Consumers often cite cost and convenience (or the lack of) as reasons for not having life insurance. Any agent worth their salt should be able to counter excuses they hear from the uninsured, but convincing people to part with their time and money can be challenging. Rather than trying to convince a hesitant consumer otherwise, a better approach might be to show that you’re saving them money and time.
How? You can employ Table Shaving to help save them money and Simplified Issue to save them time. We discuss both life insurance concepts below.
If everyone who wanted life insurance could qualify for the cheapest rates available, perhaps cost wouldn’t be as much of an issue. Unfortunately, consumers find that any number of health conditions (be it their own or related to their family history) and/or lifestyle factors can result in high monthly premiums.
For many, looking at the difference between what others might be paying and what they’re being forced to pay can be frustrating enough to walk away without a policy. This is why you should become familiar with the various table shave programs offered by insurance companies.
A table shave program is a way for applicants with certain health conditions to save money on life insurance premiums by meeting specific criteria and/or wellness targets. Not all carriers offer table shave programs and those that do have their own set of specific limitations, exceptions, and criteria. They’re typically used more for permanent life insurance policies, but a select few carriers also allow table shaving on term coverage as well.
A table rating can be triggered by anything (medical or non-medical) that increases the likelihood that an applicant will die prematurely. Those triggers can vary from carrier to carrier, but a few general examples are:
High blood pressure, cancer, diabetes, combined height/weight (obesity), poor family health history, sleep apnea, asthma
Mental illness, hazardous occupation, adventurous lifestyle, criminal record
Underwriting is more formulaic than fluid, which means an applicant with these, or other, impairments can be automatically rated up several tables. Table shaving offers a little more flexibility in the underwriting process for eligible applicants. Again, specifics differ from carrier to carrier, but there are a number of favorable health and lifestyle characteristics that can offset those impairments and improve an applicant’s rating.
Ideal Candidate for a Table Shave Program
Let’s say an applicant is overweight and works in a hazardous occupation.
The underwriter will most likely see these as unfavorable or risky lifestyle factors and give them a lower health class rating. This can result in higher premiums rates. However, the same applicant also undergoes routine wellness checks, exercises, and has a healthy family history. These favorable lifestyle factors can earn the applicant wellness credits that improve their health rating. The improved rating could save them hundreds of dollars each year on premium costs.
Due to all of the carrier-specific variations in table shave programs, you might need to do a little digging to find one that matches your client’s individual situation. But the potential discounts they offer could go a long way toward converting a potential client.
Like money, time is a valuable commodity these days. When a person wants something, they want it now. Not six to eight weeks from now. A Simplified Issue policy is a quick and easy way to get coverage without the medical exam or waiting period.
Granted, this convenience does come at a cost. The carrier is providing coverage without a medical exam to provide a clear assessment of the policyholder’s mortality risk. As a result, the policy is going to be more expensive than a traditional plan. Premiums are based on the amount of coverage and can range anywhere from a few dollars more to twice as much as a traditional term life policy. And coverage for most Simplified Issue policies typically maxes out at $250k.
Not everyone will qualify for a Simplified Issue policy. This is because the carrier is essentially “going in blind” by waiving the medical exam. The applicant will have to answer a series of detailed questions and submit additional personal information. This information is used by the carrier to determine whether applicants are “low-risk” enough to be approved.
The Ideal Candidate for Simplified Issue
A Simplified Issue policy is typically ideal for young, healthy people who have not previously carried a life insurance policy. Another advantage to both the consumer and agent is the quick turnaround time for these policies. The application process is fairly simple and can often take place over the phone. Typically, the application is approved or denied in a matter of days. Death benefits are available immediately after the policy goes into effect.
A few situations where a Simplified Issue might be ideal include:
- Starting a new job in a hazardous or high-risk occupation
- Traveling abroad or to a dangerous location
- Medical issue or procedure that makes a person temporarily ineligible for traditional term life insurance
- Someone who takes part in dangerous or high-risk hobbies
A Simplified Issue policy is far from the most ideal product available. However, it can be a good solution for those clients who value time above all else.
May is National Disability Insurance Awareness Month. The campaign was launched in part by the Council for Disability Awareness. It is used to educate wage earners on the importance of planning ahead should their income source be disrupted by an unexpected disability. Because many advisors and agents butter their bread with retirement planning and life insurance products, disability insurance is probably not a topic that comes up in too many client meetings.
