Thursday, December 18, 2014

Protecting Yourself from Identity Theft

Nobody likes something taken from them, especially their identity. It could mean your entire life is taken from you. When thieves steal an identity, financial information is taken, including social security numbers, routing numbers, credit cards, and money. Creditors and financial institutions believe it’s you making the purchases or changes. This is a scary scenario and it takes significant time and money to clear up the “for cause” substantial debts, terminations, income tax reporting, and credit report, as well as the investigations into whether or not identity theft has occurred.

A licensed financial professional could be at greater risk of identity theft. The insurance license creates additional opportunities for thieves to steal large amounts of information and money. This has been an increased problem the past few years, as these imposters take the identities and related licenses to create huge losses and recovery nightmares for the victim agents and their carriers.

This is why it’s very important to take substantial precautions to protect yourself from identity theft. It means following these steps:
  • Being careful while providing personal identifying information.
  • Verify the legitimacy of the person asking for information before providing it.
  • Review personal information and appointments on state licensure websites on a regular basis.
  • Review the consumer credit report regularly.
  • Look for unfamiliar addresses in your history and inquiries from carriers, especially if you haven’t applied for an appointment with them.
  • Subscribe to a credit monitoring service.
  • Watch for address change confirmations received.
Taking extra precautions protects your identity from imposters. When this is done, the little bit of time protecting yourself is much less than worrying about identity theft.

For financial professional use only. Not for use with consumers.
PAIS 02111714

Thursday, December 11, 2014

The New IRA One-Rollover-Per-Year Rule Could Penalize your Clients

The New IRA One-Rollover-Per-Year Rule Could Penalize your Clients By: William H. (Bill) Jackson J.D.,CLU - Sr. Advanced Markets Consultant 

Beginning in 2015, you can make only one rollover from an IRA to another IRA in any 12-month period, regardless of the number of IRAs you own. The limit will apply by aggregating all of an individual's IRAs, including SEP and SIMPLE IRAs as well as traditional and Roth IRAs, effectively treating them as one IRA for purposes of the limit.
Trustee-to-trustee transfers between IRAs are not limited
Rollovers from traditional to Roth IRAs ("conversions") are not limited

Transition rule ignores some 2014 distributions
IRA distributions rolled over to another IRA in 2014 will not prevent a 2015 distribution from being rolled over provided the 2015 distribution is from a different IRA involved in the 2014 rollover.

The History and the case that changed it
Under the basic rollover rule, you don't have to include in your gross income any amount distributed to you from an IRA if you deposit the amount into another eligible plan (including an IRA) within 60 days (Internal Revenue Code Section 408(d)(3)). Internal Revenue Code Section 408(d)(3)(B) limits taxpayers to one IRA-to-IRA rollover in any 12-month period.  Traditionally this limitation was applied on an IRA-by-IRA basis, meaning a rollover from one IRA to another would not affect a rollover involving other IRAs of the same individual. However, the Tax Court held in 2014 that you can't make a non-taxable rollover from one IRA to another if you have already made a rollover from any of your IRAs in the preceding 1-year period (Bobrow v. Commissioner, T.C. Memo. 2014-21).

Tax consequences of the one-rollover-per-year limit
Beginning in 2015, if you receive a distribution from an IRA of previously untaxed amounts:
you must include the amounts in gross income if you made an IRA-to-IRA rollover in the preceding 12 months (unless the transition rule above applies), and
you may be subject to the 10% early withdrawal tax on the amounts you include in gross income.

Additionally, if you pay the distributed amounts into another (or the same) IRA, the amounts may be:
treated as an excess contribution, and
taxed at 6% per year as long as they remain in the IRA.

Direct transfers of IRA money are not limited
This change won't affect your ability to transfer funds from one IRA trustee directly to another, But make sure to use the carrier's paperwork and designate the FBO check for the benefit of the clients IRA. In this way your clients will be well served. If you have questions, call your partners!

For Financial Professional Use Only. Not for Use With The Public.

The above article is designed to provide general information on the subjects covered. Pursuant to IRS Circular 230, they are not, however, intended to provide specific legal or tax advice and cannot be used to avoid tax penalties or to promote, market, or recommend any tax plan or arrangement. Encourage your clients to consult their tax advisor or attorney.

