Creative Financial Services No Comments

5 Must Know Facts About Life Insurance

Many of your clients may not be aware of the ‘living’ benefits and other perks of a life insurance policy.

Here are a few fast facts that may help sway the vote on selling a policy:

Cash Accumulation

Some permanent life insurance policies include a cash value – meaning there’s the financial potential that can be applied towards college tuition or even supplemental income for retirement.

Rewards & Discounts

Participants in the John Hancock Vitality Program are encouraged to eat right and exercise -the incentive is that they can save up to 15% on their annual premiums.

If that wasn’t enough, clients will also:

Tax Advantages

Proceeds are generally income tax-free to beneficiaries.

And when properly structured, are not considered part of your estate – and therefore safeguarded against estate taxes. Plus, there’s room for tax-deferred growth, tax-favored loans, and tax-friendly withdrawals

More Affordable Than People Think

Most people over estimate the total cost to be almost twice what it really is. And with term life rates on the decline, a personal policy is more affordable than ever – especially if purchased early and coupled with a healthy lifestyle.

Long Term Value

Imagine a family of four living off a single 60k annual income. If that income were to suddenly disappear at age of 40, it accumulates to a total loss of 1.2 million over only 20 years. That’s well over the amount the average person could save on their own.

Contact your Life Insurance Specialist for detailed information about a plan that meets your client’s needs and budget.  

Creative Financial Services No Comments

Brain Power For Underwriting Seizures And Epilepsy

Epilepsy is a disorder characterized by recurring seizures. Diagnosis is typically made when a person has had two or more seizures.

Seizures are a result of disturbances in the electrical activity of the brain. There are many causes including genetics, traumatic brain injury, stroke and brain tumors. Epilepsy is termed as ‘idiopathic” when the specific cause cannot be identified.

There are two major groups: focal seizures and generalized seizures. The difference between the two is how and when they begin in the brain.

Focal seizures involve activity limited to only one area of the brain:
  • Simple or Partial Focal – affects a small part of the brain without affecting consciousness or awareness. They may alter emotions, smell, feel, taste, sound. Involuntary jerking or sensory symptoms may also occur
  • Complex or Partial Focal – similar to simple focal, but also involves impaired consciousness
Generalized seizures involve widespread activity in both sides of the brain:
  • Tonic-clonic or grand mal – involves body convulsions. Muscles will stiffen (tonic phase) and the body will jerk and twitch rhythmically (clonic phase)
  • Absence seizures or petit mal – a milder, brief type of activity that causes unconsciousness without convulsions
Here are two case studies:

A 52-year-old male
– Has a history of childhood idiopathic epilepsy with mild absence type seizures that started at age eight
– Controlled with medication which was stopped at age 20
– There have been no seizures since
Offer: Preferred

42-year-old male
– He began having complex seizures at age 26
– His MRI was negative
– For the past five years he has been maintained on two drugs with an average of five seizures per year
– Does not drink alcohol
Offer: Low substandard

Call your CPS Life Underwriting team to discuss the specific details of your client’s seizure or epilepsy history. Let’s work together to get the offer you need!

Creative Financial Services No Comments

Why You Need To Talk About LTCI

Most people envision themselves living a long life, investing and planning throughout their working years to create a financially secure future where they can enjoy spending time doing their favorite things.

As part of your client’s financial planning process, it’s important to understand the potential impact that needing long-term care may have on their assets, their family, and their future.

The reality is, as people start to live longer, the greater the likelihood is that your clients will require long-term care.

The costs associated with long-term care are significant

While it can take decades to accumulate the assets they’ll need to retire comfortably, just a few years of paying for long-term care may threaten a lifetime of savings.

If you’ve ever been in a caregiving situation, you understand the physical and emotional toll it can take. While providing care to loved ones is an act of compassion, placing these burdens on spouses, children and other family members can create a significant emotional and physical strain and are something that many people would like to avoid.

Don’t wait to address your client’s long-term care needs

Incorporating long-term care insurance into financial plans today can help protect assets, reduce the burden of care that would otherwise fall on family members, and enable clients to receive care in the setting they most prefer, including their home.

