Life is Precious and We are Only Here for a Limited Time

Presented by Leonard Berthelsen

Wow, is that a profound statement or what? The loss of a loved one or even an acquaintance brings us back to the stark reality that our time is certainly limited in this world and hopefully we have made the most of it.

Some 20 months ago, I wrote about my very good friend that suffered from Alzheimer’s and that the disease eventually took his life. I have thought about him often over the months and pondered what it would have been like if the disease hadn’t affected him. His children and grandchildren would still have the loving, caring man that he had become. His wife would still have her soul mate and I would still have my dear friend to see each week.

Those 20 months have been difficult, as you can imagine, for his wife as she struggled coping with her loss but yet still needing to live on. My conversations with her continued as she put her life into some kind of order, now being widowed, and insurance was a small part of that conversation. Her husband had long term care insurance and they used it for the 18 months that he needed care. Did it make sense to have her continue with her plan as she had a daughter who could help with any care that may be needed, she asked? I reminded her that she wouldn’t live long enough to ever pay into her long term care plan that would equal the benefits paid out for her husband’s care. If she never used the plan she would at least have the comfort knowing that it was there.

My friend’s wife passed away in mid-October after not surviving open heart surgery. She never used her long-term care plan but I know that she was okay with that. The comfort of knowing that her daughter wouldn’t be burdened with providing care was all the motivation that she needed in making the decision to keep her insurance plan in place.

She led a wonderful life full of joy and successes. Even after her husband’s passing some 20 months ago, she was determined to live life to its fullest. I guess that is all any of us really want.

THE TIME TO ACT IS NOW

Presented by Deb Strong

Baby boomers are learning about the importance of securing guaranteed lifetime income, and with the help of their agents they are reaping the benefits of a secure retirement. As more and more boomers approach retirement age and obtain annuities to cover their basic expenses, this demand, coupled with increasing life expectancies can have a dramatic effect on payout rates for future purchasers.

Coming up in January of 2016, insurance carriers will be using 2014 Mortality tables, versus the 2000 Mortality tables. We will be seeing a 2.4 percent increase in life expectancy with a 65 yearold male.  And we will see a 2.8 percent increase in life expectancy with a 65 yearold female.  You may be asking yourself right now how this is going to affect insurance companies and ultimately, the consumer.  Because these updated mortality tables will be adjusted to properly reflect longer life spans, insurance companies may have no choice but to lower their payout rates.

The bottom line is, even though people may be asking themselves why they should buy an annuity in today’s low interest rate environment, I would challenge them by saying that today’s rates are not low, but instead the new rates.  Today’s rates could be the highest you see for  a very long time. They are a longevity credit play. 

We will more than likely, see payout rates drop in 2016; some insurance carriers may lower the rollup rates, others may adjust the factors used when turning on income or when annuitizing.  But, mark my words, we will see changes next year.  How are you equipped to handle this when your clients start asking you questions about their future income?  And certainly, you don’t want them to be caught off guard when they find out next year that they could have had a greater opportunity if their advisor would have told them in 2015.  There is no time like the present to help your clients lock in a good payout rate today!  Consider this concept: if you’ve had clients that are reluctant to get started, then have them start a contract, such as those offered through American Equity, with a deposit of $5,000 (or similar) today.  That locks them into current payout rates and allows them to make future deposits under the same rates!   

We can help find the right carrier and product to match their needs!

Where did the time go?

Presented by Jim Linn

During your commute home, do you ever feel that you did not get as much accomplished this week as you would have liked?  That you definitely put in the “time” but did not achieve what you set out to do in your personal and/or professional life.  There are only 24 hours in a day and unless you know how to create your own time space continuum, that’s the way it’s going to stay.  So how do you accomplish the goals/activities you set out to do and on your commute home feel a sense of accomplishment?  There are many books, online resources and organizations that provide insight to achieving this but, if you don’t have time to do what you need or want to do how are you going to find time to utilize these resources?  Herein lies the problem: “TIME”.  I have an exercise I would like to ask you to try and, no, it will not take up any significant amount of time to accomplish:

  1. Get a copy of a daily planner page or just write out the hours of your typical day (if the time is broken down in 15 or 30 minute intervals, all the better).
  2. Make 5 copies of this page and title each one with the day of the week.

Each day when you start your day, log what you did during the time intervals (drive time, checking emails, administrative, prospecting, marketing, personal time, surfing the web, etc.)  This is just for you, so honesty is the best policy.  If you spend 30 minutes reading the paper, put it on the planner.  Continue this throughout your day for the full 5 days.  When you have completed the 5 days, add up the time you have spent over the last week by category (client presentations, surfing the web, administrative duties, prospecting, etc).

Once totaled, this will give you a clear idea where your time is being spent and perhaps allow you to make adjustments as necessary to utilize your time in the most effective manner possible.

As a Producer, it Might be a Good Time to Re-look at Long Term Care Insurance

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.