by: Mark D. Milbrod, CLU
June 2018

 

If you are looking for a way to keep up production for the summer months, one of the best ways to do that is to not forget good old fashioned Policy Reviews.  Whether you are talking to existing clients or trying to find some new prospective clients, always ask to review their current coverages.

One of the easiest approaches is to ask a client is they have any inforce insurance policies.  If they do, you know one thing already…THEY ARE ALREADY BUYERS!  People will typically refinance a mortgage; review their auto or homeowners policies on a regular basis.  This is typically done in an effort to save money.   When performing a policy audit/review, you may be able to save a client premium dollars but more importantly, you can introduce some of the newer types of life insurance plans that have some additional more attractive features that may not been available when they first purchased their insurance.

This may sound simplistic but most advisors have been overlooking the opportunities that exist.  Here are some key points to consider:

 Health Changes

When trying to review life insurance policies, it is important to keep in mind that health changes can make the largest impact for your clients or prospective clients.   One of the most common changes can be someone’s smoker status. We come across so many policies that were purchased when insureds were smokers.  Keep in mind that if someone has not smoked for only one year, you can start introducing non-smoker rates.  This makes a huge impact on premiums.  Additionally, look out for cigar and alternative tobacco users that have current policies rated for smoking that can also be considered as non-smokers.   Other impairments such as cardiac or cancer histories can be considered as Standard or better rates once time has elapsed on previously rating cases.

Rescue Underwater or Underperforming Contracts

There are older Current Assumption or Variable Life contracts that are either under water or have limited guarantees compared to newer fully guaranteed contracts.   There are also opportunities with older policies with cash value that can be transferred via 1035 Exchanges.  In any of these situations, you can improve a client’s position with either greater guarantees or lower out-of-pocket outlays.

Needs Change

Let’s not forget that needs change over time.  Perhaps there was a need for life insurance that was earmarked for a specific need that no longer exists.   Clients may need to “downsize” their insurance as those needs change or repurpose them into other, newly formed needs such as Long Term Care protection.  Taking advantage of 1035 Exchanges can be a valuable tool in these situations as well.

Obviously, there are many situations where a Policy Review can be beneficial to a client.  As simple as this sounds, many advisors overlook this.  As we enter into the summer months, consider this as great way to stay busy and generate substantial opportunities during a time that is typically slow for most.

So don’t forget…

To Review or Not to Review…That is the question!

 

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-June, 2018 ASG Insight

 

 

 

When talking to a client about their life insurance needs, have you ever considered an approach that contains a “Complete Life Insurance Portfolio?”

There are many different types of life insurance products and no one product can accomplish all of the planning needs for a particular client(s).  So it is best to know and understand all of the product offerings that are available.   By understanding all of the different products and combing the best of all worlds, multiple needs are addressed within this “Portfolio of Products.”

Here are some of the different types of products and the main objectives of each:

Whole Life (Limited Pay) – Whole Life products are typically used to provide a minimal amount of death benefit and build the most amount of cash for the purpose of withdrawing tax-free income at some point in the future.   The majority of the cash value is reliant on non-guaranteed dividend payments.  This is the most expensive way to purchase life insurance on a per/1,000 basis.  If all of the available premium dollars are used for Whole Life, you run the risk of being under insured.

Term Life – as you know, term insurance is used to provide a large amount of death benefit for the lowest amount of premium.  This is a great way of providing the needed amounts of death benefit to cover temporary, short term needs for things like income replacement, mortgage protection, etc.

Guaranteed Universal Life – a great hybrid approach to providing permanent protection with a cost somewhere between Term & Whole Life premiums.   There are typically very little or no cash values associated with these types of products.  The attraction is the guaranteed premium structures and permanency of the death benefit.  These are most widely used for Estate Planning purposes.

Current Assumption Universal Life or Indexed Universal Life – these plans also offer a hybrid approach to pricing for death benefits and provide permanent protection.  They are designed to build cash values and give a large degree of premium flexibility compared to Whole Life, which offers very limited premium flexibility.   Similar to Whole Life plans, these policies can also be used to build cash value and  provide tax free income.  The values are usually based on either a fixed interest rate (that can be guaranteed) or on a non-guaranteed market index, such as the S&P 500.

