By: Gary Bleetstein
Partner, Agent Support Group-11-17
While Long Term Care is not the easiest topic to discuss or write about, it is one of these things in life that will be weighing on many families for many years.
Yes, people are living longer, however, we must consider their overall conditions and if a parent or sibling is living longer because of a Long Term Care issue, is this any better for society.
November is Long Term Care Awareness Month and it is for this reason I wish to try and point out some important items and issues with Long Term Care.
By now, we should all know how Long Term Care needs are becoming a larger part of our business, even in the high net worth markets. Costs for Long Term Care at home or at a facility are escalating with no real reductions in costs at this time.
The National Median Annual Costs for Long Term Care are –
· $ 91,250 for private room in a nursing home ($ 7,600 monthly)
· $ 80,300 for a semi-private room in a nursing home ($ 6,700 monthly)
· $ 45,760 for Licensed Home Health Aid ($3,800 monthly)
· $43,200 For Assisted Living ($3,600 monthly)
Let’s just look at one situation – a 75-year-old with full onset of Alzheimer’s. Choices for care become limited without a tremendous amount of family resources and money. Of course most prefer to keep a patient at home rather than in a facility- but this is not always possible. Should the patient require a nursing home in the major cities in the Northeast- these costs can run over $12,000 a month or $ 144,000 a year. If the cost of care for this individual is for 4 years – the costs could be $ 576,000 easily. Where will this money come from? and in the Northeast – these costs could be $ 750,000 or more.
Will it come from and adult child, a spouse, or a domestic partner? or Should you and your client consider protecting assets now and purchasing Long Term Care with Guaranteed Premiums and Benefits?
I feel strongly that whether a client purchases Long Term Care or Chronic Illness Care- it is our responsibility s advisors, to show our clients what is available to them.
The type of products I recommend to advisors are:
· Life Insurance with LTC or Chronic Illness Riders – with costs that are guaranteed
· Linked Benefit Products that provide either single pay or limited pay options for Life Insurance, Annuities with Guaranteed Long Term Care costs and benefits.
While this is an area of our business that can be difficult to discuss, we need to also realize that it is our job to help educate our clients to assist them in mitigating future risks and what better time to do this than right now –
Long Term Care Awareness Month
Have a Safe and Wonderful Thanksgiving
Jay Scheiner, JD, CLU, Partner
Agent Support Group/LifeMark
Insurance companies can’t keep up with buyers’ demand for instant product gratification; even “accelerated” underwriting programs aren’t fast enough for some consumers. Meanwhile, companies have an interest in eliminating costly exams and lab fees. So, 21st Century tech to the rescue! Enter Chronos, a new technology from Lapetus Solutions, Inc. (LSI), the science and technology company that uses facial analytics to estimate life expectancy, with an approach similar to what advanced law enforcement uses to predict how a fugitive may age over decades. The client submits a selfie to the insurance company and the insurance company provides an indicative quote for life insurance.
A selfie reveals more than whether it’s a good hair day: facial lines and contours, droops and dark spots could indicate how well you’re aging. A photo may reveal early signs of heart disease, diabetes, or even dementia. It can help estimate your body mass index (BMI), determine your physiological age (how old you look), and indicate whether you’re aging faster or slower than your actual age. A selfie can even hint at whether you smoke, or smoked in the past.
If a proposed insured applies for coverage with a carrier that uses Chronos, the theory is that buying a policy online could someday take only minutes; clients may also avoid a paramed exam and labs. Many insurers are looking into this new technology, but the makers of the system are reluctant to disclose which ones just yet. “[Chronos] may or may not meet the vetting process to make carriers comfortable,” says Robert Kerzner, present and CEO of LIMRA.
