New Year – New Opportunities

By: Mark D. Milbrod, CLU, CLTC

 

As we enter this new year, there will certainly be many changes.  And as always, with change comes opportunities.  You can either be part of the glass half empty camp or the glass half full camp.   I always choose the half full side.

Changes are already happening at a very fast pace in our industry.  We have seen more contraction in the GUL space with more carriers withdrawing their products.  This is mainly due to a couple of factors; the continuing low interest rate environment and tighter reserve requirements being placed on the insurance carriers.  With an incoming democratic President/Administration, we will likely see some changes as they relate to the Estate Tax and other regulatory issues affecting the products we sell.

There are some good things coming down the pike.  And believe or not, it is positive and there is a silver lining.  Here is some of what to expect:

  • To replace the GUL, there are several IUL chassis that will have very competitive Extended No Lapse provisions all the way to age 100.
  • A new simple to use Term Insurance platform called Vive. Under this proprietary platform, you will be able to quickly and efficiently submit your business with dramatically fast turnaround times.
  • Due to some year-end tax code liberalization, insurers will be able to expand premium thresholds for purposes of Section 7702. This will be a boom for Whole Life insurance sales with larger Non-Mec limits.
  • Continuation of NON-MED underwriting programs to further your ability to provide products to your clients as we navigate through more of the pandemic.
  • We have seen somewhat of an easing on some of the previous COVID underwriting rules. Some of these changes have expanded issue ages and/or face amounts.
  • Re-pricing and lowering of some term rates.
  • Introduction of a new Proprietary Annuity Product
  • New Webinar Series for 2021

As we did last year, we as your partners at ASG, will continue to keep you informed about the things that matter to you most.  Timely sales ideas, product and industry news will be vital to your success for 2021 and beyond.

The previous year had its challenges but through it all, we were there to assist.  But like any year, challenges bring opportunities.  Together, with the optimism of that glass half full, we wish you a Very Safe, Prosperous and Happy New Year!

 

What A Year It Has Been !!

By: Mark D. Milbrod, CLU , CLTC

To say this year has been challenging is probably the most gross understatement of all time.  We have all been living through not only the toughest year of our lives, but certainly the most challenging year of our careers.

But as we wind down 2020, I would like to first acknowledge all that have been personally affected by COVID.  If you have lost anyone close to you, I would like to express my deepest condolences.  As I put these thoughts to paper, the pandemic is still raging on.  That is something that I never would have thought when this started so many months ago.   When this is all said and done, I won’t miss hearing words like Pandemic, Unprecedented/Challenging times or my favorite, “We’re all in this together.”

It would be remiss of me to not mention a special thanks to all of the front line workers such as the Doctors, Nurses and First Responders who put US all first in the fight against COVID-19.    Add to that list the grocery store workers, truck drivers, delivery service personnel, restaurateurs, etc.  The gratitude for all of these individuals can’t be expressed enough.

But as we move forward, I must say that we have certainly evolved as an industry.  Yes, there were and still are challenges that remain as we face our day to day grind.  We have however, found a way to prosper through innovative delivery systems from our manufacturers that help us bring the much needed products and services that we provide to our clients.

Life Insurance, Annuities, Disability Income or Long Term Care products are probably more important than ever.  Prior to COVID, there was a vastly underserved market.  Now, that market has grown as we have found ourselves in front of a wider, more receptive audience, who are actually thinking about their mortality in a more serious manner.  Some of us still meet clients in person as well as through other means. We utilize services  such as Zoom, as a way of staying in front of current customers and to bring on new, prospective clients.

The carriers that we represent have developed unique ways of writing new business as a way of adapting to the pandemic.  A wide range of non-medical programs are available to apply for life, disability and long term care insurance.  Even Annuity products can be applied for via e-submissions.  In addition, a wide range of e-delivery options have been implemented.

In the end, we have so many options at our fingertips.  We have an important job to do and many options on how to do so (even through this pandemic).    As we navigate through this holiday season, albeit a strange one, we must look ahead to the future and welcome 2021 with a large amount of optimism.

