Mark BW-how-to

Wouldn’t it be great to have the key to  the door you’re trying to open?

For years agents have said that they are in the “business market,” but what does that really mean? Are they taking the right approach? Are they truly in that marketplace?

When approaching a business owner, what are you asking? The same questions they have been approached with 100 times before? “Do you have a plan in place if something were to happen to you or one of your partners?” “Do you have a 401(k) ?” “What are you doing for retirement?” “Do you have a succession plan?”

These questions will typically go in one ear and out the other so quickly. Why? Because business owners know it (you) will cost them money, which is not any business owner’s intent. A different approach and conversation starter should be: “When is the last time you had a proper business valuation?” Business valuations  are the cornerstone of beginning the process toward uncovering the answers to the above and many other questions in a way that is not unwelcome. You are coming in under a consultative role, and during that process you will uncover areas of weakness where business owners are exposed to severe tax consequences. Essentially, you are saving them money in the long run. The true sales opportunities will organically come to the surface.

The reality is that most times businesses don’t have a valuation in place, or they simply have a number in mind that has been derived with no real methodology behind it. Without a proper valuation, business owners open themselves—or should we say their heirs—to a host of planning nightmares.

An undervalued business interest can result in huge tax liabilities and/or business succession and continuation issues. In some cases, through strategic alliances, it is possible to provide an initial business valuation without cost to the business owner. It is important to align yourself with firms that can provide access to these platforms. This will significantly increase your value proposition to your current and prospective client base.

By offering this initial no-fee service, it is hard for a qualified prospect to say no. Once this first level of service is provided, a number is generated that is either:

• Exactly what the client thought their business was worth;

• Less than what they thought; or

• Higher than they thought.

Regardless of the outcome, there is a planning opportunity that awaits you. You now have a road map that will lead you to the planning stages and implementation of products to solve a number of planning issues that will likely be uncovered during the process. Plus, from a financial underwriting standpoint, you’ll know exactly what the client will qualify for before you even get to the application stage.

Some of the opportunities that can be uncovered:

 • Buy/Sell Sales. Often there are partners involved in the business setting. Once determined, the conversation ensues about the implementation or review of a current formal agreement.

 • Key Employee Retention. During the process, key employees are identified, as is the effect that the loss of each can potentially have on the business. Strategies can be implemented to protect the business in a number of ways, through death benefit if that person prematurely passes and/or the design of “golden handcuff” type benefits that can be used for retention of that employee. Perhaps a deferred compensation program or an executive bonus Section 162.

 • Succession Planning. You can uncover the need for succession planning to assure the continuation of that business for the next generation. This is a very important element that comes up often during the process.

 • Estate Equalization. Perhaps there is a family business in which only some of the children are involved. The father of two siblings wanted to make sure that both of the children would inherit equal shares in the family business. The problem was that the son had been working with his father over the last five years and had significantly grown the business, while the daughter wanted nothing to do with it. As you can imagine, this could cause a lot of bad blood in the family. In our example, estate equalization sales allow for a life insurance policy to be purchased on the life of the father so that his daughter would receive what amounted to her equal share of the business without causing friction between the two siblings.

 • Personal Financial/Estate Planning. Often the largest asset that a business owner has is the business. Now that you know what it’s worth you can transition toward the personal needs of the individual, including income continuation, estate planning, retirement planning, etc.

This next section will discuss some techniques on how to best utilize living benefits to assist your business clients. Living benefits such as long term care and chronic illness riders are fairly new to the industry. These riders offer unique solutions in this marketplace. There are various ways they can be applied.

Living Benefits in Business Planning

As indicated previously, buy/sell planning, or lack thereof, can be an area that may be exposed as a weakness. Many advisors focus on funding buy/sell agreements with life insurance and stop there. But what if a business partner is incapacitated due to a serious illness or injury? Believe it or not, this can actually have a greater impact on a business than a premature death. Statistically this is more likely to occur, and it is why most disability income policies are so expensive compared to the premiums on those same partners who buy large amounts of term life insurance to fund a buy/sell agreement.

One of the most interesting product innovations has made itself an attractive business planning tool when dealing in this area. Permanent life insurance plans can now be purchased with long term care riders (LTCRs) or chronic illness riders (CIRs). By utilizing these products the life insurance that is often sold to fund a buy/sell agreement can have an LTCR or CIR attached. If one of the covered partners has a serious health event due to illness or injury, the business can accelerate the death benefits via the provisions of these types of riders. The funds can be utilized in a number of ways, including providing lost revenue to the business while the partner is incapacitated or, in extreme examples, as a “disability buy-out.”

The major point is that these products can make it easy to sustain a business through a major event other than death. In order to receive benefits under these types of plans, the insured party must meet certain criteria. In most cases the trigger is either the inability of that person to perform two of six activities of daily living (ADLs) or the diagnosis of a cognitive impairment. There are typically waiting periods associated with these provisions, but keep in mind that we are protecting against catastrophic loss. Shorter term health events would simply not have as great an impact on a business.

From a sales perspective, keep in mind that LTCRs and CIRs are typically available only on permanent products, not term insurance that is more widely used to fun buy/sell agreements. As the clients understand the full circle of benefits provided, this will have a significant impact on compensation as you migrate to more permanent product sales.

The next type of living benefit to focus on is the use of the cash value within permanent life insurance plans and how they can be utilized for supplemental retirement planning. For years they have provided a unique niche to advisors who understand the market. The power of what these products provide is probably more relevant today than it ever has been. It is often overlooked and/or misunderstood. So let’s take a look at the fundamental benefits provided by these plans.

Supplemental Retirement Planning

For years one of the most attractive benefits to a business owner has been the ability to put as much money away for retirement as possible. Unfortunately for most, they are limited in terms of qualified plan contributions. Cash value life insurance is still one of the best ways to supplement their retirement nest eggs.