Facial analytics that can predict life expectancy have the potential to revolutionize life insurance underwriting, as the technology may prove as accurate in predicting risk as current methods, and additional electronic checks such as the MIB, MVR or prescription drug database might be used as a cross-check. Chronos could also streamline the process of buying insurance by reducing the number of questions clients have to answer, another sore spot for consumers. BUT – while the newswires have lit up over the past six months with articles and press releases about selfie insurance being here, THEY’RE WRONG! I can’t find a single carrier that will actually write a policy based on this technology right now. I was told by one senior insurance executive
exploring Chronos that they’re now just using it for analytics. When someone takes the selfie quote on their site, the responses go to the insurance company, which through the technology will give the person their facial age; then the information gathered goes to Lapetus for beta testing and data collection to expand their research. I was told they then delete the information. Hope so.
Will insurance-by-selfie replace traditional underwriting procedures or even the newer rule engines that companies are using to access risk and make underwriting decisions? Probably not. Could it become another tool that insurers can use to assess risk and streamline the process? That’s more likely.
And then there’s the further concern that insurance-by-selfie can become another way the industry attempts to bypass the agent in transactional insurance sales. It’s possible. One of the insurance carriers we represent has the system in the testing stage. Ominously, the company executive announcing it on LinkedIn has the title, “Vice President, Direct-to-Consumer Distribution.”
Smile and say “cheese.” This is one story we should all keep watching…
– How your Selfie could affect your life insurance, USA Today, Barbara Marquand, NerdWallet, April 25, 2017
– Can a Selfie get you quicker life insurance coverage?, Accuquote.com, Byron Udell, May 2, 2017
– Underwriting Life Insurance with a Selfie, GlobalData, Danielle Cripps, News Archives 2017
– Interview of a confidential source (We’ll call this officer “Deep Selfie”) who is a top executive at a major life insurer, September 26, 2017
by: Mark D. Milbrod, CLU
Principal, Agent Support Group-September Blog
September is Life Insurance Month and in the spirit of that, I felt it was important to repost the following…
Many years ago, while attending an industry meeting, I was listening to a talk being given by one of the platform speakers. During the speech, the speaker was talking about the industry as a whole and the importance of what we do for a living. He then proceeded to read the following to the group:
A life insurance policy is just a time-yellowed piece of paper, with columns of figures and legal phrases, until it is baptized with a widow’s tears. Then it becomes a modern miracle, a sort of Aladdin’s Lamp.
It is food, clothing, shelter, education, piece of mind.
It is the sincerest love letter ever written.
It quiets the crying of a hungry baby at night. It eases the heart of a bereaved widow. It is the comforting whisper in the dark silent hours of the night. It is a new hope, fresh courage and strength for the widow to pick up the broken threads of life and carry on.
It is an education for the sons and daughters (a chance for a career, instead of the need for a job). It is a father’s parental blessing to his children on their wedding day. It is the function of a father’s hopes and dreams for his family’s future.
Through life insurance he lives on. There is no death. Life insurance exalts life and defeats death.
It is the premium we pay for the privilege of living after death.
Although it is a bit dated and arguably a bit corny, it is powerful nonetheless. This piece was written back in 1929 by Jack J. Leterman, who established the first John Hancock Agency in the state of Virginia. As a 30 year plus veteran in the industry, I was extremely taken back by these words and have had them framed in my office ever since. I take any opportunity to share these words with as many life insurance professionals as possible.
What we do is so unique and powerful. These words are the core of what we do and I believe today, more than ever, it is so important to spread the importance of these words to our clients. This is what life Insurance was intended to do but as we all know, it has become so much more than that.
Not only does it accomplish the most simplistic form of protection to surviving spouses and children such as, Income Replacement, Mortgage Protection, or College Funding. It provides solutions to a host of other, more complex problems facing our clients today. Whether we use Life Insurance to provide liquidity for heirs of larger estates, provide Supplemental Retirement Income, funding Buy/Sell Agreements, Key-Man Protection, etc., we are positioned to use this powerful product to find solutions to these, and other planning challenges.
With uncertainties surrounding us, it is a great feeling to know that we can provide so much in the form of “piece of mind” with a simple stroke of the pen. Although the words above are over 80 years old, the core principles behind them truly capture What Life Insurance Really is.
It is Life Insurance Awareness Month so keep that in mind when you are speaking to your clients. Perhaps this can further put things into perspective for them.