PAIS 03120914

Issues Every IMO Principal Needs to Consider

If you’re an independent marketing organization (IMO) principal in the intensely competitive insurance industry, taking a moment to consider these three simple questions could lead to several new business opportunities; including expanding your company, developing a succession plan, improving your business’ value, finding an appropriate buyer if you’re looking to retire, and even more.

1. How has your revenue stream flowed over the past few years? Do you anticipate growth, stagnation, or declines in the next few years?
2. Do you have an established business succession plan?
3. Are you content with your role and income at the helm, would you like help steering your business to more prosperous waters, or are you looking to cash in and come to shore for one reason or another?

Whether you’re planning for today, tomorrow, or both, there are a number of options available to IMO owners if you’d like help expanding your business and/or crafting a smart business succession plan for the day you retire.

Request our white paper written by Partners Advantage CEO Scott Tietz. It examines options — including merging with another, often a larger IMO, selling a portion of your agency or partnering with another organization — in addition to discussing the many instances and circumstances in which these strategies are often helpful. Learn how Partners Advantage Premier can help accelerate your business growth.

Fill out my online form.

For financial professional use only. Not for use with consumers. PAIS 01111714

Thursday, December 4, 2014

Extravaganza of Excellence - Live Online

The Partners Advantage Extravaganza of Excellence is now in its 11th successful year bringing some of the industry's top speakers and trainers to financial professionals. It's a training event like no other where you can learn about some of the latest developments in the industry and repeatable strategies you can implement immediately to help boost sales in the new year!

Nearly 300 financial professionals and carrier representatives will attend the live, by invitation only event in Las Vegas on Dec. 16 and 17, 2014. Now you can experience some key highlights with an online pass to hear headline speakers and sales trainers.

Hear Tom Hegna, Anthony Morris and 6 other nationally-recognized professionals and trainers in the financial industry during the Partners Advantage Extravaganza of Excellence. Live via online streaming video.

Learn details here or call your Partners Advantage brokerage representative at 888-251-5525, Ext. 700.

Open to licensed financial professionals only. Not for public/consumer use.
PAIS 08111714

Thursday, November 27, 2014

Nail More Sales by Asking One Simple Question

This blog post was provided courtesy of North American Company for Life and Health Insurance®
By Rachel Perez, Sales Development Specialist

Being a multi-line insurance agent in the current industry can prove to be complicated. There’s so much to learn, and a lot on your plate.

It is understandable to sell what makes you comfortable; it can be difficult to spread yourself to another product. One thing to remember is that if you are able to sell a product, it is good practice to do a full review of all of your client’s insurance to make sure you don’t miss important gaps in their portfolio.

Life insurance is one of those important needs. An easy way to transition your conversation to life insurance with your client is by asking one simple question:

     “Where do you have your life insurance policy?” 

This question can open up many opportunities for additional sales and create higher retention in your book of business. It creates an open dialogue and trust between you and your client about their life insurance needs. When you are meeting with your client or talking over the phone, this question will give you the opportunity to complete a policy review.

The old saying goes that if the client isn’t buying life insurance from you, then they are buying it from someone else! Asking this simple question can help grow your business and build trust between you and your client.

NAM-2856 8/14

Thursday, November 20, 2014

Lifetime Gifts and Life Insurance - A Direct Approach (no trust required)

If you transfer a life insurance policy to a beneficiary, tax authorities regard the transaction as a gift. Under current gift tax rules, if you transfer a policy with a present value of more than $14,000 to another person, gift taxes will be assessed or the lifetime exemption will be used. However, the gift tax won't have to be paid until your death.

The amount of the gift tax will be far less than the amount of estate tax that would be due if your policy remained in your name and in your estate. This is because the policy proceeds are considerably more than the value of the policy while the insured is alive.

The client transfers ownership of his universal life insurance policy to his son. The value of the policy when he transfers it is $27,000. So there is $13,000 of gift tax impact. The face amount is $300,000 on death it now passes outside the client’s estate and income tax free to the beneficiary.

You can give away ownership of your life insurance policy by signing a simple document, called an "assignment" or a "transfer." To do this, notify the insurance company and use it’s form. There's normally no charge to make the change. Also, you usually have to change the policy itself to specify that the insured is no longer the owner.

After the policy is transferred, the new owner should make any premium payments due. If you make payments, the IRS might contend that you still own the policy and include it in your estate.