Regardless of what plan is used—whole life, current assumption universal life or indexed universal life—they all have something in common: tax deferral and ultimate tax-free withdrawals.

Typically there is no limit on premium contributions other than a budget that is affordable to the client. It is up to you as the advisor to maximize the benefits they will be getting by paying close attention to things like modified endowment contract (MEC) limits so the client can take full advantage of a properly structured plan. Permanent life insurance continues to be one of the best time-tested vehicles for a client’s money. Here’s an example of how a typical permanent plan can work to one’s advantage. For this example, we are showing a whole life product and what it may look like:

As you can see, a $20,000 premium payment is being made every year. An initial death benefit of $838,210 is provided. The guaranteed cash value by year 10 is equal to premiums paid and not only keeps pace as the years go by but also exceeds the sum of the premiums.

Dividends are being earned all the while, and the returns are significant enough when compared to an outside investment assuming a net growth of 4 percent each and every year. All things being equal, we show a tax-free income starting at age 65 of $41,244 payable to age 100, or $56,239 payable to age 85.

Most important, the death benefit that started at $838,210 has grown to more than $1.8 million by age 65. If this client died anytime along the way, the corresponding death benefit would be paid to his beneficiary—that’s the “fast-forward” button that people often overlook. Unlike any other retirement vehicle, the money will be there even if the client is not.

That’s a pretty powerful and compelling approach, but unfortunately it is not widely used by most advisors. Surprisingly, when the question “Why don’t you sell this type of product?” was asked, the most common answer was, “I wasn’t aware it could do all that!”

As you have seen, there are many ways a business valuation can uncover sales opportunities. We have taken a glimpse at some of them. The real question is, “How are you approaching business owners, and are you truly in the business market?”

Asking the typical questions that have been asked over and over again is just not as effective as asking “When was the last time you had a proper business valuation?” If you start off with this approach, not only will you open doors but you will also have the key.

Mark D. Milbrod, CLU

Author’s Bio
CLU, is a principal of Agent Support Group, a brokerage general agency located in Edison, NJ. This fall will mark his 30th anniversary in the insurance industry. Milbrod’s real passion is for the brokerage business, where he assists independent producers by showing them how to open doors, seize sales opportunities and realize new revenue sources. Milbrod sees himself as an insurance producer and knows what it is like to walk in producers’ shoes and what it takes to close a sale. He has been a featured speaker at numerous industry events and is the author of the popular blog “Mark’s Barks.” Milbrod also holds the Chartered Life Underwriter designation from The American College. Founded more than 40 years ago, Agent Support Group, a LifeMark Partner Agency, is a leading multi-company life insurance brokerage agency with operations in New York, New Jersey and North Carolina. They serve as a general agent for many of America’s strongest and most competitive insurance companies, offering a broad spectrum of products to suit many life, annuity, long term care and disability income needs. Milbrod can be reached at Agent Support Group, 343 Thornall Street, Suite 660, Edison, NJ 08837. Telephone: 732-917-6081. Email: mark@asglife.com.

As a Principal of a Multi Carrier Life Brokerage General Agency, our advisors and our carriers rely on us to provide what they have been calling “value added” services in order to maintain relationships, build the relationships and build our franchise at the same time. While this is part of what we do in the normal course of business, it is important to note that the term “value added” is used so often by so many people that it is beginning to lose some of its intended meaning.

Of course much of what we do is day to day servicing for our advisors in order to give them the best service, product knowledge, underwriting and compensation that they have been accustomed to for the many years they have been doing business with ASG. While we continue to do these things, our carriers also want and need us to provide these same services to our advisors so that their and our production and profit goals are met each and every year. What company do you know that does not wish to meet these goals, grow with steady profits and maintain reasonable margins while attaining these goals which can seem lofty at some times ?

I can continue for hours speaking to this topic and especially to the term “value added” but really, in the thick of it all, what does this really mean in terms of maintenance, development and growth in our business. The big questions are those that are the most difficult to talk about and to answer- and for this reason, I continue to question the use of the words “value added”.

At each and every meeting we have with advisors, carriers or vendors, we are still asked “What is your value proposition and what are your Value Added Elements of ASG? This is when I think to myself-“OK – what is your value added features that assist us in our Growth and Agency Building Features of the Business? It is not a secret that the Life Insurance Industry as a whole is in the back of the pack in terms of great technology, excellent internet based policy service to both the end customer and the General Agent, innovation in mobile technology, New Business Processing etc. Mind you, I am not picking on the carriers at all, just speaking to the fact that we as an industry need to change our thought process and begin to move as one force towards the greater good of the use of Best Practices in these areas. In having to deal with State and Federal Insurance Law as well as NAIC, and different regulations from NY and 49 other states, our jobs do not allow us the luxury of being what is still being called Value Added Agencies.

So you are asking- what is his point? What is he talking about? Well here it is and here is the ASG Answer – We are not a Value Added Agency, ASG is an Agency that Adds Value to your relationship with us to build your firm, your revenue, your professionalism and your reputation in our great business.

Here are the areas that we have spent money and resources building our firm for a long term future in this business for both you the advisor and for our relationships with our carriers.