Find more of Mark’s Bark’s Blogs on our website: http://www.asglife.com/insurance-view/marks-barks-blog/
By: Sam Kaufman
Partner, Agent Support Group
September is the month for advisors to get the drums out and march up the avenue to create awareness. Advisors should be proud that the benefits paid from life insurance policies contribute to the wellbeing of American families across our great country. Allowing families to continue undisrupted following the loss of a breadwinner.
However, somewhere we have all failed to beat the drums loud enough and over 40% of Americans remain without life insurance protection. Why is such a large percentage of the population uninsured? The most prominent reason is probably the fact that most advisors are not interested in writing a $500 annual premium even though they may be creating a future relationship that will purchase a larger policy later in life.
Think about the New York Yankees, a team that was laden with aged plays two years ago. Do the Yankee teams of the past resemble your client base, aged and not likely to purchase additional life insurance? Everyone has marveled over the “Baby” Yankees, they hit, they run, they play baseball. Just think how many home runs you could hit if your client base included some “Baby Bombers”.
The second place advisors fail is in policyholder engagement. As a General Agent we keep advisors informed about the status of the policies written with ASG. We prepare reports detailing term policies that are approaching the end of their level premium period. I hate to tell you where those reports go and where the later premium notices go. Think what would happen if you called the client and they indicated they had another child or that they started a new business. Perhaps this is old fashion, but it works.
We need to be proud of the product we sell and take joy in the fact that life insurance provides the financial security for families and businesses to continue following a significant loss. So get out there and march up the avenue beating your drums as loudly as possible this month. Make more people aware of the services you provide and the need for financial security.
by: Mark D. Milbrod, CLU
Principal, Agent Support Group-8-17
We have all facilitated cases with 1035 Exchanges. They are very simple. A client has an old life insurance contract with cash surrender value. We roll that money into a newly issued contract, carry over the cost basis and negate any taxation at the time of the transfer. The benefits of the lump sum coming over usually acts as a subsidy to either lower future outlays, increase guarantees and in some cases rescue some under water or heavily leveraged contracts.
But in today’s robust product environment, we can add an additional layer of benefits that was previously not available. There are a number of life insurance products today that offer Long Term Care or Chronic Illness Benefits. These products come in a lot of different flavors:
- LTC Rider (LTCR) add-ons for Guaranteed UL, Indexed UL or Whole Life
- LTC Rider (LTCR) add-ons for Survivorship Guaranteed UL or Survivorship Whole Life
- Chronic Illness Rider (CIR) add-ons for Guaranteed UL, Indexed UL or Whole Life
- Blended Life Products (Single Pay or Limited/Flex Pay)
- LTC Riders on Non-Qualified Annuity Contracts
Individual or Survivorship Products w/LTCR or CIRs:
For the most part, the life insurance contracts with an LTCR or CIR allow a facility to accept IRC §1035 Exchanges from any qualifying product. The qualifications are usually limited to the new policy bearing the same Insured/Owner as the policy releasing the funds. This should make the conversation fairly simple with most prospects. If they have an existing product that offers only life insurance benefits and it has a Cash Surrender Value, you can provide another layer of living benefits through the LTCR & CIR that had not previously existed. In the majority of cases, you will often lower the out-of-pocket cost to the policy owner, but even if the new on-going premium was the same or slightly higher, you are providing so much more in terms of benefits that the client will likely go forward with the exchange.
Blended Life Contracts:
Another area where there are high potentials for sales is in the Blended Life arena. These contracts also allow for IRC §1035 Exchanges. These products are more LTC focused and offer a modest life insurance benefit while still meeting the definition of life insurance under IRC §7702. These types of sales are typically unwritten on a non-medical basis via a client phone interview and a series of field underwritten knock-out questions. A good prospect for this type of product may be an older client with an in-force life insurance policy(ies) with cash value but a shift in need that is less life insurance focused and more LTC driven.
