners. It’s also a great way to ensure that, in the event of an accident or illness that prevents your client from working, they would still have the ability to continue to pay their bills, including the premiums on those other products and services they already have with you.
Life Insurance

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.
Life Insurance

Born to Sell

Presented by Jim Linn Were you Born to be Wild, Born to Live or Born to Sell?  I’m sure all of you are the first two, but I happened to come across an article titled “Born to Sell.”  The article discusses whether sales professionals are born with innate sales ability or if it’s a learned/coached behavior.  It goes on to discuss how we can increase our sales characteristics with some helpful easy to implement concepts.  Click the link below for the full article and some helpful tips. Click here
Life Insurance

SELL MORE INDEX UNIVERSAL LIFE BY ASKING FOR LESS…

Presented by Brian Leising   When presenting Index Universal Life (IUL), we usually position the product as an either/or decision.  You either place your retirement dollars in an IUL or continue placing them in your 401(k).  When it works, this all or nothing approach is great.  What happens when this approach fails? Do you think some people are afraid to place all their eggs in one basket?  Consider this: don’t ask for all their eggs, just a few.  Here is the second way you can position IUL as a retirement plan supplement: Consider positioning IUL as a resource to tap during down markets.  During retirement, people need a steady income whether the stock market is up or down.  If a client withdraws money from a qualified plan invested in stocks when the market is down, they are selling at a loss.  This has a detrimental effect on their total funds over time.  What if they did not have to sell at a loss? What if they had an alternative fund to draw from in those down years?  Here is an example: The years 1973 through 1993 included five years with stock market losses.  Using this strategy, a client would only need their IUL to cover five years of loans or withdrawals, not all 20.  Since clients pay taxes on withdrawals from qualified plans, not on life insurance loans, the net amount needed from loans is actually lower than their qualified plan withdrawals.  You don’t need to ask for nearly as much money to fund five years of a reduced income need.  It should be much easier to redirect a portion of a client’s retirement contributions than all their contributions. How can these two ideas presenting IUL as a retirement supplement lead to more IUL sales?  1) Prospective clients tend to be more receptive to redirecting or moving some of their money rather than all of it.  This will help you close more sales.  2) Once they see the benefits of having an IUL, clients will ask to place even more money into the contract.  They will even think it was their idea.
Life Insurance

SELL MORE INDEX UNIVERSAL LIFE BY ASKING FOR LESS…

Presented by Brian Leising   When presenting Index Universal Life (IUL), we usually position the product as an either/or decision.  You either place your retirement dollars in an IUL or continue placing them in your 401(k).  When it works, this all or nothing approach is great.  What happens when this approach fails? Do you think some people are afraid to place all their eggs in one basket?  Consider this: don’t ask for all their eggs, just a few.  Here are two ways you can position IUL as a retirement plan supplement. One way to position IUL as a retirement plan supplement requires knowledge of social security and tax planning.  The IUL becomes one of three components in a comprehensive retirement plan.  To make this work you need to understand two features of the social security program: 1) if a client receiving social security benefits also receives taxable income, their social security income may be taxable; 2) social security benefits increase if a person waits until age 70 to receive benefits.  If your client has sufficient resources, they can maximize their social security income and minimize taxes simultaneously.  Here are the steps to make this happen:
  • When the client retires, they should withdraw money from their qualified plan first. Reduce the fund as much as possible.
  • At age 70 the client begins social security payments.
  • If they still have money in their qualified plan after age 70, they will need to take required minimum distributions. For most people, RMD’s will be low enough to not affect the taxation of their social security benefits.   Of course, social security and RMD’s together may not provide enough funds for your client’s living expenses.
  • Now their IUL can help. The client can take tax-free loans from their policy with no effect on the taxation of their social security benefits.  If their qualified retirement plan was liquidated, they would pay no Federal income taxes for the rest of their life.
You do not have to fund the IUL as their sole retirement vehicle.  Use the IUL as a planning component along with their 401(k) and social security income.  By waiting, their IUL has more time to grow, their social security benefit has more time to grow, and your client enjoys greater net income due to lack of taxation. Look for part two next week.