As evidenced above, there are so many different products to choose from to address a multitude of planning needs.  In addition to the base products listed, there are also a number of additional features and benefits that can be added to some of these products.   They include, but are not limited to, Long Term Care & Chronic Illness Riders,   Guaranteed Income Triggers, Longevity Protection and Uncapped LTC Benefits.  These additions can appeal to a wind range of needs that cannot be addressed by some of the individual products listed.

By using a combination of the different products, features and/or riders, you can make better use of premium dollars and provide an iron clad “Life Insurance Portfolio” that will address a wide range of needs.  This diverse approach will undoubtedly increase your creditability and differentiate you from potential competition.

Contact your ASG representative to see how you can combine the different product designs for your client’s needs.

Leaving a Legacy

by: Mark D. Milbrod, CLU
Partner, Agent Support Group-March 2018

“A society grows great when old men plant trees whose shade they know they shall never sit in.” – Greek Proverb

As you are reading this today, there has been a large shift in the markets that we cater to. The 2017 Tax Cuts and Jobs Act was one of the largest changes to the tax code that we have experienced in a very long time. It has changed the attitudes of our prospective “buying” clients and has set the stage for different conversations.

The general public thinks that “Estate Planning” is something that was only for the rich and wealthy. That couldn’t be farther from the truth. In fact, everyone needs to do Estate Planning. If you own something, you need to have a plan. In its simplest form, an estate plan provides a road map to who gets your “stuff,” when they get it, who handles it and most importantly, sees to it that it gets where it needs to be in accordance with your wishes.

Of course there are many legal instruments that can be used to direct assets to the proper parties, such as Wills & Trusts. The bottom line is to make sure that assets get to where you want them to be. The opening part of this post shows a Greek Proverb that I came across some time ago and the words are very fitting as it relates to Estate Planning and Leaving a Legacy.

Through the planning process, and as a compliment to those legal documents, there are many things that can be done with the products and services that we provide to assure a lasting, meaningful legacy to the ones we care about the most. Here are just a few examples:

Parents Legacy to Children/Grandchildren:
It is often overlooked that annual gifts (measured by small annual premium payments), can leave large leveraged face amounts to children and grandchildren. Take a look below at a chart showing the power of leveraging those small annual premium payments. Using a $250,000 Survivorship Life GUL, the buying power is very strong. It is 100% guaranteed with no market risk.

Grandparents On-Going Gift:
By purchasing a life insurance policy on the life of a grandchild, they can provide a lifelong source of income that can be used as a vehicle to take money out during defining moments in that child’s life such as funds for college, a marriage or the purchase of a new home.

Also, an annuity can be purchased today that can be designed to release funds every year for the life of the grandchild. This kind of transaction has psychological implications. Long after the grandparent passes, each and every year monies are received and they will always be remembered.

Concentrated Stock Positions:
Sometimes we run into a situation where a client has a large concentrated stock position. We then ask what the ultimate goal is. Most times, it will be left to heirs.

In these situations, it may be advisable to liquidate that stock, take the net proceeds and procure a Guaranteed Life Insurance contract in its place. By implementing this strategy, we take out the market/timing risk component and can provide significantly higher tax-free distributions to heirs upon death, which significantly increases their legacy via the leveraging position of the life insurance.

Leaving a Charitable Legacy:
In cases where a client is charitably inclined, don’t forget the value of leaving a charitable legacy. The same rules apply to the leveraging component. Through life insurance proceeds, large amounts of assets can be left to causes that are near and dear to people and through that, they live on.

As an example, in a local township, a large amount of life insurance proceeds were left to a youth baseball league upon the death of its founder. He had been involved with the organization for over 40 years. They always had dreams of a huge, state of the art baseball park, but had limited means throughout his lifetime to do so. Through the utilization of a life insurance policy, a large endowment was created and a park was built in his name.