But it should. If you’re asking why, the answer can be found within the annals of pop culture.
Dr. Steven Strange was at one time considered the top neurosurgeon in the world. That all changed one fateful night when he was involved in a fiery car crash. While Strange survived the crash, his hands—once skilled surgical instruments—were injured beyond repair. Despite months of treatment, his hands never fully healed. Dr. Strange would never perform surgery again. One tragic incident, one miscalculation on a windy, mountainside road was all it took to ruin a lucrative career.
Fans of the movie or comics know that Strange drained his life savings in pursuit of a remedy for his career-ending disability. Sure, he eventually stumbled upon an ancient mystic, gained superpowers beyond imagination, and has saved the universe a dozen or so times. But in the real world, the story of Dr. Strange would have ended with “drained his life savings.” Unless, of course, he had a good disability insurance plan
Assuming that none of your clients are superheroes, the following paragraphs (rooted in facts, rather than comic book fantasy) should illustrate the value of a private disability insurance plan.
Staggering Stats on Disability
According to the Council for Disability Awareness, at least 51 million working adults in the U.S. do not have disability coverage other than what is available through Social Security.
Roughly 48% of American adults would not have enough savings to cover three months of living expenses if something happened that prevented them from earning any income. This is an alarming statistic. Especially in light of a recent report that found nearly half of all foreclosures on conventional mortgages are caused by a disability or other medical-related setback. This is why agents and advisors should encourage their clients to consider adding disability insurance to their existing plan.
Far too many consumers believe (or at least hope) that Social Security Disability Insurance (SSDI) will be enough to keep them afloat if they become disabled. Data from the Social Security Administration reveals a much more sobering truth. At the onset of 2018, the average monthly disability payout was $1,197. That’s barely enough to keep the beneficiary above the current poverty level.
Why SSDI Isn’t Enough
Even the federal government discourages people from banking on SSDI should an injury or medical condition renders them disabled. The Social Security Administration gives a very strict definition of the term “disability.”
- You cannot do work that you did before.
- They determine that you cannot adjust to other work because of your medical condition(s).
- Your disability has lasted or is expected to last for at least one year or to result in death.
Furthermore, SSDI benefits are not available for those determined to be suffering from a partial or short-term disability.
Of those who meet those guidelines and applied for benefits, only about one-third were actually approved to receive payments. And those payments typically won’t start coming in until after the roughly six-month waiting period. Someone who is forced to live within those means for several years, if not permanently, can forget about setting up or holding onto any sort of retirement nest egg.
Life insurance provides a way to soften the financial blow that comes with a death (income loss, funeral expenses, medical/hospital bills). Clients need to know that disability insurance can provide the same protection. A personally-owned disability insurance policy, used with additional sources of income, can provide the insured with a sense of stability and security after becoming disabled. If the insured is able to return to the workforce, it can keep money coming in while they recover or learn a new skill. This can also be the key to avoiding asset liquidation or dipping too deeply into existing retirement or life insurance funds.
Developing a DI Plan
Several factors will determine the details of an individual personally-owned disability insurance policy. First, the policyholder’s current situation should be taken into account. How much income will they need in the event of a disability? What additional sources of disability income are available to them? How much can they currently afford to put toward monthly premiums?
Once those questions are answered, then you can start hashing out the finer points of the policy. How long must the insured be disabled before benefits kick in? How long they will receive those benefits? Most policies only pay until the insured turns 65.
An important component here is the definition of total disability. Carriers give a much looser definition of “disabled” than the government. Most look at whether the insured can perform duties related to their current job or skillset.
There are additional factors that will affect the overall policy. Do they want benefits for partial disabilities following a period of total disability? Do they want any rehabilitation expenses covered? Premium waivers, renewability options, the impact of inflation, and cost-of-living riders should also be a part of the conversation.
Be A Super-Advisor
The astonishing tale of Dr. Strange is perhaps the only example of NOT holding a personally-owned disability insurance policy working out for a person whose main source of income was taken away due to a disability. But he’s not real. And in the 12 years that May has been used to raise awareness about the value of disability insurance, the numbers suggest consumers are still slow to get the message. So, it’s up to you—Super Advisor/Agent—to the real hero here.