  • We re-invest in our firm and infrastructure each and every
  • We are not a lifestyle agency- we use our profits to provide new and innovative technology and employees.
  • We built an interactive Mobile App and Website so that our advisor can have most ASG features in the palm of their
  • We have a formal on-boarding program for all advisors to educate you on our website, mobile app and business
  • We have the best case managers in the business, as well as a complete design team and LTC/DI and Annuity Department for your
  • We have an onsite Board Certified Medical Director to review your cases and when needed to provide summaries for our
  • We hold two major educational meetings each year with nationally recognized
  • We hold Smaller Sales meetings to educate you on the newest products and sales ideas in the
  • We provide IT and Technical Support for now cost for our advisors who need assistance with their own systems
  • We provide free of cost- point of sales assistance when needed for advisor
  • As a member of LifeMark Partners- we provide a large assortment of carriers and underwriting clout for you, Our Advisors -as we are one of the country’s largest providers of life insurance in the
  • We have an in-house expert in Banking and Premium Financing for your special cases as well as two specialists in the Foreign National
  • We provide Brokerage Services that start with submissions and end with not only commissions but superior post issue policy
  • We provide reasonable, competitive and timely compensation for all
  • Most important- we have provided and will continue to provide you, our advisors, these added values plus more to enhance and assure our relationships stay strong and relevant each and every step we take in this

Thank you for your business and may 2015 be an even better year than 2014.

Gary1
Gary Bleetstein, Principal

Sam BW-look-out

A storm is brewing and it is about to hit – with great force and intensity – your policyholders that have older current assumption  universal  life  policies.   The magnitude of the destruction will be greater than even that witnessed by Dorothy and Toto and will need more than a wave of the Good Witch of the North’s wand to save.

Got your attention now? Do not ask where you will be able seek protection, as there will be no shelter to be found as this storm ravages policyholders caught without any warning. Even those policyholders and advisors who tried to prevent this devastating event will be caught in its path as it attacks unsuspecting policyholders.

It’s the increases in the cost of insurance – those non-guaranteed COIs that are internally deducted from the account values to cover the net amount at risk and provide the total desired death benefit. Although most advisors and policyholders were led to believe that COIs would be stable and the reason for their indeterminate structure was to benefit the cost structure while reducing reserve costs for the insurer, that myth is about to end.

Many companies are looking at the COIs in their older current assumption blocks of business and determining that these costs should be increased. Given the fact that most current assumption universal life policies are aged, the policyholders are older – with most being over age 65. The increase in the COIs results in their cash value, now being credited at minimum interest rates versus those projected originally, being cannibalized and hence the policy terminating sooner than expected without substantial additional funding.

Why is this happening? The actual interest rates and mortality assumptions have been poorer than those used in creating the COIs originally projected. Replacement has resulted in a significant proportion of healthy policyholders moving to guaranteed universal life, leaving a pool of insureds with adverse mortality. This same thing has been happening with older dividend paying poli- cies as recognized by the bifurcation of the dividends allocated to older policyholders versus new. However, in current assumption universal life policies the result of the increase in the COIs is more devastating.

Companies are notifying policyholders, but often not their advisors. General Agents and advisors are notified via a general announcement, but not told of the specific polices affected and a general idea of what the effect will be going forward. This leaves us with no alternative but to review internal records and request re-projections based upon the current scheduled premium outlay and the outlay now required to keep the policy in force to maturity. The policyholder receiving the notification that the cost of insurance has been increased has no way of interpreting the increase relative to their policy.

As a Brokerage General Agency we are trying to be pro-active, but in many cases we are working with companies that are no longer active and therefore have no relationship. Many blocks of business have been sold to reinsurance companies who serve strictly as administrators and offer minimal policyholder service, making it difficult to identify situations where COIs have been increased. Those companies that have increased COIs have not been proactive in providing policyholders nor advisors sufficient information to make any required changes. This will  all result in some policyholders finding out their policy is about to lapse at a time when it is most needed.

Insurance departments designated to provide policyholder protection are often not providing mandates or instructions that serve policyholders by protecting their ability to maintain their policies. This all leaves us in an untenable predicament in serving our advisors. We strongly suggest you contact companies with which you have policyholders that purchased current assumption universal life policies pre-2000 and request re-projections that will enable your  client/policyholder to make an educated decision on which they can move forward.

When the dust settles and the storm ends will your clients land safely, as did Dorothy and Toto, knowing the protection intended to protect their families and businesses fulfills its objectives?

You can help assure a happy ending to this story by making certain that your clients are informed and make any adjustments needed to keep their policies from falling into the hands of the Wicked Witch.

Sam1
Sam J. Kaufman, CEO

Author’s Bio

CEO, began his career in the life insurance industry in 1968 after graduating from The University of Miami, and in 1973 founded Agent Support Group (then Agent Support Services), a life insurance brokerage agency. He built ASG into one of the first true multi company agencies in New York. His focus on providing value-added service as well as insisting that ASG become a leader in technology allowed the company to grow to become a powerhouse and one of the largest independent life operations in the Northeast. The pioneer who gave brokers their first computerized sales illustrations (Kaufman was one of the first in New York to even own a computer) has now pioneered the ASG mobile app, allowing life agents the ability to do business anywhere and access the latest information in the palm of their hands. Kaufman has played an important role in product development and marketing and has lectured before the New York chapter of NAIFA and the Society of Financial Service Professionals. He is a member of NAILBA and has won numerous industry and carrier awards, including lifetime achievement recognition. ASG,  a Lifemark Partner Agency, is a leading multi-company life insurance brokerage agency with operations in New York, New Jersey and North Carolina. They serve as a general agent for many of America’s strongest and most competitive insurance companies, offering a broad spectrum of products to suit many life, annuity, long term care and disability income needs. Kaufman can be reached at Agent Support Group, 99 Park Avenue, Suite 1910, New York, NY 10016. Telephone: 212-292-5760. Email: sam@asglife.com.

Jay BW logo-selling-permanent

“If you can’t sell permanent insurance in this low interest environment then you should seriously consider changing your profession!”

Ok – that may be too strong a statement and no one really wants you to resign from your practice, but we often forget how lucky we are to be in an industry with products that are so compelling – offering solid cash values – plus tax-favored accumulation and income-tax-free death benefits!

As just one example, I have attached an illustration showing a $25,000 annual payment into a 10- pay whole life contract to compare it with the yields of some other types of investments. Please note that we can achieve similar results with several other whole life and even over-funded UL policies, especially those stressing high early cash values.