These are just a few examples of how to utilize the products and services that we provide for the purposes of leaving a legacy. Of course there are other ways in which we can provide a legacy, but this is a good sampling of how we can make a difference.

As the proverb stated at the beginning of this post, the one leaving the legacy may never sit it in the shade of that tree they planted, but the legacy they leave behind can provide that shade for many years to come.

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
Principal, Agent Support Group-2-2018

I was recently at an industry conference where I attended a panel discussion with a group of specialists in the Life Settlement Field. I have always explored Life Settlements as part of my everyday practice. For clients that are at least in their late 60’s and own a life insurance policy, we always make them aware that there is an alternative valuation method worth exploring when they are deciding to either lapse or cash surrender these older policies.

I thought that the life settlement marketplace was at a low, but after sitting through the panel discussion, it was apparent to me that the marketplace is alive and well and positioned very well for the foreseeable future. With the aging Boomer Generation retiring at a rate of about 10,000 per day, the inventory for these policies is tremendous. Many of the seniors who hold these policies originally purchased them at a point in their lives that they were looking for a means of protecting their families if something were to happen to them.
As these Boomers are retiring, their needs are shifting. Their children are grown and now have families of their own and the gap that the insurance policy once filled is no longer needed. Instead, this group’s focus is now on income generation, not outliving that income stream and having an overall worry free retirement. When looking at total assets, life insurance (if they have it), is often overlooked and not viewed as a monetized piece of the puzzle.

Here are some things to consider to determine if life insurance can be used as a tool to solve a number of post-retirement issues:

1. Do they have permanent policies with cash value?
Policies that have some degree of surrender value may be worth many times more than it’s actual surrender value. Depending on it’s valuation, a successful settlement transaction can possibly yield an amount equal to 15 – 20% (or higher) of the policy face amount.

2. Do they have older Convertible Term policies?
Some older term polices may still be convertible up to age 75. Under these circumstances, many policies will simply not be renewed/lapsed. If they are still convertible, there may be an opportunity to sell that policy since it can still be converted to a permanent plan. In this scenario, a large windfall of cash can be created that normally would have been foregone. Think of old Buy-Sell term policies as a good source of these types of policies.

3. Is a client looking to defray Long Term Care Costs?
If a client is looking for funds to help defray costs of Long Term Care expenses, older policies may just be the answer. Depending on the size of the policy, the proceeds of a Life Settlement can be used for those types of expenses.

4. Is a client looking to reduce costs of current coverages?
Some clients still have a need to continue coverage and you may utilize a 1035 exchange to transfer cash surrender values to reduce the out-of-pocket premium costs of a new policy. In these cases, a settlement can possibly produce a much larger amount than a policy’s cash surrender value/1035 proceeds. It can pay to explore this as an option for your older clients.

5. Have clients had a change in “situation?”
Sometimes due to a health issue or financial burdens, some policy owners simply cannot afford the premiums to maintain a policy. If this happens in early policy years, a settlement may help recover premium costs that would otherwise be forfeited.

6. Are your clients looking to produce guaranteed income?
One of the goals of your client may be to reposition assets and produce a source of supplemental retirement income. Proceeds from a life settlement transaction can be used to purchase Guaranteed Lifetime Income via a number of well-designed annuity contracts.

As advisors, it is incumbent upon us to present our clients with “all” options available to them. Life Settlements can be a good way to turn a normally “overlooked” asset into a tremendous source of funds that can be used in a number of ways to further assist our clients in achieving their financial goals. For the most part, start looking at your clients that are at least in their late 60’s and early 70’s that have older life insurance contracts. Pricing looks best when there has been a health change of at least a two tables from how they were originally issued (e.g. Issued at Preferred, Preferred Best or a Standard Rate Class and now would be rated or uninsurable).

As mentioned earlier, the Life Settlement Market is alive and well. There is an abundance of capital available to purchase older life insurance policies. I am not suggesting that it can be used for everyone, but it is an option available to our clients that can assist them with their changing needs. It is worth a look and who knows…

There Just Might Be Gold in Them Thar Hills!