Perhaps the greatest benefit: Long-term care insurance allows loved ones to care about, rather than care for, each other.

We’re here to help you design a plan that is both affordable and the best solution for your clients’ needs – contact your LTCi Sales Rep for guidance.

Creative Financial Services No Comments

New Markets To Grow Your DI Sales

The need for an income protection plan is not just for the Executive, Doctor or Attorney earning in excess of $150,000. According to the United States Census Bureau, in September 2017 the average annual income in the United States was $51,017 from all occupations.

Average everyday working people (Middle America) are just as dependent on their income to provide for themselves and their families as anyone in those higher tax brackets.

Your opportunities are endless – reach out to your Clients, Friends, or Family

Ask if they have an income protection plan in place should they get sick or hurt. You can offer them an affordable plan to protect them and their family. Of the advisors I speak with every day, Life Insurance Agents, Health Insurance Agents, and P&C Brokers, 92% are not talking to their clients about income protection and how affordable it can be. 

You can differentiate yourself as an advisor just by offering valuable coverage to your clients that no one has ever spoken to them about.

Here’s an example:

Did you know that the premium for a 40-year-old Office Clerk for $2,500 monthly benefit is only $52.00 per month? There are affordable plans for even part-time Dental Hygienist and Registered Nurses working as little as 24 hours per week.

Talk about opportunities, there are over 192,800 Dental Hygienist in the US earning an average annual income of $70,000 and 2.7 million Registered Nurses earning approx the same income.

Never let premium be the reason your client’s income is left unprotected from an injury or sickness

The new affordable DI plans can fit almost any budget. The premium for a 35-year-old Dental Hygienist for $2,500 monthly benefit is only $52.05 per month. A 40-year-old Insurance Agent can purchase $4,000 monthly benefit for $60.28 per month.

Your clients want to buy Income Protection, but they need someone they know and can trust to ask them about it. You are at the front-line to educate your Middle America clientele about the vital need for income protection in the event of an injury or sickness and how affordable it can be.

Discuss income protection insurance with all your prospects and clients, because they may not understand the risk of losing their income should an injury or an illness strike.

Contact your CPS Disability Experts for Marketing Tools and Sales Ideas to help your clients.

Creative Financial Services No Comments

More On Opportunity Recognition – Beneficiary Designations Continued

An earlier article discussed Opportunity Recognition, one of the Four Cornerstones of building a successful charitable planning practice. Recall the reference to fundamental testamentary transfers – bequests by will.

These transfers take place only upon the death of the donor and bequests by Will represent the largest segment of testamentary transfers that occur. But there are others worthy of your familiarity as you progress in your ability to uncover gifts.

First, are beneficiary designations

These can be attached to annuities, life insurance policies and even qualified plan accounts such as IRAs or 401k plans.

Remember that opportunity recognition is a process of discovery, so take time to read every document and ask a lot of questions.

For example, when you see a charitable designation for a life insurance policy, find if it may be best to gift the policy now and utilize the immediate income tax deduction that will result. And if you do accelerate the gift check with the charity, make certain that their policy allows gifts of life insurance.

You will be shocked how many organizations either don’t have a written gift acceptance policy or won’t accept any asset other than cash or readily marketable securities. You may conclude that it is better to give a different asset because the life insurance will go to the non-charitable beneficiaries income tax-free while other assets, such as IRAs, may not.

If a charity is the designated beneficiary on an IRA or other qualified plans, again, it’s time to ask questions that help you clearly understand the philanthropic intent of your client and donor. Does your client know that the beneficiary designation can be split among multiple charities in any percentage?

Now that the charitable IRA rollover is a permanent part of the tax law, it might be appropriate to help your client take advantage of the 100k per year direct IRA gift. Advisors can be a huge help in sorting through the somewhat complex forms and paperwork that often accompany this particular gift.

Less common, but still an important type of account is the Transfer on Death or TOD account

These operate a beneficiary designation only for assets that are not normally associated with having “beneficiaries,” such as bank accounts, brokerage accounts, and even real estate. When real estate is involved, it is that state’s regulations that govern transfers.

