Thursday, January 26, 2017

Smoothing Out the Volatility in Your Practice with Life Insurance

By Charlie Gipple, CLU,® ChFC® , Senior VP of Sales & Marketing

Consumers also appear to disagree with what the financial “experts” like Suze Orman and Ken Fisher say about annuities.  In fact, 78% of people who own annuities are satisfied with their access to their money.1 More than 80% of fixed annuity buyers are happy with their purchase2, which is a very high happiness factor among financial products.

Even in light of the challenges we face with the Department of Labor’s Fiduciary Rule, I am confident we will adjust and FIAs will continue to be a mainstay of our industry.  However, in the short run we will likely experience some changes with the FIA product line. For financial professionals that may have their businesses highly concentrated on FIAs, I would propose a way to “smooth out” the volatility in your practice. I propose Life Insurance!  If you don’t like underwriting, there are attractive Simplified Issue Life Insurance products.  There are also Single Premium Whole Life products and Single Premium Indexed Universal Life products, which offer an attractive alternative to FIAs, when the client doesn't need the money during their lifetime.  

I can comfortably assure you that if you know FIAs, it's not a very far leap to also learn and write IUL.  I have taken this leap myself and at the time I had less educational resources and support than what you have when you partner with a marketing organization with a strong training platform. This is what we at Partners Advantage specialize in - Education that Causes Sales. I encourage you to prepare for the future of our industry and continue to broaden your knowledge to truly serve your clients’ needs.  

Read the full article that first appeared in Retirement Advisor magazine in June 2016.
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Contact Partners Advantage for complete training and sales assistance at
888-251-5525, Ext. 700

For agent use only.  Not for use with the public.

* Guarantees are backed by the Financial Strength and claims-paying ability of issuing company. 

**Insurance and annuity products: Are not deposits. Are not guaranteed by a bank or its affiliates.  May decrease in value. Are not insured by the FDIC or any other federal government agency.

1Genworth The Future of Retirement Income Study 2014
2LIMRA Study – August 2012

Annuities are designed to meet long-term needs for retirement income. They provide guarantees against the loss of premium and credited interest, and the reassurance of a death benefit for beneficiaries. 
An income rider or benefit (sometimes called Guaranteed Lifetime Withdrawal benefits, or GLWB) is an additional feature available with some annuities and generally optional and come with additional costs. Income benefits are designed to provide income options above and beyond the standard annuitization or free withdrawal features in annuities. 

Pursuant to IRS Circular 230, Partners Advantage Insurance Services and their representatives do not give tax or legal 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. 

The information contained in this article is not intended to serve as tax or legal advice and is not intended to provide financial or legal advice and does not address individual circumstances.


Thursday, January 19, 2017

Dispelling Myths of the “Sweet Spot” in Underwriting

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

After spending 17 years working at life insurance carriers assessing large face amounts, the opportunity to move to the field presented itself and I jumped at the chance. The one observation that has been consistent can be narrowed down to one phrase: “What carrier is good at ___________”? (fill in any medical condition, avocation, aviation, etc., your choice!). My answer from both the carrier side and the field side has been the same…EVERYBODY! Everybody? Yes, everybody.

The majority of carriers use one or two of the available four reinsurance manuals. In addition, a few carriers may have some variances in which they can deviate a bit from the manual, but that happens after a carrier has shown a decline in a risk (either due to their mortality experience or new medical advancements). So if there are only a few manuals which all insurance carriers utilize, why do carriers market “sweet spots” or “niches”?

Perhaps the reason is related to how the carrier or product is positioned, perhaps how it is understood by the sales field, but whatever the reasoning, the end result is wanting to encourage you to think of their company when faced with certain underwriting issues. If you really give it some thought, you realize it is unlikely a medical condition could be a plug-in and go scenario. Why? In my 25 years of underwriting, I have never seen any two cases alike. In addition, physicians even have different interpretations or analysis of exams, conditions and treatment. Even in the case of twins with the similar DNA, they may not have the same medical condition and same treatment. So the question remains of how could a carrier indicate a sweet spot?

Individual life insurance underwriting is just that - individual. There is no cookie-cutter approach to medical conditions that can be applied to each and every applicant who has been diagnosed with that condition. No two clients are alike, so there is no set rule to evaluate their eligibility as if they are alike.