US Treasury yields as of 8/2015: 5-yr 1.69 / 10-yr 2.33 / 20-yr 2.73 / 30-yr 3.03*
*US Dept of the treasury resource center

It would take 30 years for your money to double at the 2.33% rate of the 10-yr treasury bond!**
AAA Municipal Bond yields as of 8/2015: 5-yr 1.32 / 10-yr 2.35 / 20-yr 3.39 / 30-yr N/A

It would take 30 years for your money to double at the 2.35% rate of a 10-yr AAA Muni.**
AA Corporate Bond yields as of 8/2015: 5-yr 2.25 / 10-yr 3.32 / 20-yr 4.10

It would take 21 years for your money to double at the 3.32% rate of a 10-yr AA Corporate Bond.**
**Assuming interest reinvested at the same rate / Taxes not taken into consideration for this comparison

Now let’s see how a 10-pay whole life contract looks with respect to cash accumulations (complete illustration attached):

Alternative #1 – 10-pay Whole Life Insurance
Metlife Promise Select-10 – Contractual 10-pay life / assuming a Male 45 Elite health – Premiums
$25,000/yr
Rate of return of cash value including dividends
Year 5 – -7.08% / Year 10 2.48% / Year 15 3.98% / Year 20 4.45% / Year 25 4.65%
Your client pays $250,000 over 10-years and his money doubles in just over 20-years at age 65!

Don’t forget the insurance benefit! Year 1 – $612,420 / Year 10 $713,462 / Year 15 $809,876 / Year 20 $918,570 (age 65)!

Conclusion: So pick up the phone today and talk to your ASG brokerage professionals about helping your clients build equity through one of the many high cash value policies ASG offers! ~JS

Jay1
Jay L. Scheiner, Principal

Author’s Bio
JD, CLU, lives in Long Island, NY. For the past 20 years, he has been a partner at Agent Support Group, a life insurance brokerage agency based in New York City. An avid fan of the outdoors, Scheiner enjoys boating and bicycling – in addition to hiking. Scheiner can be reached by telephone at 516-467-1190 or email at jay@asglife.com.

Jay BW logo-climbing

jay-kil-1-1Ernest Hemingway writes in the introduction to The Snows of Kilimanjaro: “Kilimanjaro is a snow covered mountain 19,710 feet high, and is said to be the highest mountain in Africa. Its western summit is called Masai, the House of God. Close to the western summit there is a dried and frozen carcass of a leopard. No one has explained what the leopard was seeking at that altitude.”

Like the leopard, I, too, was searching for something unknown on Kilimanjaro. When I announced to my wife and daughters that I was planning to climb Mount Kilimanjaro, they thought I was nuts. After seeing a Kilimanjaro video, their position moderated to just, “Please don’t do it.” Eventually my wife agreed that as long as I trained sufficiently, chose the trekking company with the best safety record and made two promises to her, I could go. The first promise was that I would do everything in my power to “not die” on Kilimanjaro. The second promise was to climb only as high as I could safely go – even if that meant descending down the mountain without reaching the summit.

I made these promises freely, feeling confident they would be easy to keep. In reality, I came very close to breaking both of them.

It is just before sunrise on August 13, 2011. We are making the final push to the top of the crater rim of Mount Kilimanjaro in Tanzania. Although we are near the Equator, the weather is brutally cold, so cold that my water is frozen and I cannot feel my fingers. Thankfully, the night is almost over. The moon is full and millions of stars seem to be following us as we climb in single file behind our guide, Tobias. As the hours crawl by, the torch beam of my headlamp is focusing on the boots of Sarah, the climber just ahead of me. Looking up, I see the Rebmann Glacier, a silver overhanging piece of the ancient ice cap that crowns the square top of Kilimanjaro. High above is the rim of the great volcano itself – closer now—but still beyond reach. A chill creeps through each layer of clothes and begs every part of me to cry out. The temperature is minus 20 Celsius (minus 4  Fahrenheit).

Almost forgetting the reason for coming, I am tempted to end it and ask a guide to lead me back down the mountain. Then I remember what it took to get to Africa and thought back to a time, three years earlier, when illness was getting the better of me and I promised myself that upon recovery I would do something important, just for me. With the singular clarity of Hemingway’s leopard, I am reminded of the reason I had come and why I have to push on.

In 2008 I was 49 and faced both prostate cancer and a heart condition. The cancer was diagnosed early and I decided to treat it aggressively with radical prostatectomy. Just after recovery from jay-kil-2-1surgery, I developed a rapid and irregular heart rhythm called atrial fibrillation. As with the cancer, I chose the most invasive approach, but the one with the best chance of full recovery. In December I underwent a five hour surgical procedure to cauterize (burn) the sections of my heart causing the abnormal rhythm, thereby eliminating the atrial fibrillation. Thus, 2008 was a year that could have turned me into an old, sick man. Instead, I had overcome two potentially debilitating illnesses and could begin to dream again.

I wanted and needed an adventure, something to test myself, something significant. It was hard for me to shake the underlying fear that I was not done with the illnesses, but merely between them. If another medical incident occurred, the door could close and my one chance would be lost. Searching for the dream, I looked into my past and saw things I could no longer realistically accomplish for a variety of reasons. Before marrying my wife and starting our family, I took a long, solo voyage in a small sailboat and hoped in my lifetime to sail alone to Bermuda or beyond. Such a voyage now would be out of the question due   to the unacceptable level of risk it involved. I also dreamed of bicycling 3,500 miles coast to coast, but this would be too time consuming; I could not be away from my insurance practice for more than a few weeks at a time.

