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Thursday, October 16, 2014

Taxes/Market Volatility/Assured Income

Whether your clients realize it or not the income tax environment has already changed for the years ahead. The Bush era tax cuts have ended. Income taxes have reverted to historically high levels.  The top marginal rate for those married and filing jointly is 39.6%. The top marginal rates for state income taxes are as high as 9%-11% for many highly populated states. This double hit could create an overall tax bite near 50% and could send many investors searching for shelter. Capital gains tax is potentially as high as 20% for affluent investors while non-qualified dividends are taxed as ordinary income at top marginal rates. In addition new excise taxes designed to fund Medicare increase the effective capital gains tax for high income investors to about 24%.

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.
Accumulated values:

Deferred                      $519,732
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.

For financial professional use only. Not for use with consumers.
PAIS 05080114

Thursday, October 9, 2014

Explore a Robust Suite of Website Services to Help Grow Your Business

Today, business moves at the speed of the clever little computer/radio/TV/phone you carry in your pocket. Smartphones and tablets are improving almost exponentially, as is their ability to allow businesspeople to review, operate, and even grow their businesses through a variety of platforms, apps, and tools.

As a busy life and annuity professional, you have the right to expect the best from the technology you rely on to manage and advance your business, and Partners Advantage certainly delivers. From their dynamic and robust website, you can find practically everything you need to stay competitive and profitable in this breakneck business, including...
  • 24/7 access to unique sales tools including life and annuity customer presentations, the Retirement Income Gap sales tool, a systematic sales process and seminar system, and much more to help you grow your business.
  • A complimentary iPhone, iPad, and Android app that lets you do business from the palm of your hand! This new feature allows you to:
    • Monitor all your Partners Advantage business from your tablet and/or smartphone
    • Get alerts on products and rate changes
    • Run quotes
    • Link directly to the Partners Advantage blog and social media for great sales insights
    • View case studies and details
    • Access appointment videos
    • Search for cases or updates on carrier appointments
    • Contact your Brokerage Director for sales support
    • Much, much more! To see what this revolutionary app can do for you, click here to watch a quick video demonstration.
  • Exclusive, ongoing, and live online life and annuity sales training with the My Training Partners weekly program
  • New and innovative sales tips and techniques on our blog.
  • Outstanding sales and production support, coaching, and mentoring from our seasoned staff, available from 7:00 a.m. to 7:00 p.m. CT every business day
  • One easy-to-access location for online contracting and contracting forms 
  • In-house compliance and suitability personnel serve as a resource for your compliance needs
  • News & Updates that cuts through the clutter to give you information that could potentially affect your business
  • An in-house underwriting team to help you reach even greater sales success
Interested in growing your life and annuity business to all-new levels of success?
Contact the seasoned staff at Partners Advantage today to learn how you too can benefit from their powerful tools and training!

Call 888-251-5525, Ext. 700 today!
PAIS 04081214
For financial professional use only. Not for use with the public.

Thursday, October 2, 2014

5 Questions to Discuss with Every Client

Your current book of business holds a great deal of potential — potential not only for you to generate more sales, but also potential for your clients to address any gaps in their retirement strategy with your professional guidance.

Asking your clients the following questions and then carefully listening to their responses may provide you with an opportunity to begin the sales process for life insurance, annuities, etc.

1. How long has it been since you performed a beneficiary review of your life insurance and other benefits? It can be important to do this regularly. You might discover that you don’t have beneficiary designations where you thought you did or other issues that could be problematic for you.
2. When you think of tax-efficient legacy strategies, how much savings or assets would you like to pass on to your beneficiaries?
3. When you think of tax-efficient estate planning, how might financial products (such as insurance) help pass assets on to your beneficiaries?
4. What are your concerns regarding the ability of your retirement savings strategies to meet your lifelong income needs?
5. In the event you need to help paying for a nursing home, assisted living or long-term care stay, how important is it for you to have insurance options that might help cover the costs?

For financial professional use only. Not for consumer use.

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 a fixed or variable annuity or for other similar purposes, you must hold the proper securities registration and be currently affiliated with a broker/dealer or registered investment adviser. If you are unsure 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 states in which you conduct business.

These questions are designed to encourage fact-finding with your clients and to provide general information on the subjects covered. Pursuant to IRS Circular 230, it is 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.

#1408057

Thursday, September 25, 2014

Put Your Next Case on the Right Road

In this industry, it seems as though some experienced professionals move at something of a breakneck pace, yet they do it all in a manner that appears effortless. So, what’s their secret? Of course, it's different for everyone, but for some their secret is a seasoned team of professionals backing them up. They may employ some staff of their own, but when working with a marketing organization like Partners Advantage, they can leverage added specialty services at no cost.

Underwriting Insights
The underwriting team at Partners Advantage is dedicated to helping you get more cases placed by:
Helping prepare your cases for a smoother review process and speedier feedback to your client
Working to identify an appropriate carrier to meet your clients’ needs and special circumstances
Offering thoughtful insights to assist your life insurance cases clear more green lights

Compliance and Suitability 
Partners Advantage has a full-time, in-house Suitability and Compliance Director to serve you. Our experience in this area can provide the know-how you need for cleaner cases and insights that can lead to a suitable sale. Our services include:
Guidance on suitability prescreening and post-submission requirements
Specific research on issues to help you better address case questions
Thoughtful insights regarding product replacement comparisons
Answers to your regulatory questions and concerns
Access to financial reviews to determine all carriers’ suitability

Advanced Markets Specialist
Work with our in-house advanced markets specialist to identify both the products and information that will be most helpful when presenting your clients with a big-picture strategies. Whether you’re working with a small business owner or helping a family work through more complex insurance and annuity strategies, our in-house advanced markets experience can help you bring together information and products to help you present better options.