We hopefully will see the virus abate sooner rather than later.  There are vaccines around the corner, which will offer additional promise,  speed up and control this virus to a point where we can get back to some degree of normalcy.

Several years ago, I came across the following quote by Wilbur Wright when my family and I visited the Wright Brothers Museum in Kitty Hawk, NC…

“…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.”

With that degree of optimism, I feel that this was representative of where we are today.  Brighter days are definitely ahead of us, both professionally as well as personally.

As your partner, we, at Agent Support Group will continue to bring you relevant and timely information about products and sales concepts.   And of most importance, we remain committed to assist you in any way possible and keep your success growing.

We appreciate your business and wish you and your families all the best for a Very Happy, Safe & Healthy Holiday Season.

 

 

Gary Bleetstein
Senior Vice President

November is Long Term Care Insurance Awareness Month and ASG would like to remind you how important LTC planning is for you and your clients.

66% of Americans say most people need long-term care insurance, according to the 2020 Insurance Barometer Study that Life Happens and LIMRA conducted. However—and here’s the catch—only 18% say they own it. This gap suggests an active market demand from over 100 million consumers.

Here is some really good and important information from Life Happens – one of our industry associations who advocate with a passion for education.

Why is long-term care insurance worth it? 

  • First, it’s worth reviewing a long-term insurance definition.
  • Long-term care insurance is coverage that pays for care either in your home or in a specialized facility should you develop a health condition that requires partial or full-time care.
  • Long-term care insurance is an increasingly important consideration for an aging population that is living longer than ever. The U.S. Department of Health and Human Services reports that 69% of people will use long-term care services at some point.¹

And that care doesn’t come cheap: Long-term care costs range from $19,500 per year for adult day care to $102,200 per year for a private room in a nursing home.²

These statistics underscore the reasons why long-term care insurance is worth it. They include the following:

  • It protects your assets.Many people falsely believe that public health programs like Medicare or Medicaid will cover their long-term care expenses. In reality, Medicare caps payments for skilled care at 100 days, and it only pays if certain requirements are met. Meanwhile, Medicaid only kicks in after you spend down your own assets. Private health insurance cannot be relied on either, since it only pays for doctor and hospital bills. If you planned on relying on these options, you would have to spend most of your own money to pay for care. That would deplete your hard-earned savings and make it impossible to leave money to family members or a favorite charity when you pass away.
  • It takes pressure off your family.It’s also not a great idea to assume that a family member would step up to provide care. Becoming a caregiver is physically, emotionally and often financially burdensome. Many people are not able or willing to make such a huge sacrifice. This is especially true when the caregiver is a spouse or partner also facing their own aging health issues.
  • It gives you care options.Long-term care insurance gives you flexible options when it comes to deciding where to receive care. You almost never get a say when you rely on a public health program like Medicaid to cover your long-term care expenses. Many facilities don’t accept Medicaid, so your only option may be a no-frills nursing home with shared rooms rather than a more amenity-oriented private nursing home where you’d get your own room. What’s more, Medicaid doesn’t pay for all (or even any) assisted living costs in many states. Relying on care from a family member likewise limits the say you have in the care you receive.
  • It may come with life insurance protection.Today, many long-term care insurance policies are hybrid policies that bundle long-term care coverage with life insurance coverage (or an annuity). Hybrid life and long-term care policies offer your loved ones protection in the event you pass away, while also giving you the assurance of knowing that your long-term care needs are covered. Plus, a hybrid life and long-term care policy can save you the time and expense of buying two separate policies.
  • It puts you in control and gives you peace of mind.With long-term care insurance coverage, you never have to wonder what would happen if you needed long-term care and how that care would be paid for. And because long-term care insurance can be bundled with life insurance, your family has the extra benefit of knowing they’re protected if you were to pass away. For many people, this peace of mind is the top reason for buying a long-term care insurance coverage.

¹ U.S. Department of Health and Human Services
² Genworth’s Cost of Care Survey

 

There are many options for long-term care insurance.  

When it came to long-term care insurance options in the past, the only offering was a standalone policy. These policies offered coverage only for long-term care coverage in either your home or in a specialized facility.

