Thursday, February 27, 2014

A New Fixed Annuity Audience

For financial professionals, Baby Boomers may have been the key focus for the last 10+ years; however, those in younger generations now present a new sales opportunity.

One such younger generation is the Generation X age bracket, which are individuals characterized as those born between 1965 and 1980. In the next 15 to 20 years when the oldest of Gen X begins to retire, where will their retirement income come from? Gen Xers are acutely aware that Boomers will be well into their retirement years resulting in fewer workers paying into Social Security – potentially negatively impacting them directly.  With hard facts facing them, Gen Xers are pondering the question, “How will I fund my golden years?” Many in this demographic may now realize that their retirement income strategy requires a new approach and new tools.

This is where a knowledgeable financial professional can step in and reach out to those in these age brackets. One possible solution is fixed annuities. This retirement income solution is no longer labeled as only an “older person” retirement. Rather, it appears to be more of a benefit for Gen X than those individuals reaching retirement now.

There are several reasons why fixed annuities may be valuable, and therefore attractive product options, to the Gen X audience, including:
  • Annuities provide a combination of principal protection
  • Locked in interest credits
  • Tax deferred interest as long as no withdrawals are taken out during the surrender charge period.

For the person in their thirties, if they start up a fixed annuity today, it is the opportunity to build an attractive retirement income over several decades.

Informative insurance sales presentations are the best way to raise awareness about the benefits associated with annuities for Gen X clients. Make sure to relate to this audience by utilizing a variety of avenues as a way to inform, connect, and ultimately make the sale.

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


Thursday, February 20, 2014

Designing an Indexed Universal Life Insurance Policy - 5 Easy Steps

If your clients want their premium dollars to provide balanced protection and value, and create the maximum potential amount of annual loans in retirement, following these steps in designing their life insurance policy could help your clients achieve their goals:

  1. Determine how much life insurance your client needs or wants, and how much money your client wants to put into it.
  2. If it’s a lump sum and your client wants to take tax-free loans and withdrawals from the cash value, either spread the lump sum out over several years or use a premium deposit account so that the policy is not a MEC (Modified Endowment Contract).
  3. Utilize software provided by the carrier to solve for the smallest amount of insurance that meets the client’s protection needs.
  4. See how much of an annual loan the illustration projects as being available in retirement. Remember that this is based on the interest rate you assumed in the illustration. Disclose to your client that the amount available will depend on how the policy actually performs.
  5. Make sure the policy doesn’t lapse.

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

Policy loans and withdrawals reduce the policy’s cash value and death benefit and may result in a taxable event. Withdrawals up to the basis paid into the contract and loans thereafter will not create an immediate taxable event, but substantial tax ramifications could result upon contract lapse or
surrender. Surrender charges may reduce the policy’s cash value in early years.
The information presented 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.

PAIS 01011714

Thursday, February 13, 2014

Obtaining Your Series 65 license

Seize the opportunity to help your clients and sales by obtaining your Series 65 license. Sure, we understand that investing time and money to study for a securities exam isn’t the first thing that comes to mind when thinking about ways to boost your sales. But let’s face it, without your Series 65 license, you can’t give your clients investment advice pertaining to securities and mutual funds, nor can you offer them a financial plan. Many clients have mutual funds that are no longer suitable for their retirement plan, as assets in these mutual funds could be better situated in an insurance product. But your hands are tied, since you aren’t Series 65-registered and are therefore prohibited from discussing investments with your clients.

DOWNLOAD the full article here.


Thursday, February 6, 2014

Finding Your Client's "Nagging Concern”

Trust can be one of the biggest issues financial professionals deal with on a daily basis. Lack of trust can be a key inhibitor to sales success. The reason is most clients are rarely impressed by a dazzling sales presentation. They want much more.

So, what can be done to get past the lack of trust?

The first step is realizing that there’s no “easy button” to magically connect with clients. Rather, it’s a combination of hard work and spending time listening to what they really care about, discovering their nagging financial worries and addressing their concerns, because they often have a core financial question. It also means realizing that your first attempt might not be successful. Some clients take time to develop trust.

The other issue that isn’t usually easy is discovering a client’s nagging concern, especially when they have not articulated it yet. Younger clients may not be thinking about retiring yet or worrying about their child’s college experience. This is where a financial professional can provide direction and forget about selling financial products. The goal is to find out what truly motivates the client. It means listening to their situation and then pointing them toward a long-term financial strategy – providing them with a variety of ways to get there.

A successful financial professional will take the time to unearth the deep-rooted financial concerns of their clients. However, once the nagging concern has been successfully uncovered, you may be on the road to building trust and truly serving your client's needs.

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