Tuesday, March 20, 2018

Tax Cut and Jobs Act (TCJA) Strategies

By: Bill Jackson J.D., CLU®, Director of Advanced Markets at Partners Advantage Insurance Services, LLC

Tax Cut and Jobs Act (TCJA); short for “An act to provide for reconciliation pursuant to titles II and V of the concurrent resolution on the budget for fiscal year 2018.” What a mouthful! I think we will stick with TCJA. One of the major areas of complexity in this new law, which is effective for 2018, is its application to pass through entities. 

As you may be aware, the top corporate tax rate has been reduced from 35% to 21%. However, with sole proprietors, partnerships, “S” corporations, and pass through LLC’s there is a 20% deduction on adjusted gross income.

The complexity arises in how and when the 20% deduction is applied. If the client has an “S” Corporation, only the distributive share is eligible for the 20% deduction. W-2 wages paid to principals are not eligible nor are guaranteed payments to the shareholders. 

To add to the complexity of this act, congress chose to limit the benefits of the 20% deduction for “service” organizations. If the business derives its income from personal service, the deduction is phased out at certain levels of adjusted gross income; so doctors, accountants, attorneys, financial professionals, real estate agents, and consultants must deal with the phase-out of the 20% deduction.   

For service organizations where the taxpayer is filing singly, the deduction is available up to $157,500 of adjusted gross income. There is a pro rata reduction up to $207,000 of Adjusted Gross Income (AGI) and over that amount the deduction is completely gone. If the taxpayer is married filing jointly, the threshold is $315,000 and the deduction is gone at $415,000 of AGI. If filing jointly, the spouse’s income is also included in determining the phase-out. 

Obviously affluent service business owners need help. Keeping income below the $315,000 threshold could provide a $63,000 deduction and save $17,640 in taxes for a pass through service business owner with and AGI of $315,000.

How can a service business owner reduce taxable income below the threshold? Most have fewer than five employees or may work alone. The ability to reduce income by buying a substantial depreciable asset is often limited. The only alternatives for reducing income are a qualified retirement plan or deductible interest payments on a loan based split dollar plan.

In the qualified retirement plan space, two options stand out. The most flexible option for a business that may have fluctuating profits is the SOLO K plan, which can allow deductions of up to $61,000 for owners over age 50. For businesses with stable profits, the defined benefit plan is a top choice. Deductions for this type of plan can easily exceed $170,000 each year for an owner participant. Several carriers like Lafayette Life, National Life Group, and American National offer plan design, plan administration, and funding media specifically designed for these plans. Options include annuities and life insurance.

With the loan based split dollar or dual loan strategy, the business takes a commercial loan and loans the proceeds to the owner to pay premiums on a personal life insurance policy. The policy is collateral for the loan and the owner pays interest at the applicable federal rate. The owner receives a higher level of protection for family and higher retirement income potential than with a traditionally funded plans. The business interest deduction often amounts to between $30,000 and $60,000.

These strategies can mean the difference between being able to benefit from the 20% deduction and not seeing any tax relief. To learn more about how these strategies work, and how they can benefit your clients, contact the Partners Advantage Advanced Markets Department at 888-251-5525, Ext. 361.

Did you miss the webinar titled, “Opportunities Generated by the Tax Cut and Jobs Act (TCJA)?” You can access the replay here >> Get Webinar On-Demand.

For financial professional use only. Not for public distribution.

Not to be used for consumer solicitation purposes. You should not treat any opinion expressed as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of opinion and experiences. Partners Advantage does not warrant or guarantee the accuracy or completeness of the information contained herein.  

Partners Advantage Insurance Services and their representatives do not give tax or legal advice. Accordingly, any tax information provided is not intended or written to be used, and cannot be used, by any taxpayer for the purpose of avoiding penalties that may be imposed on the taxpayer. Encourage your clients to consult their tax advisor or attorney.


Monday, March 12, 2018

Two Insurance Marketing Powerhouses Announce Merger


Two Insurance Marketing Powerhouses Slated to Merge 

Urbandale, March 12, 2018 - Two of the biggest Insurance Marketing Organizations (IMOs), AMZ Financial Insurance Services and Partners Advantage Insurance Services, announced today their definitive merger to further enhance and extend their insurance distribution network. The new company will be called Partners Advantage Insurance Services, LLC. The merger went effective March 1, 2018, with the companies planning to fully integrate by September 30, 2018.

The new IMO will operate out of four main office locations including three offices in California; Riverside, Irvine, El Dorado Hills; as well as an office in Urbandale, Iowa. The new company will have the breadth and reach to serve life, annuities and linked benefits at the absolute top levels. The CEO of Partners Advantage, Scott Tietz said, “With the merger, we believe we have created a robust IMO that can provide assistance to any agent, agency owner or IMO regardless of the insurance products they sell.”

“This merger is a critical piece in our long-term growth strategy,” said Allie Miller, Partners
Advantage President. “This is a very exciting time for us, and we believe that merging allows us to elevate the overall insurance industry with innovative financial products, technology,
marketing strategies, practice management and sales support, while still holding meaningful
relationships with our valued distribution partners.”