Now-there are several ways to purchase Long Term Care- one way that Agent Support Group can assist you is by using the Linked Benefit / Hybrid LTC with Life Insurance –

Today, you can buy a policy that bundles long-term care coverage with life insurance coverage (or an annuity). This means you get two important coverages in one policy: life insurance, which offers your loved ones financial support if you were to pass away, and long-term care coverage, which covers you if a chronic illness or disability means you’d need long-term care.

These policies go by several names such as hybrid, combo or linked-benefit products. No matter their name, there are several important benefits to having both life insurance and long-term care insurance in one policy. They include:

  • Benefitting from more complete coverage.Life insurance may be a priority for you and your family right now while the need to pay for long-term care may become a higher priority in the years ahead. A hybrid policy serves two very important coverage needs in one policy.
  • Having flexible payment options.You can pay for a hybrid policy with either a lump sum or through an annual stream of premiums.
  • Having the option to lock in your premium.Unlike traditional standalone long-term care insurance policies, many hybrid policies give you the option of locking in your premium. This means you pay a consistent premium the entire time you own the policy and don’t need to worry about price increases.
  • Enjoying a better return on your premium dollars.There is no “use it or lose it” aspect to hybrid policies. That’s because the life insurance portion of a hybrid policy offers a death benefit and/or an annuity payment, ensuring that all those premium dollars you paid will return to your family if you never need long-term care. (Just know that tapping the long-term care portion of the policy will reduce the death benefit on the life insurance side of the policy.)
  • Being easier to obtain.Medical underwriting for hybrid policies is often less involved than it is with traditional standalone long-term care policies.
  • Benefitting from tax savings.Life insurance benefits are almost always paid out tax free while premiums paid for long-term care insurance can sometimes be deducted from your state and federal taxes.

So let’s all use this as a reminder that November is Long Term Care Insurance Awareness Month and Agent Support Group is here to support you and your clients in these trying times with new and innovative sales and underwriting solutions.

 

Gary Bleetstein

Jay Scheiner, Executive VP
You are an insurance advisor meeting for the first time with your new clients, Jim and Deb. You asked them to bring, among other documents, their current insurance policies and their Wills to the meeting. This married couple, around 40 years old, have twin daughters, Dana and Donna, age 10. While reviewing their current life insurance policies, you notice that their beneficiary designations are not what they should be.

Jim’s Policy Primary Beneficiary: Deb, spouse of the insured. Contingent Beneficiaries: Dana and Donna, children of the insured.

Your clients should not name their minor children as direct or contingent beneficiaries, since a life insurance company can’t pay out proceeds directly to children until the children reach the age of majority, typically 18 or 21 depending on state law.

In most jurisdictions, to protect the interests of a minor, state law requires appointment of a guardian or trustee to administer proceeds payable to the child. Appointment proceedings will delay access to the death proceeds and generate unnecessary legal and administrative expenses. As important, the fiduciary named by the court may not be the one the insured would have chosen if they had made this decision during their lifetime.

Deb’s Policy Primary Beneficiary: Jim, spouse of the insured. Contingent Beneficiaries: (none indicated).

Your clients should designate a contingent beneficiary in all of their life insurance policies, and the beneficiary designation should be worded in a way that will best benefit their children.

Having no named contingent beneficiary is the same as naming the insured’s estate as the beneficiary. Is this a bad thing? It can be; in the absence of a Will designat- ing a guardian or trustee the courts will intervene, which may cause long, frustrat- ing delays. The courts could also impose restrictions on how the proceeds will be spent or distributed, which may be contrary to what the insured would have wanted for their children.

While Jim and Deb will go to great lengths to protect their children (that’s a major reason they purchased the life insurance), they need you, the insurance advisor, to help them find appropriate solutions. It is therefore important that the beneficiary designations allow for the distribution of the life insurance proceeds in the most disciplined manner possible to provide maximum benefit to their children when the parents are gone.