For financial professional use only. Not for use with consumers.
1409009

Thursday, September 18, 2014

Connecting with Clients through Better Communication

Cutting through preconceived ideas, myths and misperceptions is a very important part of helping clients understand the value of your products. It’s important to understand where your client is coming from so you can present strategies to serve their needs. For your client, their PERCEPTIONS make up their reality.

It takes some time, patience and good communications skills to help them construct new perceptions. The goals and needs of your clients as well as the ways they best share and receive information may differ. So, understanding these differences and modifying your approach to each client can make you a more effective and successful communicator. It’s a cycle to find success – listen to client, understand needs, present options, listen to client. Don’t just explain the product, explain how a product or products can address their specific needs and the value provided for their situation.

Good communications skills help foster the client's trust in you and in the strategies you are suggesting they consider. With intuition and instinct, you can use the conversation as a way to understand both financial and personal goals of every individual. The personal life objectives are every bit as important as the financial ones and can have a large impact on the client’s overall plan. A good discovery process during the initial meeting, as well as yearly assessments are helpful to better understand your clients evolving needs.

You may not realize it, but you could be unintentionally eroding trust early on by making strong statements about the “right/best way” for prospects to manage their resources – with little if any understanding of their situation or goals. These pronouncements of the “right way” have the emotional effect of forcing the hand of the prospect – robbing them of their freedom to choose. Taking this approach and making absolute claims, such as these, could not only result in tension and create distrust but are also problematic and should be avoided.

Presenting options after you have asked questions and completed a detailed fact-finder helps build trust and help you address your client’s real concerns.

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

1409008

Thursday, September 11, 2014

Navigate the Waters of Mortality Underwriting and Clinical Assessment

Mortality underwriting and clinical assessment are certainly not the same (but we can say that they are close cousins). The purpose of a clinical assessment is to determine a diagnosis for an individual, treat that diagnosis, and then hopefully either resolve or stabilize that diagnosis. Mortality underwriting reviews a person’s diagnosis, treatment, and resolution (or stability), and then evaluates the claim history to determine the individual’s life expectancy. Therefore, underwriters are not attempting to make a diagnosis for an applicant — they are simply attempting to review the information provided by the physician and then put it against their claim history. In reviewing an applicant’s medical history, an underwriter uses his/her experience in reviewing and understanding medical terminology, procedures, and evaluations to assign the manual’s classification.

So… how does Partners Advantage underwriting help with this difference in concept? You have the benefit of access to an underwriting staff that truly understands mortality underwriting and the lay of the land of underwriting manuals. Talk to our underwriting staff to help you navigate the waters of mortality underwriting and clinical assessments.

Call 888-251-5525 to learn how our underwriting staff can help you!

PAIS 03081214

For financial professional use only. Not for use with the public. This material is intended for education purposes only, does not address individual circumstances, and is not intended to provide specific life insurance advice.

Thursday, September 4, 2014

The Power of Tax Deferral in Advanced Markets

Whether your clients realize it or not, the income tax environment has already changed for the years ahead. The Bush era tax cuts have ended. Income taxes have reverted to historically high levels. The top marginal rate for those married and filing jointly is 39.6%. The top marginal rates for state income taxes are as high as 9%–11% for many highly populated states. This double hit could create an overall tax bite near 50%, which could send many investors searching for shelter. Capital gains tax is potentially as high as 20% for affluent investors, while non-qualified dividends are taxed as ordinary income at top marginal rates. In addition, thanks to new excise taxes designed to fund Medicare increases, the effective capital gains tax for high-income investors rose to about 24%.

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 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 do rise.

Annuities are often a preferred type of financial vehicle in more aggressive tax environments. 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.

Accumulated Values
Deferred                   $519,732
In a 39.6% bracket $390,912
In a 25% bracket $434,428
Capital Gains         $438,212
 
Additional benefit-enhancing features of tax deferral include:
Helps avoid probate costs
Stretch tax treatment upon 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, as they also have the ability to reduce the risk of market volatility surrounding the retirement event. Annuities accomplish this with guarantees,* floors, lifetime income, and protective options.

Remember, if you want to talk annuities to your clients, talk about taxes first.

*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.

Annuities are insurance products backed by the claims-paying ability of the issuing company; they are not FDIC insured; are not obligations or deposits of, and are not guaranteed or underwritten by any bank, savings and loan or credit union or its affiliates; are unrelated to and not a condition of the provision or term of any banking service or activity. Product features vary by state and restrictions may apply, including possible withdrawal charges. Positive index adjustments may be limited to a monthly maximum or participation rate. Tax-deferred interest accumulation offers no additional value if the annuity is used to fund an IRA under current tax law; additionally, tax deferral may not be available if the owner of the annuity is not a natural person such as a corporation or certain types of trusts.

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

PAIS 04081314