Do you have an underwriter with experience on your side? Partners Advantage can help. Read the full article which first appeared in Broker World magazine's November 2016 issue.
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Contact Partners Advantage for complete case assistance at 888-251-5525, Ext. 700.

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

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. Discussions of the various planning strategies and issues are based on our understanding of the applicable federal income, gift, and estate tax laws in effect at the time of publication. However, these laws are subject to interpretation and change, and there is no guarantee that the relevant tax authorities will accept Partners Advantage’s interpretations. Additionally, the information presented here does not consider the impact of applicable state laws upon clients and prospects. 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.


Thursday, January 12, 2017

Generational Split Dollar

By: Bill Jackson J.D., CLU®, Sr. Advanced Markets Consultant at Partners Advantage

Generational split dollar consists of a trust structured for the benefit of Generation C (age 27). This trust would own life insurance on Generation B’s (age 58) life. Generation A (age 88) would enter into a non-equity collateral assignment split dollar agreement with the trust. In searching for methods of discounting the value of a wealthy client’s estate, the concept of generational split dollar should not be overlooked. This is especially the case if the client is very old or perhaps uninsurable and wants to do some later life estate planning. For example, a Generation A client (age 88) makes a personal loan of $3 million to a grantor irrevocable life insurance trust established for the benefit of Generation C (age 27). The trust purchases a life insurance policy on the life of an individual in Generation B (age 58). The client receives a note which becomes an account receivable. This account receivable is worth less than $3 million due to the restrictive right to be paid back only at a future date out of cash values or at the death of Generation B. Because of Generation B’s expected longevity, and other factors, the appraiser values the note at $750,000. The result is dramatic estate tax savings relative to an outright gift of $3 million.

A recent court case, Estate of Clara M. Morrissette - United States Tax Court, the court ruled in favor of the estate. It is important to note that all current split dollar rules were followed meticulously. The trusts involved were likewise established for valid separate purposes. Therefore, if this design is executed correctly it can transfer significant wealth and provide a dramatic estate tax reduction. Care should be taken not to sell or cancel the policy, merge the trust with another trust with the same beneficiaries, or for the donor to have access to the cash values, as this could cause the transaction to be viewed as a step transaction to avoid taxation and therefore fail.

Read the full article: "Serving Clients With Estate Planning Needs" first published in the December 2016 Broker World magazine here.
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For financial professional use only. Not for use with consumers.

Policy loans and withdrawals will reduce available cash values and death benefits, and may cause the policy to lapse or affect any guarantees against lapse. Additional premium payments may be required to keep the policy in force. In the event of a lapse, outstanding policy loans in excess of un-recovered cost basis will be subject to ordinary income tax. Tax laws are subject to change. 

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.
Income tax free distributions are achieved by withdrawing to the cost basis (premiums paid), then using policy loans.  Loans and withdrawals may generate an income tax liability, reduce available cash value, and reduce death benefit, or cause the policy to lapse.  This assumes the policy qualifies as life insurance and is not a modified endowment contract.

Both loans and withdrawals from a permanent life insurance policy may be subject to penalties and fees and, along with any accrued loan interest, will reduce the policy's account value and death benefit. Assuming a policy is not a Modified Endowment Contract (MEC), withdrawals are taxed only to the ex that they exceed the policy owner's cost basis in the policy and usually loans are free from current federal taxation. A policy loan could result in tax consequences if the policy lapses or is surrendered while a loan is outstanding. Distributions from MECs are subject to federal income tax to the extent of the gain in the policy and taxable distributions are subject to a 10% additional tax prior to age 59½, with certain exceptions.

The tax and estate planning information contained herein is general in nature, is provided for informational purposes only, and should not be construed as legal or tax advice. Partners Advantage does not provide legal or tax advice. Partners Advantage cannot guarantee that such information is accurate, complete, or timely. Laws of a particular state or laws that may be applicable to a particular situation may have an impact on the applicability, accuracy, or completeness of such information. Federal and state laws and regulations are complex and are subject to change. Changes in such laws and regulations may have a material impact on pre- and/or after-tax investment results. Partners Advantage does not assume any obligation to inform you of any subsequent changes in the tax law or other factors that could affect the information contained herein. Partners Advantage makes no warranties with regard to such information or results obtained by its use. Partners Advantage disclaims any liability arising out of your use of, or any tax position taken in reliance on, such information. Always consult an attorney or tax professional regarding your specific legal or tax situation.