 

 

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-1-2018

It’s a new year and with it, the slate is wiped clean for all of us in sales.  Regardless of what we have done (or didn’t do), we start fresh and have to work on a new set of goals.  If there is one constant that exists, it is that every new year brings with it some interesting changes. 2018 is no exception.   The new Tax Cuts and Job Act is causing a bit of a stir, but in the end there are a host of opportunities that lie beneath the surface.

Of those opportunities, it seems that the doubling of the Estate Tax Exemption, an additional $5,600,000 for an individual or $11,200,000 for a couple, will be the area where the most planning will take place.   There is a window until 2026 and I would imagine that this will be where the greatest amount of activity will occur (if you have clients in that arena).

If we move the Tax Cuts and Job Act aside, I believe that the largest single area of focus for this year should be the Long Term Care marketplace.   Simply stated, everyone needs to have it as part of their financial plan.   It doesn’t really matter what tax bracket you are in, the need exists for all.  When I reference Long Term Care, I am not referring to the Stand Alone/Traditional models.  The market for those products has contracted to the point where there only a few carriers left and for those carriers that still have a product, they are cost prohibitive and offer no guarantee of future premium.

The opportunity exists with the Life Insurance products that offer Long Term Care Riders or Chronic Illness Provisions.   The most common design options are:

  • Guaranteed Universal Life with Long Term Care Riders
  • Indexed Universal Life with Long Term Care Riders
  • Whole Life with Long Term Care Riders
  • Hybrid Life Contracts (i.e. MoneyGuard)

These product designs are very unique and offer guaranteed premium structures as well as “non-forfeiture type” provisions that will ultimately pay a death claim to beneficiaries if a Long Term Care Claim never occurs during the life of the contract.  This is in contrast to a Traditional/Stand Alone policy that carries a “use it or lose it” approach to benefits.

These types of products also allow for many planning opportunities for a multitude of different client groups.  As an example, for Business Clients, these products can be used for Buy/Sell Planning where the benefits can be used to replace lost income to partners, provide for dollars needed to hire a replacement or for a “quasi buy-out.”

Because they are linked to a life insurance product, it is also possible to provide Long Term Care benefits at a sub-standard rate that you normally could not receive with a Stand Alone LTC policy.

We often hear the argument that clients can simply “self-insure” their LTC Needs.  Dismissing the fact that most clients do not or will not have enough funds to do so, below is a chart showing the power of leveraging LTC Benefits based on either a Lump-Sum Premium Hybrid Product ($100,000) or paying with an on-going premium structure ($5,000/year).  As you will from the charts below, the Tax-Free DB/LTC Pools and potential Monthly Benefits are quite large:

The versatility of these types of products appeal to a very wide range of client bases.   There are even options that allow you to procure a Survivorship Life contract with a parent/adult child and use the joint issue age for premium purposes and provide “un-capped” LTC pools.

With an aging population and illnesses like Alzheimer’s and Dementia expected to hit record highs over the next 20 – 30 years, these products will definitely be a huge part of your sales conversations in the coming year and beyond.

When I first started in the business, my Sales Manager told me to buy a policy on my own life.  I did and carried it around with me to sales calls. I was able to show my prospective clients that I was not just a salesman, I was a policyholder as well.  A good place to start would be to run some quotes on your own life.  See the process, and in the end, you will be able to speak from experience and show your clients that you believe in what you are selling.

There are obviously many different scenarios where these products fit.  We have created a number of sales materials to assist you in this marketplace.  We have even created a Retail Seminar that can be used to larger groups of prospective clients.   Give us a call to review this in more detail and see how you can make this opportunity a huge part of your 2018.

Happy Sales and all the best for a Healthy and Prosperous New Year.

