Thursday, August 28, 2014

What Women Want

Although women comprise 50.8% of the nation’s population¹, some financial professionals are still overlooking this powerful market. If you haven’t worked with many female clients or you’re not targeting them as prospects, you’d be wise to readjust your focus, especially after pondering these intriguing statistics:

  • When their spouses die, experts estimate that 70% of women change their insurance or financial professionals within a year of being widowed²
  • Women control 70% of household purchases³
  • The majority (60%) of women are the primary household breadwinner⁴ 
  • 29% of women earn more than their husbands⁵

So what do women want from their retirement or financial professional? Keeping the following information in mind when prospecting for or working with women clients.

  • Always grant women the same courtesies and respect you extend male clients. Look women in the eye and never talk down to them.
  • Listen, and listen well. Women want to know they’ve been heard, so be sure your responses acknowledge the concerns they’ve voiced. Try saying things like, “So base on what I’m hearing, your biggest concern is…” or, “It sounds like you’re describing a fear that you’ll [outlive your money, become widowed, etc.]; is that correct?”
  • Many women need to trust you before they’ll do business with you, so nurturing relationships with female prospects may take longer. Your performance history and credentials might not be enough to seal the deal, so focus on earning trust instead of self-promotion. 
  • Women often do their research before making any big-ticket decisions. You might help by providing accurate and detailed information on the insurance products under consideration. In short, the more knowledge the buyer, man or woman, the more confident they may be in buying.
  • Women have a greater life expectancy than men,⁶ so they may tend to be interested in products designed to address longevity, like annuities or long-term care insurance. Therefore, it can be important for you to talk to women about maintaining their lifestyle in retirement — especially given their current situation (whatever that may be), and offer solutions designed to help them reach their individual financial goals. 

¹ United States Census Bureau: 
² Kristan Wojnar and Chuck Meek, "Women's Views of Wealth and the Planning Process: It's Their Values That Matter, Not Just Their Value," Advisor Perspectives, March 2011, as reported in “Fidelity® Provides Information and Tools that Help Advisors Design Action Plans to Deepen Relationships with Female Clients,” Fidelity: 
³ “Women in the Labor Force: A Data Book, February 2013,” U.S. Bureau of Labor Statistics: 
⁴ “The 2013 Allianz Women, Money and Power Study”:  
⁵ “Labor Force Statistics from the Current Population Survey,” U.S. Bureau of Labor Statistics. Last modified 24 March 2014: 
⁶ “U.S Life Expectancy Map: The Gender Gap,” National Geographic:  

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

Thursday, August 21, 2014

Carpe LIAM: The Ideal Time to Offer Your Clients a Complimentary Life Insurance Checkup

While we can’t know what the future holds, we do know that an awful lot of change — minor or significant — can take place in any given year. Odds are good that the changes many of your clients have experienced over the past 12 months have also reshaped their life insurance needs, whether they realize it or not. So, as this September’s Life Insurance Awareness Month (LIAM) approaches, why not put its momentum to work for you and your clients by seizing this opportunity to offer your clients a COMPLIMENTARY life insurance checkup or review?

Your professional experience can prove invaluable when it comes to making potential adjustments to a client’s life insurance coverage, so instituting complimentary annual life insurance reviews with all of your clients could be a win-win situation. Leverage LIAM to heighten awareness, and you may be surprised by how many clients — and prospects — will take you up on your offer for a complimentary checkup of their insurance needs.

Here’s a quick list of life changes to consider exploring with your clients:
  • A marriage, divorce or separation
  • The receipt of an inheritance or financial gift
  • Any serious health issues affecting either spouse
  • The birth or adoption of children or grandchildren
  • Updates on their retirement health plan 
  • A need to provide a parent with health care, financial help or other assistance
  • Buying a new home (or conversely, losing a home)
  • Securing home refinancing or a reverse mortgage
  • Long-term care needs for family members 
  • Changes in their employment situation — including promotions and severances
Providing virtually anyone with a complimentary annual life insurance checkup will help strengthen your brand and your bottom line, since not only does it let you actually show your clients how much you value and care about their needs, but it can also lead to increased earnings as well as a possible surge of new referrals from your very satisfied clients.

LIAM is just around the corner! Click here for a COMPLIMENTARY Life Insurance Checkup Tool you can use to drive client and prospect meetings.

For financial professional use only. Not for use with consumers.
PAIS 02072214

Thursday, August 14, 2014

Documentation Is Important in Every Step of the Sales Process

When working with clients, there’s going to be a great deal of documentation. This is especially true during the application process. There are different factors that influence the documentation process, including state regulations.

The list below isn’t exhaustive for when the application is taken, so be aware of your state’s requirements.
Get copies of all sales materials.
Make copy of all the pages of the signed Annuity Disclosure at application.
Original sales proposals.
A copy of any needs analysis completed during solicitation.
Copies of all sales advertisements and materials used during the sales process.
Written corresponded to or from the contract owner, subsequent service of the contract, or issuance of the contract.
Documentation of phone calls.
Notes from all meetings with the customer.
A copy of the signed delivery receipt.

The reason all of this is important is because clarification is sometimes needed during the application process or there are errors that need to be fixed. When copies of documentation are taken, it becomes easier to make these corrections. Any changes should be made on the form and initialed by the customer. Then make copies of the changes in documentation, as this may need to be produced later for the regulator. It’s best to be over prepared.  If changes are made, clients should also be provided with any applicable copies as well.

Each state has different regulations regarding the length of time client documentation is maintained. Be sure you understand and follow the regulations for your state and license. General rule of thumb is to maintain all active client files indefinitely and all of your inactive files for at least seven years.