The goal of climbing Kilimanjaro arose at my three-year post surgery cancer check-up as my surgeon described his trek up Africa’s highest mountain. The seed was planted; I was hooked and there was no turning back. Half a year of intensive training followed, which included daily two-hour workouts, thousands of stairs climbed, long city miles walked and timed, hills run up and trainers obeyed. I hiked parts of the Appalachian Trail on weekends with Outdoor Bound and hired a nutritionist to help turn fat into muscle, dropping additional weight; all culminating in my trip to Africa to attempt to scale the great mountain. By the time I landed in Tanzania, I felt as though my entire life was leading up to this moment. These memories motivated me to keep pushing on.

Back on the mountain, we continue to move in silence. Our climbing party includes Larry, an American living in Nigeria; Wendy, an airline pilot; and Sarah, an attorney. We had never met before the climb. Of the four of us, I am the only one without high altitude climbing experience and, not surprisingly, am having trouble at this extreme altitude. In five days we had climbed through a dense rain forest, over Heathland and Moorland, used our hands and feet to scramble up an 800 foot volcanic rock face called The Great Barranco Wall and through a high alpine desert. At this point we are scaling the scree (a combination of shale and gravel) toward the icecap on the way to the summit. Twelve hours earlier, during our final meal before starting out on the all-night summit attempt, I admitted I would willingly lose a finger, a toe, or a few of each, in exchange for making it to the top of Mount Kilimanjaro. With that, I was on my way to breaking my second promise.

We began this sixth day of hiking at midnight. Each of us having donned every layer of clothing in our arsenal. I had multiple layers on top and bottom including: hats, face mask – even three pairs of socks.

jay-kil-4-1Our guides were carrying the safety equipment, including large tanks of oxygen and masks for each climber. A rescue porter carries a portable altitude chamber called a Gamow bag and folding stretcher. In all, each guide is burdened with 75 pounds of gear. At this stage of the climb, I had merely to lug my own 52-year-old, 5’10”, 205-pound butt 4,000 feet up to the top of the mountain. To put the trek to the summit in perspective, journalist John Reader describes: “It is equivalent to clambering up the side of nine Empire State Buildings laid end to end at about sixteen degrees. Yet, at 4,710 meters (15,452 feet) there is little more than half the density of oxygen which occurs on Manhattan or at the foot of most staircases. So in effect, the aspiring climber attempts the equivalent of those feats with the equivalent of only one lung.”

Throughout the preceding days, as we climbed to ever higher altitudes, our bodies worked to acclimatize to the decreasing amount of oxygen pressure. Failure to acclimatize could result in acute mountain sickness (AMS). The intensity and severity of AMS symptoms can vary, but can quickly become extremely serious and, although rare, prove fatal. Of those who attempt the climb each year, more than 1,000 are evacuated from the mountain and approximately 10 deaths are reported – mainly due to AMS.

Despite these risks, Mount Kilimanjaro is sometimes called “everyman’s Everest,” because it is the most achievable of the Seven Summits (the highest mountains on each of the world’s seven jay-kil-5-1continents). No technical climbing skills or mountaineering equipment such as ice axes and ropes are required. While thou- sands of people climb the peak successfully, the mountain is often underestimated. Fewer than half of those who begin the trek up Kilimanjaro reach the top of the mountain due to the debilitating headaches and nausea from altitude sickness, or physical maladies ranging from blisters to fever or an infection from water borne organisms. Sometimes failing to reach the summit is a simple lack of will on the climber’s part.

As we climb through the night, we pass many hikers on their way down – some dragged down due to the effects of AMS. The sight and smells of the remnants of their illnesses line our path up the mountain. Looking up toward the top of the crater rim called Stella Point, I feel that I cannot go on any longer. The positive thoughts that helped me put one foot in front of the other for so many hours have vanished because breathing takes so much energy. Several hours and a thousand feet remain to climb. Having already asked my guides to stop for me several times, how can I ask again?

And then there is the secret I am keeping from my guides and climbing partners. For the past three nights I have not slept at all. Alone at night in my tent, working to breathe and nursing a deep, persistent cough, I am fearful that if I fall asleep I will not wake up. My resting pulse rate on the upper mountain is more than 100; although my heartbeat is regular, I fear a return of the atrial fibrillation high on the mountain. If the guides learn the extent of my insomnia, they will surely make me descend the mountain, ending my climb. Sleeplessness is my demon; I spend the nights praying for morning to come.

jay-kil-10-1As the sun makes its slow rise over Mawenzi, Kilimanjaro’s eastern summit, the scree forces us to slip back and dig our poles into the earth, pulling up with every step in order to advance. A howling wind picks up and, with it, the top soil of the slope becomes airborne. I take out my goggles, but it’s too late. Gritty dust gets in both eyes, stinging and temporarily blinding me. I can’t give up, I must get to the top of this mountain, which is so close now. We reach the top of the volcano at 7:30 am – but this is not the true summit.

Now we must hike from Stella Point around the crater rim to the summit – Uhuru (Freedom) Peak, which could take another hour. The going is painfully slow; but thankfully, with an elevation gain of 500 feet, not as steep. I can barely see due to the sand in my eyes. For a time, I follow Tobias, fixing my gaze on a red string hanging from his backpack to guide my way. Above the clouds the landscape looks unworldly. Breathless, we trudge around the volcano, passing other climbers who successfully reached the summit and are now on their way down.

The summit is capped by a primitive, hand-carved wooden sign proclaiming “Congratulations you are now at Uhuru Peak Tanzania 5895 M. AMSL.” We can see it long before we arrive. For me, there’s no more air to breathe, and I am parched, but my water is still frozen. The thought occurs to me to puncture my arm and attach a straw to quench my thirst; then I realize I’m not thinking clearly.

We hike up to the sign and arrive at the mountain’s summit. It’s 8:30 am and after climbing throughout another sleepless night the experience is quite literally breathtaking. I cannot believe I am standing on the summit of Mount Kilimanjaro!