Find more of Mark’s Bark’s Blogs on our website: http://www.asglife.com/insurance-view/marks-barks-blog/

Isn’t that what its all about?

by: Mark D. Milbrod, CLU
Partner, Agent Support Group

Isn’t that what it’s all about? Stuff !!!!!! I recently read that this holiday season is supposed to be one of the biggest ever for retailers. Something to the tune of $965B. So while we rush out on our families on Thanksgiving afternoon to get a jump on those Black Friday deals and trample our fellow shoppers for that “deal,” let’s take a step back and think about things for a moment.

With the commercialization of the holiday season, the true meaning of the holiday season has definitely been lost. But that’s an entirely different topic for another day. That number up above is staggering. Materialistic things are purchased with the notion of making the recipient happy. But I can guarantee that the large majority of “gift givers” are not thinking of the ultimate gift that they can give to their families, which is financial security if something that were to happen to them. Of course, I’m talking about life insurance.

It’s a tough sale to start talking to clients about life insurance during holiday time, but what is interesting is that family is on the minds of people most during this time of year. I’m not saying to run out and buy a life insurance policy, wrap it with pretty paper and bows and leave one under the tree in place of all the good “stuff.” What I am saying is that the topic needs to be brought up.

If people are spending all of that money on gifts for the ones they love, wouldn’t it make sense to take a small amount of that to make sure that regardless of what happens, there will be financial piece of mind to make sure that all of the important things such as a home, food and other essentials will always be there. And guess what, there will still be money left over for the fun stuff.

Because of the leverage of life insurance dollars, it doesn’t take much to provide large legacies. Of the total amount of expected retail sales this holiday season, can you imagine how much life insurance can be purchased with just ½ of one percent of that figure.

Today’s marketplace provides for some of the most diverse products that we have seen in years. There is Traditional Term, Whole Life, Guaranteed Universal Life, Indexed Universal Life as well as unique Long Term Care solutions. All of these products address the needs of our clients in many different ways. Whether it’s a spouse providing income continuation, a parent providing funds to provide for their children or a grandparent leaving a legacy, each product sale comes with the real value; financial security.

So just keep in mind during this holiday season when families are on the minds of most, it’s not just about those diamond earrings or an iPhone X, its more than that. It’s about giving the most thoughtful, loving gift of all…Financial Security.

Just some thoughts to ponder during this holiday season.

 

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

As we enter the home stretch of another year, I can say with certainty that this has been one for the record books.   We saw the inauguration of our 45th President and with it, we entered the age of governing by Tweets.   We have also seen the ushering in of a new era of “Death by Accusation.”  All these things have made for some interesting water cooler conversations, but there has also been a lot of chatter about life insurance.

There are many advisors out there that feel it is tough to sell life insurance in the climate we live in.  I am not going to argue that we may have to work a bit harder to get a sale, but I also feel that the marketplace is ripe with many sales opportunities.

One of the major objections today is the likelihood of the Estate Tax going away.  As a result, a number of advisors are saying that the mere notion of it is costing them a great deal of potential sales.   We do see some clients taking a wait and see approach on moving ahead with planning, but it’s important to note that even if the Estate Tax “goes away,” it will likely appear again at some point in the future.  Further, a complete estate plan can never be determined based upon a single administration.  Worst case scenario if it did stand, there would be a tremendous windfall to the heirs with a non-correlated asset class known as life insurance and what’s the harm of that?

 

The Estate Tax is just one sales segment for our current and potential client bases.  Utilizing life insurance, there are so many other areas where we are able to provide unique solutions.  Life Insurance is still the most amazing financial tool that anyone can have at their disposal.  Whether it’s…Income Replacement, Loan Security, Business Continuation, Supplemental Retirement Income, College Funding, Providing Long Term Care Protection, Buy-Sell Funding or Leaving a Legacy, life insurance solves problems that normally would cause hardships in absence of its existence.

Year end is always a time of reflection of what we have done.  It is also a time to look forward at what we will do.  To quote Wilbur Wright when he and his brother were working on their progress with their experiments ay Kitty Hawk…

 

 “…it is not really necessary to look far into the future; we see enough already to be certain it will be magnificent.  Only let us hurry and open the roads.”

 

The roads are open for the coming year.  We have, in the products we provide, the tools needed to do incredible things.  Life Insurance provides a constant that always has and always will be a game changer.