Tuesday, January 10, 2017

Partners Advantage and Peloton Global Announce Strategic Alliance


Partners Advantage and Peloton Global Announce Strategic Alliance

Riverside, CA (January 10, 2017) - Partners Advantage Insurance Services, LLC, a national insurance marketing organization headquartered in Riverside, CA, announced its strategic alliance with Peloton Global Distribution Services, Inc. (Peloton) of Newport Beach, CA. With this strategic business alliance, Partners Advantage will provide Peloton members with retirement solutions experience and Peloton will enable expanded growth for Partners Advantage in the arenas of long-term care and disability insurance.

"By working together, this strategic alliance will allow our two companies to enhance and expand our national platforms available to agencies and independent financial professionals," stated Partners Advantage President James Wong."

Peloton President Andy Holden stated, "Complimentary skill sets will create robust and exciting offerings to members of both entities.  And a shared emphasis on compliance, education and training will enable the organizations to experience rapid growth in selected sales initiatives.”

The evolution of a variety of factors, including more sophisticated products being introduced by carriers, continuous updates, and compliance demands within the industry led to the alliance which will bring impressive new training, technology, services and products to the financial professionals working with both companies. 

Partners Advantage places significant emphasis on training programs designed to improve and expand financial professionals' products, marketing and sales resources. The seasoned staff includes a full-time suitability and compliance officer, in-house underwriter and an advanced markets specialist. The company provides personal assistance by phone 12 hours each business day from 7 a.m. to 7 p.m. Central. The alliance will help financial professionals across the United States grow and stay on top of the cutting-edge developments in their field.

About Peloton Global Distribution Services®

Peloton is a consortium of elite individual organizations that are top performers within their industry.  By aligning with Peloton, members have access to the powerful synergy of shared market intelligence, world-class marketing and lead generation capabilities, extensive products, services, technologies, systems and a superior level of support to create unmatched performance in the insurance and financial services industry.  Peloton membership allows the individual member entities and the group as a whole to combine strengths in order to reach the highest level of competitive success. Membership includes some of the premier general agencies, valued specialty companies and innovative industry suppliers on a global level. To learn more about Peloton please visit:

About Partners Advantage

In business since 1993, Partners Advantage Insurance Services, LLC, is among the top national insurance marketing organizations in the country with associates located in offices across the United States. The company's Advantage Division is a one-stop brokerage for licensed agents and agencies throughout the United States who sell annuities, life insurance and linked benefit products. The company's Platinum and Premier Divisions work to enhance insurance marketing organizations and agencies throughout the country. The corporate headquarters for Partners Advantage is located in Riverside, CA. Regional offices are located in Huntington Beach, CA; Palm Beach, FL; Sioux City, IA; Ada, MN; Florham Park, NJ; Houston, TX and Henderson, NV. For more information about Partners Advantage, visit


Thursday, January 5, 2017

Charlie Gipple's Big 16 in a DOL Rule - Private Right of Action World

By: Charlie Gipple, CLU®, ChFC®       Senior VP of Sales and Marketing,
Partners Advantage

Questions are whirling around about the upcoming DOL fiduciary rule. Is it really going to go through? Will the new administration make changes?  Can we leave things the way it is now? These are all valid things to consider despite the fact right now the DOL rule goes into effect in April 2017. But what if it remains status quo?

What we need to remember that this is the third time in 11 years the fixed indexed annuity world has been faced with a rule or regulation that would be daunting. All three of these “rules” sought to effectively take the annuity products and plug them into a securities world. The NASD Notice went through in 2005, while the Rule 151A by the Securities and Exchange Commission was vacated in 2010.

Now the industry is faced with the DOL proposing the agents be held to a “fiduciary standard” when working with qualified money; a standard that, up until now, has been largely associated with securities sales via “fee-based advisory” platforms. Furthermore, for indexed annuity sales with qualified money, after April 10, 2017 an agent has to be supervised by a “Financial Institution.” 