A more complex approach (attorney drafts the trust)

The second possible way to transfer a life insurance policy is to create an irrevocable life insurance trust and then hold the policy in trust. Once you transfer ownership of life insurance to the trust, you're no longer the owner, and the proceeds won't be part of your estate.

Why create a life insurance trust? 

  • You want to get the proceeds out of your taxable estate.
  • You want to exert legal control over the policy and avoid the risks of having an insurance policy, on your life, owned by someone else. 
  • You don't trust the beneficiary’s to pay policy premiums. 

The single client has two children in their twenties, who will be the beneficiaries. Neither is sensible with money. The estate is worth $7,000,000. The universal life policy has a cash value of $100,000 and will pay $1,000,000 at death. The client wants to be sure the estate will not be liable for additional estate taxes and does not trust anyone to pay the premium. The client decides to create a life insurance trust and transfers ownership of the life insurance policy to the trust. There will be an $86,000 impact on the clients’ lifetime exemption. After death, the trustee will handle the money for the children under the terms of the trust document.

To make this work…

The trust must be irrevocable.
The client can make annual gifts to the trust to pay premiums.
The client cannot be the trustee.
It must be established at least 3 years before death.
An attorney must draft the trust.

When recommending life insurance think outside the “client box”. Life insurance owned by relatives or a trust could result in a tax planning home run.

The tax and estate planning information contained herein is general in nature, is provided for informational purposes only, and should not be construed as legal or tax advice. Partners Advantage does not provide legal or tax advice. Partners Advantage cannot guarantee that such information is accurate, complete, or timely. Laws of a particular state or laws that may be applicable to a particular situation may have an impact on the applicability, accuracy, or completeness of such information. Federal and state laws and regulations are complex and are subject to change. Changes in such laws and regulations may have a material impact on pre- and/or after-tax investment results. Partners Advantage does not assume any obligation to inform you of any subsequent changes in the tax law or other factors that could affect the information contained herein. Partners Advantage makes no warranties with regard to such information or results obtained by its use. Partners Advantage disclaims any liability arising out of your use of, or any tax position taken in reliance on, such information. Always consult an attorney or tax professional regarding your specific legal or tax situation.

PAIS 04080114
For Financial Professional Use Only. Not For Use With The Public.

Thursday, November 13, 2014

Fixed Indexed Annuity Sales Soar as Benefits Resonate with Consumers

FIAs are helping many financial professionals and clients address potential challenges to generating retirement income. There are two parts to the retirement puzzle - accumulation and income. Consumers are looking for ways to grow and protect their retirement assets. Saving for retirement, also known as the accumulation phase, is one of the keys to building a sound financial future. However, it’s only one part of the retirement planning puzzle. Generating income from retirement assets is just as important as helping clients achieve their retirement goals for their golden years.

Fixed index annuities (FIAs) can provide a solution for conservative accumulation and the opportunity for guaranteed* lifetime income.  FIAs are unique in how they credit interest, which is based in part on an external index. At the end of the contract year, this can result in earning indexed interest, subject to a participation rate, cap or spread. Although an external index may affect interest credited, the contract does not directly participate in any equity or fixed income investments. This interest cannot be lost due to future index declines. If the result of the index goes down, no interest is earned, but the annuity’s value doesn’t decline. This assumes that there are no withdrawals. (Note that FIAs are subject to surrender charges and holding periods, which can result in a loss of premium.)

Given these key benefits, it’s no wonder FIA sales are skyrocketing to historic levels.1
Partners Advantage helps you leverage the opportunities with top shelf training, technology and service! Learn more by downloading our informational article for the financial professional: "Fixed Indexed Annuity Sales Soar as Benefits Resonate with Consumers."

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1 “LIMRA Secure Retirement Institute: Total Annuity Sales Grow 17 Percent in Fourth Quarter,” February 24, 2014, _Sales_Grow_17_Percent_in_Fourth_Quarter.aspx
^^ Principal is only guaranteed if no withdrawals in excess of the contract’s free partial withdrawal amount are taken during the withdrawal charge period. Withdrawals are taxed as ordinary income, and if taken prior to 59 1/2, a 10% federal tax penalty.
^^ Guarantees are backed by the financial strength and claims-paying ability of the issuing insurance company.

For financial professional use only. Not for use with consumers.