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

PAIS 1407028

Thursday, August 7, 2014

Practice the Four “D’s” to Better Manage Your Time

As you develop a plan for each week, purposefully decide how to allocate tasks across the days. Practicing the four “D’s” can be a useful way to manage your time.

*Do it. This task needs to be done. It's important and urgent.
*Delegate it. Delegation is one of the most talked about yet underused time management techniques. If done well, delegation allows you to potentially train others and it frees up your time for more important tasks. If done badly it can increase burnout, absenteeism and reduce work morale.
*Dump it. This task is not important. These types of tasks are likely to have been on your to-do list a few days and are not likely to be done.
*Defer it. Do this with a task that needs to be done, but does not need to be done today. The danger of deferring important things is that they will become urgent — this can increase your stress. Make sure that you are using a planning tool that schedules or reminds you when it needs to be done.

For financial professional use only. Not for use with consumers.
PAIS 01071714

Thursday, July 31, 2014

How Does Life and Annuity Product Indexing Work?

A market index is a statistical composite that measures movement in a particular index such as the S&P 500 or Dow 30. The use of crediting interest based on the movement of an index has grown among a variety of life and annuity products as an alternative to purely fixed, guaranteed interest rates.

Although indexed insurance products don't participate in the financial markets or in any market indices, they can credit interest based on the movement of a select index. The specific interest crediting method is outlined in the contract provided by the insurance company.

One way to credit interest in a life insurance or annuity product is through fixed interest crediting, which uses a fixed interest rate for a certain period of time as set by the insurance carrier. The premiums remain in a strategy until the period’s end, and at the period’s end date, the premiums can be moved into a new strategy.

Another method is indexed interest crediting which calculates interest with a formula, based on movement in a stock market index or indices. However, the final interest rates are subject to certain limits controlled by the insurance company.

Usually interest is credited to an insurance contract based on upward movement of the index, typically subject to a limit. Another important factor to remember is that although interest is credited based on the movement of the index, the money is NOT ever directly invested in the stock market.

One of the products many financial professionals offer is fixed indexed annuities. Some of the components of fixed indexed annuities are:

  • During the accumulation period, the insurance company credits interest based partly on the upward movement of a stock market index
  • A guaranteed minimum interest rate
  • The annuity owner chooses withdrawal options, initial premium amount, income options, and interest crediting strategies.
  • Interest grows tax-deferred
  • Protection of principal during market downturns, as outlined by the insurance policy

Another product commonly used is indexed universal life insurance. Its components are:

  • The policy earns interest based in part on upward movement of a stock market index
  • Cash value not invested directly in stock market
  • A guaranteed minimum interest rate
  • Protection of principal during market downturns, as outlined by the insurance policy

All of this information and products can be used to help clients create enhanced retirement strategies for their future, while protecting their money from fluctuating interest rates.

Guarantees are backed by the financial strength and claims-paying ability of the issuing insurance company.


Thursday, July 24, 2014

Turning RMDs into Income for Life

There are times when one-size-fits-all is filled with advantages, but in terms of retirement, most clients are vastly different from one to the next.

At 70½, people are required to take minimum distributions (RMDs) from their traditional IRA, 401(k) or from other qualified money. They’re expected to calculate and withdraw the correct amount on their own or face harsh penalties if it isn't done correctly or on time. Most retirees follow the RMD path, but the question is whether it is right for them.

There are several issues with the RMD path, as payments start small and gradually increase as a person gets older. This could lead to an increased risk of the person's accounts running out of money faster than they expected. Plus, most people don’t know what the next 10 years of their life are going to look like. A financial professional can step in and help their client mitigate the longevity risk.

One option is to consider rolling the IRA into a lifetime income annuity. This approach may provide a higher amount of income than a RMD and there’s joint life payout for family members.* This option also eliminates market risk and clients know exactly what they’re getting, so they can plan ahead.

Because retirement now tends to last 20 to 30 years, clients need to plan for the future. It may mean looking at opportunities to address the longevity risk and using a lifetime income annuity or deferred lifetime income annuity to remove the risk of running out of money.

Tom Hegna is one of the nationally recognized coaches in the Partners Advantage Advanced Coaching and Business Building program. He specializes in simplifying retirement strategies so producers don't have to sell - they just show. He has the unique ability to pump up a crowd and give them easily digestible strategies to complex issues, using a variety of financial vehicles, such as annuities and life insurance. Tom can help change the way you manage your book of business.

*Annuity features may vary by product and may not be available in all states.  Guarantees are backed by the financial strength and claims paying ability of the issuing insurance company.

This blog is designed 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.


Thursday, July 17, 2014

Medical Underwriting and the Law of Large Numbers

Although medical underwriting is an art, based on a science, the actual rate class assessments are derived from the actuarial analysis of the law of large numbers. When an underwriter is making a medical mortality assessment, they are basing their assessment on the underwriting manual that will provide the life expectancy of that applicant. The assessment is based on categorizing the medical points of the case and aligning them with other prior applicants who have had like medical experiences. When added to the vitals of a case (male, female, family history, etc.), this assessment is then based on the carrier’s mortality experience of that grouping.

As a result, you get table ratings and flat extras that indicate the percentage increase in mortality for applicants with like medical history. If an assessment of Table D or Table 4 is received, that assessment is indicating that when this applicant is grouped with past applicants with like histories, the mortality rate is 200% higher than an applicant who has an average or standard mortality. A standard assessment simply indicates that the life expectancy is neither increased or decreased based on the applicant’s medical history and their life expectancy is at a normal rate.

The good news is Partners Advantage offers you the benefit of an in-house underwriting team to help you better navigate the underwriting process. We can help you put your next case on the right road. Give us call if you have questions or need underwriting assistance. Learn about our specialty services here.

PAIS 01052114