Next week, we’ll explore how liability insurance could have protected a science lab from litigation after a high school student touring the facility was bitten by a radioactive spider. Just kidding…
Last week we looked at how the emergence and evolution of biometric technology are changing the face of the life insurance industry. Through wearable devices, facial recognition software, and other biometric-based developments, many carriers are embracing the future. However, biometric tech is only ONE of the many game changers that agents and advisors should keep on their radar. Two other factors—one technological, the other social— could also impact your business.
Blockchain and Life Insurance
Where the Internet was the portal that brought the industry from paper-based to automated processing, Blockchain technology looks to be the next “big thing” in the world of finance and life insurance.
Blockchain is a virtual series (or chain) of blocks containing data. It was initially developed as a way to keep track of Bitcoin transactions. Whenever a transaction is made, a new block containing a timestamped and encrypted record of that transaction is added to the chain. Anyone involved in the chain can view the data in each block. However, no single party can alter, or tamper with the records. The transparency and security of Blockchain could be the solution to many of the industry’s problems that bog down the life insurance and finance industries. Specifically, blockchain can help with longer turnaround times and fraudulent claims.
Streamlining The Death Claims Process
When a person dies, the hospital enters all relevant information about the deceased into the chain. That information is then immediately available to all involved parties. The death claims process can be streamlined into a unified system that drastically reduces the burden for the beneficiary. What takes anywhere from two weeks to six months could be done in a matter of days using Blockchain.
Blockchain technology can benefit carriers by significantly reducing fraud risk. An estimated 10% of claim costs are attributed to fraudulent claims. As a shared, yet secure ledger, everyone involved in the chain can view and audit any updates in real time, making it much more difficult to falsify information or otherwise commit fraud within the network.
Like the innovations in biometric tech we explored last week, Blockchain is still in its infancy. That said, more and more carriers continue to adopt a beneficiary/consumer-focused approach to their business. This sort of streamlined and modernized systemcould easily become the next industry standard.
Marijuana and Life Insurance
Another real-world revolution that is already leaving an imprint on the life insurance industry is not tech-based but rooted in social change.
As of this year, more than half of the United States has passed pro-marijuana legislation. Legal reforms at the state level have resulted in widespread changes for multiple industries. This includes life insurance.
The way in which life insurance companies handle marijuana reforms is just as varied as the states that enacted them. Many carriers will still raise premiums or decline coverage for applicants who test positive for THC. Others are responding with more lenient policies of their own. However, nearly all still require applicants to undergo a medical exam that includes blood and/or urine tests.
More Options for Marijuana Users?
Regardless of why they use (medicinal or recreational), you should encourage your client to be honest when applying for coverage. This has less to do with the legal issues surrounding marijuana and more to do with health factors. According to a survey by Munich Re, only 29% of underwriters said their company classifies marijuana users as non-smokers. The majority of carriers out there do not differentiate between marijuana use and tobacco use when pricing policies. And despite alternate forms of use (edibles, vaping), there is little consideration given by carriers as to how the applicant consumes marijuana.
Frequency and reason for use can make a difference for some companies. How often does the applicant smoke? Is there a legitimate medical reason for their use? If an applicant admits to using for medicinal purposes or carries a prescription for medicinal cannabis, the carrier may base rates on the medical condition. For the recreational user, someone who uses a few times a month is going to get a much better rate than a heavy user. Either way, it’s likely that an applicant who admits to or tests positive for any use will pay the same rates as a tobacco user.
Life insurance carriers are individualistic in their reaction to the changing tide of marijuana regulations. Some are adjusting, while others still adhere to longstanding policies. Will pro-legalization lobbyists and changing attitudes see more carriers taking a relaxed stance on marijuana? That is a question only time can answer.
Biometrics and Life Insurance
There are currently an estimated 10 billion devices connected to the internet, a number that is expected to drastically increase in the near future. Rare is the consumer who doesn’t spend the majority of their day connected to the grid, via smart phones/homes/watches/etc. We love our gadgets and use them extensively in our daily lives, but almost every device on the market ultimately serves the same purpose—collecting data.
Life insurance carriers rely on personal data for underwriting purposes but collecting that information has traditionally been a lengthy process that involves medical exams and mountains of paperwork. Today’s “I want it now” society has given rise to a consumer base unwilling to wait the weeks (or longer) it can take carriers to approve a policy.
In fact, the 2017 Insurance Barometer Study published by LIMRA and Life Happens found that 51% of consumers surveyed listed “faster sign-up process” as an important factor when buying life insurance. That same study found 7 out of 10 respondents would be more likely to purchase life insurance priced by data and without a physical exam. The industry is responding by delving into the world of biometric data.