We wait to be photographed at the most famous marker in Africa. A German group is ahead of us – shooting every possible angle to document their journey. Then it’s our turn. Amazingly, even at jay-kil-12-119,340 feet, in the purest, cleanest air in Africa, graffiti litters the sign. Stickers advertise Fila and radio stations; one proclaims Nick’s famous roast beef restaurant. All are slapped on this sacred sign by those wishing to capitalize on their achievement, marring the beauty that is Kilimanjaro’s summit.

Mount Kilimanjaro is a geographical wonder. Rising majestically from the Tanzanian plains near Kenya, it can be seen from 95 miles away. It remains one of the world’s largest volcanoes and is technically not extinct. Kilimanjaro was first documented by the ancient world when the Egyptian geographer Ptolemy recorded a great snow mountain in the second century AD. In 1849 a German missionary reported seeing a snow-capped mountain at the Equator, but was ridiculed by the Royal Geographical Society – believing snow near the Equator to be an impossibility.

After our summit pictures we sit by the sign. My head spins and my breathing is labored. We stay too long in the thin air. Now it’s time to trek back around the crater rim and head down the mountain – which we do – although I have almost no memory of this. At 9:30 am we reach the point where we descend steeply. It is then that I physically implode; it feels as though someone with a baseball bat is whacking me repeatedly on the back of the head I sit down – or fall down – and stay there.

jay-kil-15-1Tobias takes out his medical kit and measures my blood oxygen saturation with a pulse oximeter. It reads 58 percent; a normal reading is above 90 percent. A reduction in blood oxygen (hypoxia) can become life-threatening. I feel disoriented, so another guide sets up his oxygen tank, affixes the plastic tubing and puts it around my neck. I breathe like the first breath after being born. I have early symptoms of high altitude cerebral edema – swelling of the brain due to AMS. The guide gives me Decadron, a powerful steroid used to reduce inflammation of the brain. I take it and breathe more oxygen. After 20 minutes I am stable enough to continue. My climbing partners patiently wait while I receive treatment. Since the sun has been up for several hours, the air finally warms enough for our water to de-ice. We are at 18,900 feet, still 6,500 feet above a helicopter rescue possibility. In obvious peril, I realize I will have to walk many hours down this steep mountain from now until dusk. We begin without delay.

Ascending the mountain consisted of back and forth trails called switchbacks – to lessen the effect of the steep terrain. Descending is literally straight down. I’m determined to descend under my own power. A guide, aided by the porter who carries my backpack, steadies me as we head down the side of the volcano. The only cure for my sickness is a quick descent to lower altitude. Despite the trekking poles I use to keep me upright, I fall frequently. For hours we stumble down the pebbly scree toward Barafu (Ice) camp at 15,000 feet. It seems to take a lifetime.

We finally arrive in the early afternoon. Waiting for us is a lunch of soup and rice with butter and bread prepared by the porters who awaited our return. I breathe more bottled oxygen, take more jay-kil-16-1steroid pills, and am told to take a brief nap. Head still pounding, I fight the need for sleep and choose instead to stay awake – convinced that I cannot safely sleep at 15,000 feet with symptoms of brain swelling. I recall the promise I made to return safely. The medicine and oxygen must be working because I am feeling some relief now. We decide to continue down toward our planned destination of Mweka Camp – at 10,400 feet – a four-hour hike from Barafu. As we descend, the terrain becomes more earthly. We see lush, beautiful vegetation found nowhere else in the world and running streams. The air fills with increasing amounts of oxygen. We pass Millennium Camp with its helicopter landing field and continue down the mountain. Time and miles pass by and the pounding in my head subsides. I become more alive with each passing hour. It is dusk when we reach Mweka Camp, after hiking for 18 hours, including the brief stop at Barafu. I send a text to my wife  Carol to let her know I am safe.

That night I sleep in my tent like a child without a worry in the world. Although spent and exhausted, symptoms of illness have disappeared.

jay-kil-17-1In the morning, our porters and guides who had cared for us over the past week, serenade us with African songs. We shake hands and thank them using the few Swahili words and phrases we had learned over the past seven days on Mount Kilimanjaro. Together, we descend to the base of the mountain.

When I consider how easily my experience could have had a different outcome, I shudder. Every aspect of the climb was more difficult than I had envisioned. Like Hemingway’s leopard, I was driven to climb to a dangerous altitude. But unlike the leopard, I knew both why I was driven to climb the mountain and the reason I had to return home. In my promise to descend if I became sick, I did not count on pushing myself so hard to get to the top, leaving absolutely nothing for the return trip down. However, I was comforted in knowing that there were those at home – family and friends – who helped will me up the mountain, giving me strength during the endless nights and praying for my safety. The new friends and guides with whom I was climbing understood how to help when things went wrong. I learned that I was not alone.

jay-kil-18-1Looking back on the adventure of my lifetime, I wonder how in the world I got through each day, let alone stood at the summit of Mount Kilimanjaro.

Jay Scheiner, JD, CLU

Author’s Bio

Jay lives in Long Island, NY. For the past 20 years, he has been a partner at Agent Support Group, a life insurance brokerage agency based in New York City, which is a member of LifeMark Partners. An avid fan of the outdoors, Scheiner enjoys boating and bicycling—in addition to hiking. He can be reached by telephone at 516-467-1190 or email at jay@asglife.com.

Sam BW-the-life

In many sales situations, life insurance advisors find themselves not only advising clients about design and implementation but also playing the role of a psychologist. This particularly holds true when working with family-owned businesses and multiple siblings and/or families.

Just this week I met with three brothers ranging in age from 52 to 57. These gentlemen started a now successful business thirty years ago that has grown to have a value in excess of $10 million. That was the good news.