 

Happy Holidays (and Happy Selling)!

 

 

 

 

 

 

 

 

by: Mark D. Milbrod, CLU
Partner, Agent Support Group

My original plan for this month’s Blog entry was going to be something acknowledging Long Term Care Awareness Month, which is the Month of November.  But I figured we will all hear enough about that and besides our Partners Insight this month will cover that in great detail.  

Instead, this month I would like to share a story of something that happened a week ago that I was so glad to be a part of.  For those that know me, you are aware that I am a huge hockey fan and season ticket holder for The New Jersey Devils.

At a recent game, they had a young girl come out to sing the national anthem prior to the game.  She did great to start but after the first verse, I guess the nerves took over and she forgot the words. She tried to get back on track, but couldn’t.  At that moment, without hesitation, 14,000+ of her closest friends instantly started to sing and complete the singing of our national anthem with her.  At the sake of sounding corny and being a bit of a sap, it was truly something amazing to be a part of.   

There are so many negative things going on now, namely the kneeling incidents occurring in the NFL and the crossover effect that it has had with other professional athletes and even in the world of youth sports.

I’m not trying to get political and will keep my personal views to myself.  I do want to note however, that I do respect anyone’s opinion and right to exercise their views.  My point in all of this is to simply point out that the flag represents all of those freedoms that allow us to voice our differences and viewpoints, regardless of what side you lean towards.   

I was a part of something truly special that night and as we approach our Thanksgiving holiday later this month, let’s reflect on one thing, as Americans, that we should all be thankful!

I have included a link to the video for you all of you to see… 

https://youtu.be/ThXtw-KDp5o 

Have a Safe and Very Happy Thanksgiving Holiday! 

 

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

 

I just came back from a meeting where I had the pleasure of listening to Ross Shafer.  Ross is a former stand-up comedian, an Emmy winning talk show host and entrepreneur.  His topic was about staying relevant in a changing world.  We especially, as insurance professionals, are faced with a tremendous amount of change and disruption on a daily basis.   We can easily find ourselves in deep trouble down the road if we don’t find ways to stay relevant and move with the curve.

During his presentation, Ross put up a very interesting slide.  It read as follows…

“Success is not about who you know, it’s about who knows you”

He goes on to tell the audience that this is something that his father told him years before.  We all go to  meetings and hear many things.  But you know what they say, if you walk away with one important item when you attend a meeting,  it was worth it.  This quote was just that.

It started the wheels turning in my head and I wanted to share what I feel is a very strong statement.  As sales people, we all “know” a lot of people. These people we “know” are potential prospects that we hope to ultimately change into clients.

How do we do that? How do we get them to know who we are?  There are so many services that we provide but what is the best way to get noticed and stand out amongst our competition/peers?  In order to truly set ourselves apart and be noticed, we need to do things that make us unique (and noticeable).  Here are some ideas that might get you noticed…

  1. Conduct Educational Lunch & Learns for Small to Mid-Sized Companies

There are so many small to mid-sized companies that would welcome a speaker coming in and educating their employees on topics that can help them.  It’s important to keep the topics educational in nature and shouldn’t be a sales pitch.  The topics can be about Estate Planning Basics, The Importance of a Will or The Need for Long Term Insurance and the Types That Are Available.   Most employers will even pay for the lunch for their employees and a pick up a lot of goodwill along the way.

  1. Sponsor Local Chamber of Commerce Events

Get involved and sponsor local Chamber of Commerce events.  They are always looking for speakers and you get a chance to meet other local business owners.  Topics here can include a variety of business related topics such as Business Continuation, Buy-Sell Planning & Retirement Planning.

  1. Be Active at Community Events

Look for community events such as a National Night Out, Street Fairs & Festivals.  Set up an outdoor canopy with a display table highlighting your goods and services.  These events draw a lot of families who can surely utilize our goods and services.  Make it a fun atmosphere that will attract people to you.