Okay—here are some practical ways to ensure that minors, through the people entrusted with their care, have access to the life insurance proceeds intended for them:

• Make the contingent beneficiary of the insured’s life insurance policy a Testamentary Trust in the insured’s Will. The terms of your client’s Will can contain this trust, which does not spring to life until the death of the insured. Referencing the trust in the Will is a precise way to ensure that the parent’s exact wishes for their children are followed. The trust, which is a legal document, names the person the insured chooses as the Trustee, and describes how the parent would like to have the money managed and spent and for how long. An 18-year-old may be an adult under the laws of many states, but the client’s testamentary trust could be written to keep the newly-minted adult from frittering the money away before he or she is 25 or 30.

In our example, the contingen beneficiary section of the life insurance application would state: (Trustee’s Name) as Trustee under (Article X) of (Jim or Deb’s) Last Will and Testament dated (January 1, 20XX).

• Taking advantage of the Uniform Transfers to Minors Act (UTMA) is an excellent way to ensure that children receive proceeds from a life insurance policy, especially if the parents have not yet executed their Wills. Under the UTMA, the parents would name an adult custodian who is given the discretion to make distributions for the minor’s welfare. The UTMA account (which is essentially a statutory trust) allows parents to choose a custodian— a person they trust—who would man- age the life insurance death proceeds, and other assets they might have in the account, as they see fit prior to the children reaching majority.

Some insurers have a specific form to assist in making a beneficiary designation with UTMA custodian the beneficiary or contingent beneficiary of a life insurance policy.

If no special form is available, the following wording would generally be accepted: (Custodian’s Name) as custodian for (child’s name) under the (State) Uniform Transfers to Minors Act. However, you should confirm with the insurance company the specific wording they would accept.

• Designate a Living Trust as beneficiary or contingent beneficiary in place of the child directly. This is similar to the testamentary trust referenced above, except that a living trust exists at the moment it is executed, whereas the trust in the client’s Will (testamentary trust) begins its life only at the insured’s death. Like the trust in a Will, a living trust allows the insured to detail the terms and conditions of gifts and plan for every contingency. The downside of this type of trust is that it will require some level of administration from the outset. If your client has a child with special needs, your client should have a living trust. If their net worth is in the tens of millions, it’s a no-brainer, and in that case the trust should be irrevocable.

Conclusion: Your clients rely on you to help them make good decisions with respect to their life insurance. These skills can separate you from those less knowledgeable. Your ability to immediately spot planning flaws (minor children as direct beneficiaries or silence as to contingent beneficiaries) may get your client to open up to you and begin talking about what is important to them. Your understanding of, and the ability to explain, the various beneficiary options is just one of many skill sets you should pos- sess. While it may seem like a big job to get this step right, keep in mind that not doing so could have repercussions for your clients’ heirs for many years to come.

 

Life Insurance Awareness

Sam Kaufman,
President, Agent Support Group

At the beginning of this year we all believed that we had a clear vision for 2020.  Then came Covid-19, which required us all to change the way we conducted our day to day business.  The life insurance industry rallied to the cause with new expanded underwriting systems and procedures in an effort to accommodate advisors and their clients in a way never seen before.   We should all applaud our insurance companies for the rapidity in which they responded to this world changing event.

During this time, Agent Support Group reached out to advisors to educate and train them in the use of automated e-application processing systems, e-delivery and e-signatures.  Suddenly, a new world was thrust upon us and we all needed to speedily adjust to our new environment.   Perhaps the only thing lacking was creating public awareness to the fact that the life insurance industry was here to help provide needed financial protection for families and businesses.

Historically, the life insurance industry has been like a snail in adopting technological advances similar to those we have all witnessed in the financial services industry.   However, in 2020 the industry came to the rescue of Americans that were concerned about the financial needs of their families and businesses.   This presented an amazing opportunity for advisors to engage their clients and a reason to reach out.   Just a simple act of calling to check in on the status of a client and letting them know that you are here to help.

Covid-19 may be just a warning shot to let us know that technology, while bringing many benefits, does not replace human compassion.  We have quantified every element of our lives by comparing costs, but maybe not the product we are selling.   How many of you are selling the first product on a term spreadsheet, not knowing that the conversion feature may have limitations that are important to your client.  Is “cheap” always good?   We all know the answer, but do we make it part of our practice.