The bad news was that they never had a buy/sell agreement, nor had they focused on succession planning. Each principal had two children, but only two of the children were in the business, with the remainder not intending to enter the business. This is not atypical for family-owned businesses, and as the second and third generations enter into the business the number of family members involved expands and planning becomes more difficult.

This is the point at which you must take off your cap as a life insurance advisor and don a new cap as a “family psychologist.” Most advisors have been in these situations previously and can offer solutions and recommendations from prior experiences that can be useful to those who are trying to resolve these matters. This enables the advisor to bring important “value added” advice to his client and, by doing so, to strengthen the relationship. The ultimate success is when the client recognizes that the advisor is not there solely for the pur- pose of making the sale.

My clients, not unlike others, were so busy building their business – doing everything from paying bills to taking out the garbage – that they never focused on the value of what they had built. The business now had forty employees and provided each principal with an income in excess of $500,000 annually. The business represented the primary asset of each of the three brothers. There was likely no estate tax issue, as each brother was under the threshold for estate taxes.

The classic need in this situation was primarily to create immediate liquidity. The business had been actively pursued by entities trying to roll up similar businesses. It was easy to recognize that the death of  a principal would create an opportunity for an outside entity to take advantage of a distress sale if liquidity was needed as a result of the death of one of the brothers. Each brother did have one common goalkeeping he business in the family – and recognized the problem that could evolve as a result of a distress sale.

There were many issues that required attention:

    • One brother had his son in the business, while his daughter had no intention of entering the
    • A second brother had a daughter in the business, but she was not in a management position and her long term continuation was His son had chosen another profession.
    • The third brother had no children intending to enter the business, but wanted to be certain his family received adequate remuneration for his
    • All of the brothers recognized the fact that they did not want the spouse of a deceased brother participating in the business.

Funding the stock purchase program was fairly straightforward. The brother having no children would sell his interest to each son of his two brothers equally. This would leave the two surviving brothers still in control of the business, with 66.6 percent. However, this brother’s wife wanted his children who were not in the business to also receive something equitable, while recognizing  that  she  would ultimately pass on her residual estate to her children if she outlived her husband. This was not an unusual request and could easily be addressed outside the buy/sell  funding.

The brother having a son in the business had an issue with respect to his brother’s daughter who was unlikely to stay in the business for a long period. There was a need to protect the daughter financially, albeit not have her participate in the future ownership of the business. This was addressed in a similar manner to the above situation by providing a policy to protect the one brother’s daughter not attached to the buy/sell. There was some additional balancing to provide for those children not involved in the business.

Sharing our knowledge from prior experiences is a valuable asset. As advisors we often forget to draw on these experiences when working with a client. These experiences help us create a picture for the next client – an illustration we can bring to the table. When the client understands how life insurance fits into this picture, completing the story, you will have succeeded.

Sam J. Kaufman, CEO

Author’s Bio

CEO, began his career in the life insurance industry in 1968 after graduating from The University of Miami, and in 1973 founded Agent Support Group (then Agent Support Services), a life insurance brokerage agency. He built ASG into one of the first true multi company agencies in New York. His focus on providing value-added service as well as insisting that ASG become a leader in technology allowed the company to grow to become a powerhouse and one of the largest independent life operations in the Northeast. The pioneer who gave brokers their first computerized sales illustrations (Kaufman was one of the first in New York to even own a computer) has now pioneered the ASG mobile app, allowing life agents the ability to do business anywhere and access the latest information in the palm of their hands. Kaufman has played an important role in product development and marketing and has lectured before the New York chapter of NAIFA and the Society of Financial Service Professionals. He is a member of NAILBA and has won numerous industry and carrier awards, including lifetime achievement recognition. ASG,  a Lifemark Partner Agency, is a leading multi-company life insurance brokerage agency with operations in New York, New Jersey and North Carolina. They serve as a general agent for many of America’s strongest and most competitive insurance companies, offering a broad spectrum of products to suit many life, annuity, long term care and disability income needs. Kaufman can be reached at Agent Support Group, 99 Park Avenue, Suite 1910, New York, NY 10016. Telephone: 212-292-5760. Email: sam@asglife.com.

Unfortunately, some advisors hear this from our agency or other BGA’s on a too frequent basis, and after some research and data mining, we have determined the reasons that most of cases do get a postponement.

Believe it or not, most of it is as a result of lack of good solid information that should have been submitted in the early stages of the case in order to give the underwriters a sense of comfort, especially on a complicated or large case.

We have found that over 88% of postponements are a result of lack of good, third party financial information, inaccurate financial information, lack of candor during an inspection report and most important, a very good and detailed cover letter that should have been submitted by the advisor at the time the app was submitted.

While we try our best as a BGA to assist our advisors in this area, it is always better for a cover letter to come directly from the client’s advisor.

Here are our recommendations of what to include in the cover letter and package when submitting a case. The cover letter should always mention the name, dob, tin, etc. of the insured and owner.

Here are the details that should be included in each cover letter:

  • Occupation of insured and relationship to owner
  • Ownership – how was this established
  • Beneficiary –relationship
  • Insured income- earned and unearned as well as net worth
  • Negative financial implications of the case
  • Health of the insured – details
  • Insurance inforce and will any be replaced?
  • Total line of insurance?
  • Hobby’s and Avocations?
  • Travel and Residence that may affect the outcome of the application
  • Family History and Smoking History
  • For Personal Insurance – Third Party Balance Sheet and Income Statement
  • For Business Insurance- Third Party Balance Sheet, Income Statements and other information on business
  • Public Information on the insured

I believe that if you follow this outline and submit cover letter’s to us with your cases, not only will the underwriting process be smoother but you should also see better and faster results on the approval of your cases with ASG.