According to Munch RE, wearable tech (and the analysis of biometric data gleaned from these devices) has become the catalyst for change to the traditional underwriting process. Select carriers first started using biometrics a few years ago by giving wearable fitness monitoring devices (Fitbit, et al.) to new policyholders.
Programs like this are modeled after wellness initiatives, but also allow for quicker, cheaper, and, if the research is to be trusted, more accurate risk assessment. While not yet commonplace, several carriers are looking at biometrics as a way to improve consumer experience in a number of ways, including expedited policy approval and discounts/perks for health-minded customers.
The legalities and consumer confidence surrounding biometrics as it relates to life insurance are still being determined. It’s a given that any personal data used for policy underwriting (whether it be through traditional or tech-based means) is both necessary and submitted voluntarily. For agents and advisors, it will likely be more challenging to convince a Baby Boomer into allowing an insurance provider to track their physical activity than it would a Millennial. Concerns over who can access that data and what they’re doing with it might outweigh the enticement of policy discounts or third-party perks. Of course, when technology presents a problem, it can be quick to offer a solution.
A new product being rolled out by Lapetus Solutions uses facial recognition software to add an extra layer of security to the customer’s account and help mitigate fraudulent claims. The platform—Cronos—also incorporates biometrics in ways that go far beyond activity tracker-based programs. In addition to the enhanced security, Cronos’ facial analytics technology can scan a customer-submitted selfie, along with additional data, to predict individual life expectancy.
The company claims their product, which became available last year, can eliminate the need for physical examinations and provide quotes within minutes. Essentially, the software scans an image of the applicant’s face and extracts biological, physiological, genetic and behavioral information. This information, combined with other data, can—in theory—predict life expectancy and mortality risk more accurately than medical exams. Lapetus is also working on further innovations that could potentially identify early warning signs for various diseases and determine whether the applicant is, or once was, a smoker.
The jury is still out on how effective and accurate this technology truly is, and how heavily it will affect the life insurance industry as a whole. That said, this sort of innovative use of biometric-based tech is undoubtedly leading the industry into a brave new world.
Next week, we’ll examine other emerging social, technological, and industry-based trends that are changing the game for independent agents and advisors.
The Cambridge Analytica scandal has put Facebook on a roller-coaster ride of epic proportions. Concerns over how the social media giant handles the personal data of its users are reaching a fever pitch, with some high-profile users (Elon Musk, Steve Wosniak) joining the 1 – 10 Americans who have jumped on the #deleteFacebook bandwagon. Social media and tech experts have offered mixed reactions to how the company will emerge from the fray, but let’s be real – Facebook is not going anywhere. However, an overhaul of its business model could be on the horizon.
It’s safe to say that no one knows exactly how the unfolding Facebook situation will affect social marketing and advertising campaigns (if it does at all), so we won’t get any deeper into those woods. Instead, let’s look at an often-overlook social networking platform – Twitter.
Generally speaking, Twitter is not known as the “go-to” platform for lead generation or advertising. But it can be a valuable addition to an advisor’s toolkit, especially when used strategically.
When it comes to your social networking strategy, Twitter should not take priority over Facebook. New survey data from the Pew Research Center shows that 68% of adults in America use Facebook versus the 24% who use Twitter. And roughly 90% of those Twitter users are also on Facebook. Additionally, Twitter’s character limit and rapid-fire, real-time news feed presents its own set of challenges. So why bother?
The better question is “Why not?”
Honestly, there’s no reason you shouldn’t be active on Twitter. The Twitterverse is full of professionals (including your competitors), journalists, experts and influencers of all types. The platform can not only provide a direct connection to the latest trends and trendsetters, but also allows to take part in the conversation. Just make sure you’re careful about who you follow.
If you’re using Twitter as a business tool, you probably want to stick with following accounts that are relevant to you and your brand. Twitter’s algorithm makes suggestions based on your activity. This means that following and engaging with relevant accounts will lead to more of the same, thereby expanding your reach. Plus, it keeps your feed flowing with content that matters, rather than an endless stream of drivel. It’s also a good idea to reciprocate when someone follows you (as long as the account is legit and relevant).
