Thursday, November 27, 2014
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.
FOR AGENT USE ONLY. NOT TO BE USED FOR CONSUMER SOLICITATION PURPOSES.
Thursday, November 20, 2014
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.
For Financial Professional Use Only. Not For Use With The Public.
Thursday, November 13, 2014
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."
Fill out my online form.
1 “LIMRA Secure Retirement Institute: Total Annuity Sales Grow 17 Percent in Fourth Quarter,” February 24, 2014, http://www.limra.com/Posts/PR/News_Releases/LIMRA_Secure_Retirement_Institute__Total_Annuity _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.
Friday, November 7, 2014
The live event in Las Vegas is only open to special invitees, but you can have an opportunity to hear Tom Hegna, Anthony Morris and other top tier presenters in the financial industry during the Partners Advantage Extravaganza of Excellence all via live via online streaming video on Dec. 16 and 17, 2014. It's at incredible opportunity at to access all this at only $59. Register Here.
Learn about some of the latest developments in the industry and repeatable strategies you can implement immediately to help boost your sales in the new year!
Licensed Life and Securities Professionals Only.
This is a unique opportunity for you gain access to a national education event hosted by Partners Advantage Insurance Services and hear headline presentations including:
- Deferred Income Annuity Trail Blazer - Curtis Cloke
- Retirement Strategies Trainer - Tom Hegna
- Sales Concepts & Prospecting Trainer - Anthony Morris
- Million Dollar Roundtable Producer - Darren Ulmer
- NAIFA Board of Trustees President-Elect - Juli McNeely
- Leadership Speaker and eight time New York Times best-selling author - Don Yaeger
- CEO of The Money Finder - Stephanie Holmes-Winton
Register HERE for your Ticket to Attend. Special, Live Online Sessions: $59 (early bird special), registration goes up to $79 on Dec. 1. This pass will also give you an invitation to added free educational events in 2015. (link to registration page)
Open to licensed financial professionals only. Not for public/consumer use.
Thursday, October 30, 2014
Be sure to conduct a thorough needs review with your clients so their insurance needs can be met in retirement. They may need to adjust their coverage to gain life-long financial protection. Consider offering indexed universal life insurance as an addition to their package. If a client passes away, his or her spouse will need enough to continue living comfortably in the post-career life they planned together.
Review your list of clients approaching retirement, and schedule an appointment with them today.
Indexed Universal Life products are not an investment in the "market" or in the applicable index and are subject to all policy fees and charges normally associated with most universal life insurance.
FOR AGENT USE ONLY. NOT TO BE USED FOR CONSUMER SOLICITATION PURPOSES.
This blog post was provided courtesy of North American Company for Life and Health Insurance®
Thursday, October 23, 2014
Best of all, you don't have to reinvent the wheel. Partners Advantage can provide you with turnkey materials to help you get started. Also, there isn't a need to incur the high costs of providing a meal, an afternoon or evening session at a local library can provide a conducive environment for an informational sales seminar.
We can provide you with access to an impressive roster of consumer-reviewed seminar presentations that financial professionals may utilize for one-on-one client meetings or seminars with several clients and prospects.1 In addition, our Simple Solutions® Sales System gives you added materials and scripts to help you get fully prepared.
Seminar presentation topics include:
• Family Legacy
• Rethinking Retirement
• Roth IRA In Retirement Strategies
• Job Changers
• Effective Retirement Strategies for Women
• Women in Transition: Financial Strategies for Divorcees
• Women in Transition: Financial Strategies for Widows
Please note that in order to provide a recommendation to a client about the liquidation of a securities product, including those within an IRA, 401(k), or other retirement plan, to purchase an insurance product or for other similar purposes, you must hold the proper securities registration and be currently affiliated with a broker/dealer or registered investment advisor. If you are unsure about whether or not the information you are providing to a client represents general guidance or a specific recommendation to liquidate a security, please contact the individual state securities department in the state in which you conduct business.
There are also marketing materials for all the above sales presentations as well as client invitations.
Also, here are some tips to help you run your seminars:
- Work smarter, not harder by hosting an insurances sales seminar: Where else can you get a group of people in one room who could all potentially do business with you in one day? An individual typically decides in the first few minutes of meeting you whether they want to work with you or not. If you are successful in receiving appointments while at the seminar, you have just overcome one of the largest obstacles in this business.
- Build a multi-dimensional practice. Informational seminar and sales presentation that are based around a multi-dimensional practice is still the best marketing/sales idea we have. By partnering with qualified financial professionals, such as tax planners and estate planning attorneys, you may be able to provide access to more services, which can be appealing to clients.
- The above seminars are 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. Please note that Allianz, its affiliated companies, and their representatives do not give legal or tax advice. Encourage your clients to consult their tax advisor or attorney.
1Producers should review their state’s regulations and follow the approval requirements of the carriers they represent, and their broker/dealer or registered investment adviser, if applicable.
For financial professional use only. Not for the use with the public.
Thursday, October 16, 2014
The oval office and congress are trying to find new ways to stimulate the economy. Pre-retirement clients could find themselves trying to make money in a historically low interest rate and historically high tax environment. Compounding the problem is the fact that many experts think that interest rates will most likely trend upward in the future. So investing in a bond portfolio today could potentially place the pre-retirement client in the position of receiving low return coupled with a possible reduction of principal when interest rates rise.
Annuities are a preferred type of financial vehicle in a more aggressive tax environment. The table below illustrates the recognized benefit of tax deferred growth.
The Power of Tax Deferral
Let’s look at a $250,000 investment at 5% for 15 years.
In a 39.6%bracket $390,912
In a 25% bracket $434,428
Capital Gains $438,212
Additional benefit enhancing features:
• Helps avoid of probate costs.
• Stretch tax treatment on death.
• Availability of an exclusion ratio for retirement payments.
• Helps avoid the lost opportunity value of money paid in taxes.
• Potentially avoids bracket creep due to investment income.
Annuities could make sense in an aggressive tax environment. Annuities also have the ability to reduce the risk of market volatility surrounding the retirement event. Annuities accomplish this with guarantees*, floors, life time income, and protective options.
Remember if you want to talk Annuities to your clients, talk about taxes first.
*Guarantees provided by annuities are subject to the financial strength of the issuing insurance company; not guaranteed by any bank of the FDIC. Guaranteed lifetime income available through annuitization of the purchase of an optional lifetime income rider, a benefit for which an annual premium is charged.
This material is intended for education purposes only and is not intended to serve as the basis for any investment or purchasing decision. Pursuant to IRS Circular 230, it is not 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.
For financial professional use only. Not for use with consumers.