Currently, approximately eighteen states allow TODs of real estate – a few more have introduced legislation. If this is something that you were thinking about recommending, check state law first. TODs can be established to transfer to heirs, to charities or both.

However, if you spot an existing TOD headed for charity, this is a great opportunity to discuss other charitable options for the same asset(s). Appreciated securities may be exchanged for a charitable gift annuity, contributed to a charitable remainder trust or even a new pooled income fund.

Active pursuit of this kind of examination by advisors should be common!

This activity alone will set you apart from your peers. But what will distinguish you is the ability to unlock gifts that your clients were unaware they could create. You can find hidden treasure simply by reading documents and looking at beneficiary designations, then asking good questions about what you discover. This is an extraordinary opportunity for your clients and for you as an advisor.

Creative Financial Services No Comments

The Shocking Truth About The Average American Household

Losing a loved one can be devastating to a family, both emotionally and financially. While it is almost impossible to prepare for the emotional challenge of death, it is much easier to prepare for the financial challenge when adequate life insurance coverage is in place.

More than half of Americans believed that they would feel the financial impact from the loss of the primary wage earner within six months.

This doesn’t just speak to households where there is no existing life insurance coverage in place

Over one-quarter of consumers who already own life insurance feel that they do not have an adequate amount of coverage.

As life insurance agents, staying in regular contact with existing clients helps to ensure that the amount of coverage in place is commensurate with changes in their lifestyles.

Many life events such as marriage, divorce, the birth of a child, changes in employment or the purchase of the property will trigger a change in the insured’s need for life insurance coverage. When your clients are going through these experiences, their life insurance coverage is often not at the front of their mind.

We have tools available for your immediate use to simplify the regular review of your clients’ existing coverage

Including customized kits for both you and your clients. Call your CPS Life Sales Rep today to learn more about the resources available.

Creative Financial Services No Comments

What Is COPD?

Chronic Obstructive Pulmonary Disease, or COPD, refers to two types of respiratory illnesses – chronic bronchitis and emphysema. COPD is characterized by obstruction to airflow that interferes with normal breathing.

It is the third leading cause of death in America and smoking is the primary risk factor. Other risk factors include exposure to air pollution, second-hand smoke and occupational pollutants.

One of our A+ carriers takes an aggressive approach to underwriting and has a crediting program available that could help get more favorable offers on this impairment.

Take a look at this COPD case study:
  • 55-year- old male
  • Applying for $750,000 of Term coverage
  • Diagnosed four years ago with COPD
  • Non-tobacco user for the past five years
  • Treated and compliant with low dose of bronchodilators
  • Pulmonary Function Test shows FEV1 at 73% (normal is above 80%)

Initial assessment is Table 2

Medical and non-medical credits given for:
  • Good cholesterol/HDL ratio
  • Net worth greater than $1,000,000
  • Favorable family history
  • Regular preventative care
  • Minimal alcohol use

After credits, underwriting decision is:  STANDARD!

You can breathe easier on your COPD cases! Call the CPS Underwriting Team to help get the best possible offers on all your impaired risk cases.  

Creative Financial Services No Comments

Cross Selling Long Term Care Insurance

There are numerous people you know that need Long Term Care Insurance, many of them include your current clients. Perhaps you have already sold them a Life Insurance Policy, yet how do you get them interested in LTC?

Cross Selling can be difficult, yet when you present your client with information about LTC, they should understand the benefit of protecting themselves when they may need it.

Begin by talking about the consequences of living a long life will have on their family – and offer to put together a plan to protect them from the biggest risk they face after retirement – one that must be protected with Long Term Care Insurance.

Once the conversation is going, a few good questions to ask include:
  • What percentage of your retirement assets have you set aside to pay for Long Term Care services?
  • Are you concerned about the impact a chronic illness would have on your retirement savings?
  • If it were necessary to increase your spending by $3,000 or $4,000 a month to pay for LTC services, would that concern you?

To learn more about incorporating Long Term Care into your product portfolio, or if you need more prospecting tips, contact your LTC Specialist today!  