The last area to focus on is the annuity marketplace. There are annuity contracts that can offer LTC benefits as well. These types of transactions have a few more rules associated with them, but are classified as viable annuity to annuity exchanges under IRC §1035. The key component is that these contracts have the same taxation as it relates to withdrawals and death benefit payouts to beneficiaries. However, the true benefit comes in the form of potential tax-free LTC payouts.
When it comes to IRC §1035 Exchanges, there are so many benefits that you can offer your clients. Today however, with the Living Benefits available, there are additional opportunities that are often overlooked. The idea of adding on Long Term Care or Chronic Illness benefits to the exchange can surely start some great conversations. Based on experience, this is something that is not well known, not only amongst professionals in our own industry, but with referral sources such as Estate Attorneys, CPA’s and Trust Officers.
Don’t miss this opportunity. By adding the LTC/§1035 Exchange topic to your daily discussions, you can boost your sales by showing your clients and prospects how they can Have Their Cake and Eat it Too.
Find more of Mark’s Bark’s Blogs on our website: http://www.asglife.com/insurance-view/marks-barks-blog/
by: Mark D. Milbrod, CLU
Partner, Agent Support Group-August 17
It’s the start of August and I have already seen my first “Back to School” store displays and television commercials. Even though I haven’t been to school in years, for some reason, those three words always make me cringe.
Back to School though is all about preparing. You need to gather all of your supplies so you can hit the ground running in an effort to stay focused on your schoolwork so you can succeed in the coming school year. That makes me think about our livelihoods. Are we prepared for “our school year?” Do we have the tools we need to succeed? Are we preparing enough?
Back to School symbolizes the end of summer. And it is true that most people move at a slower pace during July and August. It is often associated with a slowdown of business. Clients are on vacations and it is harder to get in front of them. But come September, we have to be careful so that we are not utilizing that time to slowly get back into the groove. Because before we know it, it’s the end of the year and we can fall short of our goals. Just like those students, we need to be prepared so that our success can be achieved.
What steps are you taking now to hit the ground running? With all of what’s going on in our Industry today, it is truly a great time to be a part of it. There are so many unique ways in which you can help your current/potential clients.
Here is a sampling of the types of products and services that you can provide today…
* Policy Audits
* Complimentary Business Valuations
* Loan Rescue Programs
* Premium Finance Strategies
* Supplemental Retirement Planning
* Guaranteed Income Planning
* Longevity Planning using Non-Health Triggers to use Death Benefit as Cash
* Uncapped LTC Pools
* Guaranteed “Cash Back” Life Insurance
These are some hot buttons that we are widely using to generate tons of client meetings that are turning into tremendous sales. If there is something on the list that you want to know more about, we would be glad to assist you. Use this time for your “Back to School” planning. Learn more about the items on this list and how they can turn into meaningful client encounters.
Back to School is all about preparing. Use these resources wisely. Do your Homework now and identify potential prospects so that in September you will hit the ground running and have an amazing last quarter of 2017!
By: Gary Bleetstein
Partner, Agent Support Group
Last week, we celebrated Independence Day.
Independence is defined in the dictionary as the state or quality of being independent, freedom from the control, influence, support, aid, or the like, of others.
I am not sure if I agree 100% with the definition, however most of it appears valid and true. Sometimes we do need the aid and support of others.
As a free nation, we all have so much to be grateful for, especially our independence. There are many nations where their people have no independence and are controlled by the likes of dictators, autocrats, fascists and totalitarian oppressors.
So how does the word Independence fit into the lives of Life Insurance Advisors.
Most of you are independent to help your clients make great decisions for themselves and for the future of their families and their business’s. You have the independence to choose the best solutions, plans, and products that will fit your client’s long term needs, whether it is for Life Insurance, Annuities, Long Term Care or Disability.
In thinking more about the word Independence, two major items come to mind:
- The new DOL rules and your job as an advisor to give advice to your client’s based on the best interest of the client – I believe this has always been the case.
- The importance of Long Term Care and knowing that your clients who will all want as much independence as possible can achieve it with a good Long Term Care Solution.
Let us all be thankful for our independence as a great nation, as well as our independence to assist our client’s in achieving their goals without undue control or influence of others.