The merger will usher in a revolution in the independent insurance distribution marketplace and the new services provided through the company will result in greater efficiencies. “Our clients will continue to enjoy the same quality services.” Commented Joe Zuccolotto, Chief
Operations Officer of Partners Advantage. “We have been working together for months to
make this transition as smooth as possible for our agencies and agents.”

About AMZ Financial:
Founded in 2000, AMZ Financial is the only independent marketing organization with a proven track record in developing and distributing Indexed Universal Life products. To date, we have developed 10 products with the industry's most recognized life insurance carriers.

About Partners Advantage:
Partners Advantage is an independent insurance marketing organization and nationally
recognized leader in the life insurance, annuity and linked benefit products marketplace.

Press Release originally published in PR Newswire:

For financial professional use only. Not for public distribution.


Tuesday, March 6, 2018

The PILLAR System: An Exclusive Practice Management and Seminar System

The PILLAR (Partners In Life, Long-term care And Retirement) System is an exclusive practice management, and seminar system created by Partners Advantage and reflecting dozens of years’ experience and countless hours in the field with leading agents.

The PILLAR System packages content that Partners Advantage subject matter experts have tested and provided to Million Dollar Roundtable (MDRT) level financial professionals throughout the years. The system brings all the content together to help financial professionals, who work directly with Partners Advantage, generate more consultative sales. This complete sales, marketing, and seminar system uses a secure online training platform that comprises different educational modules, tools and resources to enhance your learning. These tools help you shift your mindset from products to solutions, from sales to service, and from scarcity to growth.

The content that will be taught is divided into 6 different categories. Each of the categories is a different “PILLAR.” 

Using a secure online training platform the company refers to as The PILLAR System Playbook, a 24/7 “Online University” that houses numerous tools and resources, helps individuals join the ranks of top insurance and financial professionals. Visit to learn more.

The Partners Advantage Brokerage Team can be reached at 888-251-5525, Ext. 700 for more information.

For financial professional use only. Not to be used for consumer solicitation purposes.

*Production results gathered from January-June 2016. Not all financial professionals in attendance experienced the same results and there is no guarantee of future success. The information provided is for your own practice management purposes and education.

Becoming a member of The PILLAR System may be dependent on various factors including but not limited to production requirement and "PILLAR" carrier contracts placed with Partners Advantage Insurance Services, LLC. Partners Advantage Insurance Services, LLC reserves the right to change the requirements of the PILLAR System at their discretion. Results may vary, this communication does not constitute an offer or guarantee. Participating agents will need to be properly licensed and may be subject to screening. Participating agents must adhere to all federal and state compliance and market conduct standards. Additional terms and conditions to be set forth in an agent agreement between Partners Advantage Insurance Services, LLC and the agent. 

All rights reserved, trademark pending.


Tuesday, February 27, 2018

Substandard Underwriting: Comorbid Impairments

By Lisa Morris, VP of Underwriting and Development at Partners Advantage

If you’ve ever been faced with a situation where your client has multiple medical or mortality impairments, then welcome to the world of substandard underwriting! 

There may be a few situations when the client has one significant impairment and a few other minor impairments that adds to the major issue, and may tack on additional rateclasses. But why? Some conditions are exacerbated or the mortality risk increased when they are together. As an example, let’s consider siblings. There are situations where one child acts worse when their other siblings are around. This is the same relationship of multiple impairments in which the additional, or increase in risk is due to the other being “around” — this condition is called comorbid impairments. Certain conditions have an added risk when they are combined with another. For example, due to metabolic concerns, a person with diabetes has an additional risk if they also have coronary artery disease because one condition can increase a person’s mortality risk when they are put together. 

For these situations, pivot to the Partners Advantage Underwriting Department so that they can assess and determine the items that may increase an assessment and just like comorbid impairments, sales and underwriting has something in common — its customers!

Don't forget to get your copy of the "4 Steps to an Effective Cover Letter for Life Insurance Applications" by VP of Underwriting and Development, Lisa “Lee” Morris. 

Do you have an underwriter with experience on your side? Partners Advantage can help. Contact Lisa “Lee” Morris at 888-251-5525, Ext. 199 or email

For use with financial professional only. Not for public distribution.

This blog is designed to provide general information about the subject matter covered. Partners Advantage Insurance Services and their representatives do not give tax or legal advice. The material in this blog is provided for informational purposes only and should not be construed as tax or legal advice. Guarantees and benefits are based on the claims-paying ability of the issuing insurance company. Keep in mind that most life insurance policies require health underwriting and, in some cases, financial underwriting. Each case is individually underwritten as the severity of medical conditions varies among individuals. Formal underwriting evaluation and pricing is based on the individual characteristics of each case.

Partners Advantage Insurance Services and their representatives do not give tax or legal advice. The material in this article is provided for informational purposes only and should not be construed as tax or legal advice. Guarantees and benefits are based on the claims-paying ability of the issuing insurance company. Keep in mind that most life insurance policies require health underwriting and, in some cases, financial underwriting.