Creative Financial Services No Comments

Business Overhead Expense Is The Door Opener To DI Sales

The unasked question to small business owners is, What would happen to your business if you were to get sick or hurt and couldn’t work for a lengthy period of time?

Most small business owners could not get away for a long weekend, let alone several months. Many would likely have to close the business until they recover and then asses if the business could be revived or if there is any business left to sell.

Business Overhead Expense (BOE) can help business owners protect their business and employees if the owner needs time to recover from a serious illness or injury.

If a small business owner suffers a disability and is unable to work, it not only affects the business, it impacts all of the employees as well. Many small businesses are tight-knit families who rely on each other for support. If the business is unable to produce because of the missing owner, the employees may have to start looking for new opportunities.

The BOE Answer

The need is simple to set up: Many small businesses cannot survive without consistent production, and the owner is the primary producer. (Dentist, CPA, Attorney, Physician) What happens to the business when something happens to the owner?

The answer: Business Overhead Expense (BOE) Insurance.

A BOE plan helps to keep the business in operation in the event the owner becomes disabled and couldn’t work for a period of time. BOE reimburses the business for all their fixed operating expenses in order to keep the doors open while the owner recovers from an injury or illness.

This assures there will be a business to come back to once recovered. If a major illness or accident prevents the owner from coming back to work, there will still be a business to sell that has not depreciated because of the owner’s absence.

Also, BOE allows for tax-deductible premiums when insuring for the potential disability of the self-employed person. Often, small business owners are candidates for short-term and/or long-term DI as well.

Speak with your business owner clients today to see how you can help them protect the most important asset they have, their business. Please contact your CPS Disability Income Marketing Manager to start planning your client’s BOE plan today!

Creative Financial Services No Comments

Trumping Repeal: The Sales Shouldn’t Stop!

Robots have rules to live by; or so we were first told by author Isaac Asimov in his 1942 science fiction short story, Runaround.

His Three Laws of Robotics dictated:  1) A robot may not injure a human or allow a human to come to harm.  2) A robot must obey the orders given it by humans except where such orders would conflict with the First Law.  3) A robot must protect its own existence as long it does not conflict with the First or Second Laws.

If only all things in life were attended by such an uncomplicated litany to guide behavior.

In two articles we have addressed the brouhaha surrounding the future of the federal estate, gift and generation-skipping transfer tax laws under the  new administration, including discussions on the likelihood of repeal and what might be left in their place if repeal was accomplished.

The heart of matter for insurance advisors is the effects any changes will have on the volume of large-case sales where coverage is purchased to pay unavoidable anticipated death taxes.

And the good news is that not much changes if “anticipated” means what might be expected rather than simply the levy under the current loi du jour within the Internal Revenue Code.

Consider our suggestions for rules by which to conduct your business in the unchanged fluidity of the laws by which we must attempt to help clients best plan for their financial affairs.

The Six Semi-Unassailable Principles Of Life Insurance In A Changing Tax Environment:
  1. The Rule of Law is gone.  Nothing is permanent.  Don’t ever plan for a client based on the current tax law, but rather on the worst that might be anticipated.
  2. Chances are a client’s insurability will not improve with time.
  3. Chances are that many of the current favorable product designs for policies will be unavailable with time.
  4. Chances are the cost of coverage will increase with time.
  5. In view of Principals, ##1-4 existing coverage held for anticipated death tax liability should not be surrendered because of current favorable tax law changes.
  6. In view of Principals ##1-4 the purchase of coverage to pay death taxes should not be postponed because of a current favorable change in the tax law.

The story goes that a hopping-mad Asimov came out of his first viewing of the film 2001: A Space Odyssey in which the mainframe computer, HAL, did away with one of the space station’s astronauts. To the surrounding crowd in the theater lobby he excoriated the film’s director, Stanley Kubrick, saying, “He broke the first rule!  He broke the first rule!”  One bystander replied, “Why don’t you just strike him dead, Isaac?”

Contact us for a brand-able and free two-page summary of the possibilities regarding changes in the tax law that would be helpful in your discussions with concerned clients.