A Legacy That Endures…….
By: Jay Scheiner
Partner, Agent Support Group
Often, as financial advisors and insurance professionals, we get so caught up in the minutia of the products we offer that we lose sight of how our products can be structured to make a difference to our clients and their heirs. Here’s a story and a planning idea that you can discuss with your older successful clients and put a smile on their faces…
My former boss at the broker-dealer I worked at, Lee, was a wise and giving man. Lee was also an astute financial planner blessed with the gift of good timing. After all — like George Steinbrenner — Lee died in 2010, the sunset year of the estate tax, which allowed him to pass-on assets to his children free of federal estate tax. Ever the planner, he left a unique gift to his three daughters, which enables them to remember him in a very special way each May, around the time of his birthday. Every year each daughter receives an insurance company check for approximately $10,000 from their father – a sweet legacy from a man who would have just turned 96 this year. These distributions will continue for at least 20 more years. Lee set up this plan deliberately, reasoning that the impact of an extended bequest would be a legacy that endures vs. a lump-sum that would have faded into a memory. I keep in touch with the daughters and each has commented what a special gift it was that their father created for them.
Agent Support Group can help you set up a similar plan for your clients. New York Life’s annuities are well suited for this. The have the flexibility to carry out your client’s desire to leave funds after they are gone to one, two or more beneficiaries. Just as important, they have strong financial ratings so your clients can feel comfortable making a multi-decade bequest backed by the strength of New York Life. *Note – New York Life is available to our approved producers only.
· Attached (NY Life PDF) is another example of this concept: Grandpa, age 85, purchases a $500,000 income annuity today with income payments to begin just prior to the holidays – December 15th. Each year while alive Grandpa receives $25,995 with most of this coming tax-free. Upon his death his heirs (it can be one or many more than one) will receive the $25,995 payment for the balance of thirty-years – until December 15, 2046! It will be the ultimate Christmas or Hanukah present funding device – and Grandpa will be remembered for this long after he is gone!
To structure a creative annuity legacy plan for your client please contact me or one of my ASG partners or our annuity specialist, David Tornabene email@example.com 212.292.7934.
Wishing you a wonderful Summer 2017! ~Jay
The Sandwich Generation
By Sam Kaufman
Senior Partner, Agent Support Group-May 2017
The Carnegie Delicatessen in New York defined the meaning of a “Sandwich”. Anyone who has been to the Carnegie understands that it was truly a contest to devour an entire sandwich in one sitting. In fact, it was a wonder that so much could be put between two slices of bread making it impossible to fit the entire sandwich in your mouth. For many today their daily life seems to even make the Carnegie Delicatessen sandwich appear to be miniature. Many parents are finding themselves emotionally and financially squeezed between their children and their parents. If you are one of those parents you can easily relate to feeling like the corned beef that was jammed between the two pieces of rye bread at the Carnegie.
Family dynamics need to be included in every advisors discussion with his or her client to determine the multiple financial needs that the new “Sandwich Generation” is facing or dealing with on a currently. Planning for their retirement, many are also dealing with the cost of education for their children and caring for their parents. What happens if the breadwinner who is financially supporting both their immediate family and elders is lost or disabled?
What happens if the “Soccer Mom” is no longer able to run between taking the kids to after school events and providing care for aging family members? If you thought the corned beef sandwich at the Carnegie covered the plate from corner to corner, just think about those who are personally sandwiched stretching themselves both financially and personally.
As advisors we need to be sensitive to these situations while assisting in providing solutions. There is a greater need than ever to focus on the living benefits that can be provided by life insurance. Tax deferred accrual of cash value for retirement, Long Term Care Benefits and a host of new enhancements make life insurance more than simply death protection. These benefits can help the new “Sandwich Generation” plan for themselves while protecting their family both short and long term.
At Agent Support Group we are constantly designing new concepts to assist our advisors. Advisors are welcome to come in and meet to discuss these new concepts and learn how they may be helpful to you in your practices and for your clients. Look at the total picture and provide solutions.