What should IMOs and financial professionals ask during this “in-between world” of uncertainty on whether the DOL will go through or not? This is especially stressful for the IMO whether they file to be a “Financial Institution” or not.

Here is my “Big 16” of items an IMO looking to become a financial institution should consider. However, even if the IMO does NOT become a “Financial Institution,” they will likely still need to implement some of the below IF the DOL Rule were to go through. Why? The reason is whatever financial institution the IMO relies on will most likely still hold them accountable for certain things to share the liability in the “Private Right of Action” world.

Big 16 items to Consider:
  1. Product platform (those that abide by the “reasonable comp” rule)
  2. Agent background checks
  3. Field force training on “fiduciary matters”
  4. Web-based financial planning tools
  5. DOL compliance review for client and agent facing material
  6. Best Interest Contract creation
  7. Negative Consent: IE. Notice to “retirement investors” of the fiduciary status
  8. Fact finding, risk tolerance, software sales system for “uniform” recommendations from client to client with similar objectives
  9. Staff and systems for suitability review
  10. Email surveillance
  11. Website for data retention and disclosures
  12. Ongoing compliance (audits)
  13. Designate person to identify conflicts of interest
  14. Recordkeeping/file retention for six years
  15. Primary legal liability
  16. Technology for business issuance, review and case management
Looking at this list can be daunting, especially if you implement all of these items. The question for the IMOs is “do I assume the DOL will go through and I invest in this stuff or do I assume the DOL is not going to happen and thus not invest in it at all?”

In reality, every IMO principal needs to consider putting in place some of the “Big 16” items whether or not the DOL rule is vacated or not. Because most likely changes like what’s found in the DOL rule are going to come eventually. It’s where it’s wise to invest into the training resources, technology, compliance, holistic planning, etc. and put them into place no matter what.

This places urgency on many shoulders should the April 10, 2017 date become official. But it’s best to be prepared rather than wishing you had.

Looking to find out more about how Partners Advantage can help you prepare? Contact me at 888-251-5525, Ext. 358.

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

Discussion of the Department of Labor (DOL) fiduciary rule is based on the information available from the DOL, pending litigations, and other sources deemed to be reliable as of the date this article was written. The views and opinions of author are subject to change as guidance from DOL becomes available and court opinions are published.

This article should not be considered legal advice and is intended for educational purposes only.


Wednesday, January 4, 2017

Partners Advantage Announces Move to Salesforce


Partners Advantage Announces Move to Salesforce

Riverside, CA (December 30, 2016) – Partners Advantage Insurance Services, LLC announced its customer relationship management platform will now be powered by Salesforce, the world's #1 CRM solution. The new technology platform is designed to allow Partners Advantage to better serve its distribution network, including independent financial professionals and agencies across the country. The system easily integrates with other software to help the company communicate effectively and operate more efficiently. It positions Partners Advantage to provide more data driven services and sales analysis for its customers in the years ahead.

The company's migration from its current system to Salesforce is now underway and will be completed by the end of January 2017. All year-end production reporting, commissions and sales related information will be processed using existing systems technology.

Very few interruptions in service are expected due to the move, except that the company's "Smart Search" system will be down for a few weeks during the system transition. Please contact your Partners Advantage case manager or brokerage director if you have any questions, concerns or additional needs during the migration.

"We are very pleased about our move to Salesforce and look forward to enhancing our operational effectiveness and providing improved analytics and business reporting to our distribution network as a result of the options available through this platform, stated Partners Advantage President James Wong." Technology leadership has long been a priority at Partners Advantage and Salesforce will allow us to continue as an industry leader.

About Partners Advantage Insurance Services 
Partners Advantage Insurance Services, LLC, is a national insurance marketing organization with 60 associates located in offices across the country. It is one of the nation’s largest marketers of life insurance, annuity and linked benefit products.  The company provides personal assistance by phone 12 hours each business day from 7 a.m. to 7 p.m. Central with several offices across the United States. The seasoned staff includes a full-time suitability and compliance officer, in-house underwriter and an advanced markets specialist. 
For more information about Partners Advantage, visit