Hopefully, everything that has occurred in 2020 will bring some good.  Whether it be a speedy discovery of a safe vaccine or just a change in the way we conduct our day to day lives.   Remember, we are selling financial security that will be here for your client when needed.

Gary Bleetstein, Senior Vice President

There was quite a lot of discussion in the industry about IUL and in its early stages, how will it look, and how will it illustrate? Remember when carriers would set maximum crediting rates based on their own lookback durations and their own calculations. This alone  caused the industry to realize IUL would look either great or even better than great. At this point everyone or almost everyone wanted a level playing field for illustrating IUL.

Then came the multipliers and other factors that made IUL products impossible to compare, especially when it came to accumulation and expenses.  Some carriers were riding high on illustrating top rates, bonus’s and huge multipliers, some guaranteed and some not.

After a number of years of this, the industry has and plans to have this fall, a new Regulation spirit where products with very high multipliers, high cap rates and other features may need to review how they will compete when they may not be permitted to use these factors when illustrating IUL in the future. This is one way of leveling the entire playing field. Another change being reviewed dis the way a carrier illustrates loans in an IUL Going forward, loans are going to be shown at .5% higher than the stated loan interest rate which will effect product performance.

Well 2015 is behind us and now it’s time to re-evaluate the true performance of an IUL and in that case, any cash value life insurance product. Our clients and advisors expect our carriers and our distribution to give them all of the facts and let’s hope the new AG- 49-A does just that for IUL.

.

Jay Scheiner, Executive VP

 

Many families can preserve precious assets by using life insurance as a stand-in for a long-term care policy when the insured is unable to qualify for LTC coverage.

Often, our clients apply for long-term care (LTC) insurance or combined life with LTC rider, only to be denied coverage due to adverse health history. Frequently these clients already own, or can qualify for, a life insurance policy without an LTC rider. In this situation, families can accomplish similar goals by using life insurance as a stand-in for a long-term care policy or LTC rider.

Example:  Denise, age 60, is a non-smoker, in reasonable health except for type 2 diabetes and osteoporosis. She applies for $600,000 of Universal Life with a qualified LTC rider that would provide up to $12,000 per-month for up to 50 months of care. The $600,000 policy with LTC rider would cost Denise $11,800 per year at standard. The same $600,000 policy without the LTC rider would cost her $9,800 per year. While Denise is accepted as a standard-plus risk for life insurance, she is denied coverage for the LTC rider. Denise accepts the policy as offered – without the LTC rider.

Fast-forward 20 years:  Denise, now age 80 and disabled, requires long-term care services and would qualify for an LTC claim. She remains disabled for 36 months before she dies.

If Denise had a policy with LTC she would have paid $236,000 in premiums until the time she became disabled, and another $29,900 until she passed away. After a 90-day elimination period – during which Denise would pay $36,000 for her care – the policy would pay her $12,000 per month for the remaining 33 months of her life, for a total of $396,000. At her death her beneficiaries would receive the balance of the policy, $204,000, as a death benefit. The total Denise and her heirs would receive from the policy would be the combined policy limit of $600,000.

If Denise had a policy without LTC she would have paid $196,000 in premiums from the time she became disabled, and another $29,400 until she passed away. By spending down her savings, Denise would pay $12,000 per month for care for the 36 months of her disability, for a total of $432,000. After her death her beneficiaries would receive the $600,000 death benefit tax-free – effectively replenishing all of the costs of Denise’s lengthy illness and care plus an additional financial legacy for her loved ones.