  1. Be a Sponsor of a Local Youth Sports Team

Every town has local youth sports teams.  Whether its baseball, football, soccer, hockey, etc., sponsor a team by providing uniforms with your name on it and possibly some needed equipment.  The cost is usually reasonable.

  1. Write a Monthly Column for a Local Community Newspaper

Each month, pick a related financial topic to write about.  Have your picture in the article and a brief bio.  People will not only start recognizing you as an expert in your field, but they will see you around the neighborhood and know who you are.

These are just a few suggestions of how to get yourself noticed a bit more.

Because after all, It’s Not Who You Know, It’s About Who Knows You!

Find more of Mark’s Bark’s Blogs on our website: http://www.asglife.com/insurance-view/marks-barks-blog/

 

 

HAVE A HAPPYDEPENDENTSDAY”!

by: Mark D. Milbrod, CLU

Principal, Agent Support Group

 

No, that’s not a typo. That’s what I meant. Independence Day is upon us, but with all the freedoms that we celebrate, it is fitting to talk about the freedoms that we can provide for our families, our heirs, our Dependents.

There is nothing worse than witnessing a catastrophic event that can wipe out all that we have worked for our whole lives. Too many times, we see this happen to our clients, friends and others and it all comes down to poor planning. We live in a time where there is so much discussion about outliving retirement funds, what to do in the event of a long term care event, etc. As advisors, we have the ability to discuss a myriad of products and planning techniques with our clients to assure that they have done the proper planning to protect themselves (or their Dependents), against unforeseen life events.

What can we do to fill in the gaps? The short answer…A LOT.

Life Insurance – of course, the simple answer is Life Insurance. This has always been there to help Dependents get back on their feet. It can provide so many things; continued income, college educations, provides life long income for survivors, estate liquidity and the list goes on.

Long Term Care Insurance – providing a policy that will help offset the costs associated with a health care event requiring nursing home or home health care needs. This can be accomplished on an individual basis or under a Blended-Life design.

Disability Income Insurance – providing the replacement of one’s income with benefits should that person be unable to provide income due to some type of health impairment.

Income Annuities – for some clients, we can provide them/surviving spouse with an income that they can never outlive.

The above list is the more traditional approach for Dependent planning. But in today’s marketplace, we can go many steps further…

Living Benefits have become the popular trend in our industry and if you are not taking advantage of them, it’s going to cost you potential clients. Living Benefits enhance the traditional planning methods outlined above and ease the burdens on their Dependents. Here are some of the Living Benefits that you should be implementing with your clients:

Long Term Care Riders– LTCR’s can be added to Life Insurance policies and will allow your clients to access their death benefits should they have a life event requiring Long Term care needs. Although they come with different access definitions (e.g. indemnity v. reimbursement), the end result is the same, an ability to use a life insurance policy as a means to ease the burden on Dependents. They are even available on a rated basis for those that could normally not qualify for an individual LTC policy. Now, when a client objects to buying life insurance because “they won’t benefit from it,” in this case they can. This is a powerful tool to use and a great innovation to a standard life insurance policy.

Chronic Illness Riderssimilar to the Long Term Care Riders, these benefits allow early access to death benefits for permanent types of illnesses. Once again, easing the strain on Dependents.

Guaranteed Income Riders– through the use of new annuity product designs, these riders can guarantee income to annuitants based upon the high watermark values of a contract. This allows individuals to receive a higher guaranteed income, regardless of market conditions that can deplete values prior to retirement.

Disability/Unemployment Plans – for those of you in the term marketplace, there is a policy available to pay premiums and possibly convert a policy to something permanent in the event of a permanent disability. Further, in the event of the insured becoming unemployed, premiums can even be paid for up to one year of unemployment.

Living Benefits have taken the traditional approach to selling our products and taken them to a new level. These benefits are designed with an underlying theme for you to bring to your clients…easing the burden on their Dependents.

So, as we celebrate our country’s independence, eating our hot dogs, hamburgers and watching fireworks, let’s think for a moment about how we assist our clients in protecting what is most important to them and…

HAVE A HAPPYDEPENDENTSDAY!