Gary1
Gary Bleetstein, Principal

Mobile Apps For Advisors

Gary BW-mobile-apps-1

When I first started in the life insurance business, my manager handed me a yellow rate book that listed whole life and term premiums by age, one—maybe two—underwriting classifications, and cash values for year 20 and age 65.

“This,” he said, “is your tool to success, and it will give you all the information you need.” After a few weeks of basic training, I would sit in a room with 25 other young recruits and call prospects from lists that were provided by the company. Sounds a lot like Glengarry Glen Ross, doesn’t it!

A few years later, in the late 1970s, my first interaction with technology in the business was life illustrations from the home office – a process that took about three days after I completed and submitted a two-page information sheet with carbon paper.

Looking back, I am amazed that I was able to make a living! As the years progressed, so did technology. It quickly became increasingly important to clients, carriers and all of us out on the street selling life insurance.

Every segment of our lives has been affected by technology; we started with eight-track players and progressed through audio cassettes, CDs and DVDs to video streaming. We lived through the Lanier word processor and then computers arrived – remember the AS400 and the Commodore 64. When the first box phones came out, we all felt like we were in an episode of “Get Smart” or “James Bond.” Some in the industry are too young to remember the days before photocopy machines, but today we have a combination of fax, photocopy and printer all in one device!

Once technology caught on, carriers needed to upgrade to more sophisticated policy service, marketing and accounting processing methods which were supposed to make our jobs not only easier but faster. And technology did make our lives easier in some areas – but more difficult in others. Today clients expect faster and better service – they do not want to wait for the mail, they want everything yesterday via fax, email or overnight delivery.

As an advisor and life insurance agent, the question you need to be asking yourself is: How will new technology enhance my business?

Currently, many brokerage agencies offer websites; downloadable forms; term quote engines; and access to case status, underwriting and product information. But will sitting in your office with all these tools help your business? No! You still have to get out for a face-to-face consultation with your clients.

Today there is the E-App, E-Delivery, E-Signature, Check 21 processing and many other items that begin with an E. With these applications come several questions: Will a direct link to an internet-based application really help build my business, or will it only confuse my clients? Will delivery of a policy via PDF cause me more or less work, and how will my clients like it? Will I be able to submit a $20 million application over the internet when I am not even with my client? The answer to all of these questions should be: Yes, technology and a mobile app can enhance your practice.

Here’s how: Let’s say that you have just finished a round of golf with some friends. At cocktail time, one of them asks you: “How much do you think $10 million of term insurance would cost me with my health conditions?” With your iPhone and mobile app you can quickly give him a simple answer and make the sale!

Communication between advisors, BGAs, clients and carriers has become one of the most important aspects of our business, and the introduction of the smartphone and tablets has enabled us to keep in touch anytime and anywhere. Enhancing this level of communication available to us today is access to a user-friendly mobile app specifically built for the purpose of education, communication, and providing important information to you, the advisor, in order to provide enough information so that a sale can be made.

The most important feature of an advisor-friendly life insurance app is that it is a communication device that has enough information, but not too much. It needs to be easy to use, easy to navigate, and easy for a BGA providing the app to their advisors to educate them in how to use it.

Conclusion and Summary

Yes, technology is moving faster than  all of us and we need to keep up with it as much as we possibly can, while at the same time continuing to write business, contain cost, retain relationships and maintain everything that goes with being an advocate for life insurance clients.

Here are my recommendations, and I know that if you follow these practices you will be even more successful in your practice, enhance your relationships and build some new, vitally important relationships.

The questions to ask about technology are:

  • Am I working with a BGA who can help me in the area of technology and use of a mobile app?
  • Do I know enough about technology?
  • Do I  have  the  tools  necessary to make this new technology work for me to enhance my business?
  • Does my staff know enough about the new technology, and can they adapt to it?
  • Will using a BGA mobile app help me make more sales and communicate better with my BGA and clients?

The steps to take in order to achieve the goal of enhancing your practice with technology are:

  • Become educated in technology and the terminology used in the new
  • Read as much as you can about new hardware, software and technology for your practice in general.
  • Leverage your knowledge about technology with your staff and your
  • Work with a BGA that is a leader in technology – to not only enhance your time management, but also to enhance your bottom line and make more

Working with a BGA who can provide you with leading technology – which needs to include a mobile app – will be a game changer for you and your entire organization.

Gary Bleetstein, Principal

Author’s Bio
Gary has more than 30 years of experience in the BGA marketplace and is a principal of Agent Support Group — a multi-office LifeMark Partner agency located in New York and New Jersey. He is a past board member of NAILBA, and presently co-chair of AALU’s brokerage task force, a member of the Forum 400, and New York City Life Underwriters. Bleetstein can be reached at Agent Support Group, 99 Park Avenue, Suite 100, New York, NY 10016. Telephone: 212-292-5765. Email: gary@asglife.com.

BW logo-asg-celebrates

Agent Support Group (ASG), a Life-Mark Partner Agency and one of the largest brokerage general agencies in the country, hosted an open house to christen their fourth and newest office. ASG has offices in New York City, Manhasset and Westchester, NY, and now Edison, NJ. The New Jersey office is operated by new ASG Principal Markm Milbrod, CLU, and Michael Inserra. Milbrod joins founder and CEO Sam Kaufman, Jay Scheiner and Gary Bleetstein as principals of ASG.

The April 30 open house drew more than 75 brokers, advisors and management representatives from Prudential, John Hancock, Protective, MetLife, American General, AXA, Lincoln Financial, Principal, Transamerica, Legal & General America, and Zurich Life. Joining the ASG principals in hosting the event were staffers Louise Lombardi, Linda Powell, Saad Yaseen, Jennifer Cannella, David Tornabene and Jane Nobiletti.

Gary Bleetstein summarized the event in stating: “This was a great success and a tribute to Mark Milbrod. It allowed our carriers to see for themselves the great relationships Mark has with his brokers and advisors.”
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