Life Insurance AS Long Term Care Insurance:  As you can see from Denise’s story, life insurance can act as an ideal asset to replace the cost of care even in the absence of LTC. We have worked with agents and advisors in structuring hundreds of insurance plans for the purpose of funding the cost of care. Sometimes the solution comes in the form of a traditional LTC policy. More often than not it is in the form of life insurance with an LTC rider, and certain situations call for a single premium LTC hybrid product. There are times, though, when a family like Denise’s, which bears the burden of long term care expenses, can best be reimbursed using the death claim from a life insurance policy.   ~JS

 

Sam Kaufman,
President, Agent Support Group

My Mother would occasionally give me a kick in the rear and tell me I better straighten up.   The Covid 19 Pandemic gave the life insurance industry a big kick in the rear triggering an unprecedented acceleration in sales processes and underwriting that I have never witnessed in the over 45 years in this industry.   Many new sales opportunities have resulted from these enhancements and if you have not taken advantage of them – shame on you.

Now more than ever client engagement is a necessity.   Your clients need servicing not only concerning their life insurance policies, but also their estate planning.   Opportunities for sales abound, but you must reach out to your clients to capture these sales.   Waiting for your telephone to ring will not work.

Last week an advisor 80 years old submitted two applications via e-app with 15,000 of target premium.   I will admit that he had some assistance from his grandchild, but he got the job done and policies will likely be issued within ten days.   Another advisor had a client, age 54, that we were able to get 5,000,000 with John Hancock without an examination.   From application to e-delivery in 10 days.

There are no excuses for not taking advantage of the multiple accelerated underwriting programs available from multiple life insurance companies. There will never be another opportunity like the present for you to engage your clients and demonstrate your professionalism and concern for their families.

The entire team at ASG is here to help you get started.

Gary Bleetstein, Senior Vice President

 

I have been in the life business for over 30 years and have never seen the situation the way it is today.

Carriers are increasing rates, reducing death benefits or not even entertaining applications at older ages, and auto mated underwriting appears to be in our near future for cases under age 60 and face amounts in the 3-5  million range.

We have state insurance departments extending the premium paying dates for up to 90 days, with or without financial justification, and carriers are removing certain products as a result of both covid-19 and zero interest rates.

But there is some good news to report:

  • People are still asking about buying life insurance.
  • The Life Insurance Industry stayed alive even after the two world wars and the 1918 flu virus.
  • Our industry is nimble and has found ways to overcome some required medical requirements via auto underwriting and some good logical thinking, using aps client portals.
  • While the markets may have tanked, some people still have estate and other planning needs- especially now.
  • For larger cases- some clients are still willing to be examined under the correct circumstances.

Agent Support Group- an AmeriLife Company is in business and here to stay and serve our advisors and their clients from submission to commission.

We have great technology, great underwriting and sales programs, but most important, we have great people who work for us. ASG is proud of each and every one of our employees who work every day to make your lives easier and we applaud their work and work ethic.

Together, we will wind this battle, win this war and continue to move forward in the financial services business.

 

Jay Scheiner, Executive VP

Welcome to Agent Support Group’s 5th anniversary edition of ASG NEWS coming to you direct from New York City. ASG remains open for business with all employees operating remotely. Our staff has the training, technology and experience to successfully work from remote locations without interruption. We will guide you through the new ways of doing life business, assisting you with accelerated underwriting programs and electronic applications.

Many of you have been touched by the events of the past month and we pray for you and those you love. Everyone in the ASG family has been affected as well with family members or friends taken ill. And then there are the heroes among us: ASG family members include those who serve as healthcare professionals and as volunteers and workers in businesses tirelessly providing needed resources such as food and medicine deliveries to our neighbors. My daughter Marissa is on the front lines as an RN at a medical center in the heart of Manhattan. Several of our employees help care for the elderly who are most vulnerable. We have seen the very best of our people in this most uncertain time.

In this issue of ASG NEWS we’ll show you exciting ways ASG can help insurance advisors continue their practice in these trying times – here is a brief sampling of this months newsletter content.

  • Important carrier bulletins.
  • Mark’s Blog, “The New Normal.”
  • A 3 ½ minute video with tips to improve your webcam communications.
  • ASG’s coronavirus business continuation plan & ASG staff directory.

As you know, ASG recently became part of AmeriLife. We welcome our new relationship and expanded offerings of products and services. We also welcome the many AmeriLife affiliated agencies that can now offer the cutting-edge life products in ASG’s portfolio. Wishing all of you health and safety during this time.  ~JS