It’s January and with it comes that favorite time of year for an insurance agent – We’re back to ZERO. As good a
year as we had, it never fails, a clean canvas to work on. If you’re like me, you have already put together your
prospect list and have your elevator speech ready to go. Who are we going to see and what are we going to sell?
That’s the burning question.
You can plot out your year by thinking of the clients that you already have. Take inventory of your in-force term
business, assess annual statements and look at changes in your existing clients lives. Have new
children/grandchildren been born? Who is retiring this year? Who has had career changes?, etc. All of these can
help you plan your activity for the year. But, what about new sources of income, new lead generation sources
and what about one of the most underserved market places out there, the Supplemental Retirement Income
With Income Tax and Capital Gains rates increasing, there is a tremendous amount of potential business waiting
to be sold. Believe it or not, when I speak to many advisors, they often have to be reminded of one of the best
vehicles available to set aside funds to supplement one’s retirement, Permanent Life Insurance Products . It has
been, remains to be and for the foreseeable future, continues to be that vehicle.
Where else can you set aside a “virtual” uncapped contribution, receive tax deferral on the growth and potentially
take your money out on a tax-free basis? Oh yeah, let’s not forget that along the way, if you die prior to reaching
your cash accumulation goal, a large tax-free death benefit is paid to your beneficiaries. Further, with today’s
product offerings, you can still add Waiver of Premium benefits that will possibly contribute the premiums for you
if you become disabled along the way. In addition, other living benefits such as Chronic Illness or Long-Term Care
Riders can possibly be added.
Here is a sample of what can be accomplished:
The above illustration shows how powerful permanent life insurance products can be. This example uses Whole
Life, but other permanent products, such as Current Assumption or Indexed Universal Life, could be used as well.
No matter how you position it, this type of program should be discussed with many of your current and
prospective clients. The tax-free rates of return are extremely competitive, yielding ultimate returns between 4
& 5%. There is even the potential of higher returns depending on product choice and actual performance.
Combine those rates with the tax-free withdrawal possibilities and these products are even more appealing.
Although there are no tax deductions for contributions, these products are of great interest to many business
owners since it allows them to procure a product that allows for discriminatory contributions on their behalf. In
addition, these products give them great flexibility in providing key-employees with extra benefits that are also
discriminatory in nature and act as an exceptional employee retention tool.
As mentioned, permanent insurance products are a great product that is often overlooked or forgotten by many
advisors. That doesn’t quite make sense based upon the huge potential of this largely untapped market. This is
not a product that can or will be purchased on-line. It needs a true professional to carefully explain how it works,
what the benefits are and how to properly use it as part of a well-balanced retirement program.
Permanent life insurance products can be incorporated into a plan and used as an alternative asset class and at
the same time provide a wide range of benefits. These products are widely accepted by Attorneys, CPAs,
Investment Advisors, etc. They offer a wide range of benefits and protect against many types of threats that
traditional planning cannot do.
We all started out with that ZERO on New Year’s Day. One way to make for a successful 2015, is to offer these
products to our existing and prospective clients. The ZERO’s you will see will be preceded by a lot of other numbers, making this an ideal way to increase your sales this year.