Tweet to engage:
A tweet has a much shorter lifespan than a Facebook post, so strive to be as engaging and informative as possible. While you can’t expect each and every Tweet to go viral, you should post content that other users want to share. Ideally, you’ll use Twitter to drive traffic to your website. Tweeting links to landing pages, seminar registrations, etc. is good, but your primary focus should be on spreading those original and informative blog posts you’ve written (You are writing original and informative blog posts, aren’t you? If not, get to work!).
A prospect doesn’t need to follow you, or even have a Twitter account, to see your tweets, so this is a good opportunity to prove yourself a knowledgeable and trustworthy advisor (and generate new leads in the process). Including an image (photo, infographic, etc.) is another good way to make your tweet standout and increase engagement.
#Hashtags, when used properly, can organically increase engagement and improve click-through rates. They are used to categorize content and track topics that people are tweeting about or searching for. Hashtagging is not overly-complicated but can be tricky. Avoid using too many hashtags in one tweet and, to maximize effectiveness, make sure you’re dropping the “#” in front of a keyword(s) relevant to your post. Test the waters a bit and see how recently and frequently a hashtag has been used before including it in your tweet.
Be personable, yet professional:
Just as you would with LinkedIn or Facebook, your Twitter profile should be reflective of you as a professional. Use a clean, quality headshot for your picture and chose a handle that incorporates your name and that of your firm. Your bio should be short, to the point, incorporate keywords that pertain to your business and areas of expertise. Make sure to include an email address and link to your homepage as well. Like your tweets, a well-crafted profile will show a little personality and a lot of professionalism.
Twitter’s advertising platform is very similar to Facebook. Multiple types of campaigns are available, and each allows you to set the budget and length to fit your needs. Slightly different than an advertising campaign, Twitter’s Promote Mode automates the promotion of your tweets for a monthly rate.
Of the estimated 330 million tweeters out there, Twitter ads can be customized in a number of ways to help you hit the mark. Targeting options include gender, language, interests, behaviors, location, keywords and device.
While Twitter analytics don’t quite measure up to Google or Facebook, they still give a detailed look at engagements, impressions and clicks. This allows you to get an idea of what’s working versus what isn’t before deciding whether you should go back and tweak your targeting settings.
Is a Twitter ad campaign worth opening your wallet for? Maybe, maybe not. According to Statista, Twitter has far fewer users than most other social network sites but the number of adults who use the service has grown dramatically in recent years.
There are pros and cons when it comes to using Twitter, and those will vary depending on your specific target market. The majority of Twitter users are between 25 – 44 years old, earn $70K or more a year and typically access the site via smart phones. Keep this in mind when considering how much time and effort you want to invest into your Twitter account. You won’t reach nearly the number of potential clients as you would on Facebook or through an email campaign, but a solid Twitter presence can be a good way to supplement your business.
Great American Increases Rates
Great American has increased rates on the GreatFlex 6 fixed annuity as well as the SingleMax Ten FIA. The GreatFlex 6 rates are effective February 5th and the SingleMax Ten rates are effective retroactively to January 21st. Call for additional details.
Global Atlantic Increasing Rates
Effective February 5th Global Atlantic has increase rates on the SecureFore 3 fixed annuity and the Choice Accumulation FIA. Call today for an updated rate sheet.
Most term insurance is available in 5 year guarantee periods. AIG allows you to guarantee the term period by 1 year increments which means it can be customized to the clients needs. Available for download is an infographic that reflects the average cost of common expenses and the timeframes it takes to pay for them.
Metlife SIFI Designation
During the financial meltdown in 2007-2008 Metlife was designated as a systematically important financial institution. Metlife fought and won to not have a SIFI designation. The FSOC appealed the decision but last week asked that the appeal be dropped.
Legacy LibertyMark FIA
Legacy’s LibertyMark series of products offers competitive options for accumulation as well as income. The LIbertyMark series offers both 7 and 10 year options with capped and uncapped options. In addition to this it offers a proprietary index from Morgan Stanley that has an average annualized return of 8.97% over the last 10 years. Call today for additional details and state availability.
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5 Simple Things to Enhance Your Workshop Presentation
Agents and advisors still rely on workshops or seminars for their marketing efforts for one reason: they can work. However, if you find yourself getting a lackluster response during and after your workshops, consider these tips.
Pepper In Jokes (Judiciously)
Humor can be tricky when dealing with a wide audience. What’s funny to you may not be funny to others; in fact, it could be off-putting. However, a handful of safe— even corny—jokes, can liven up a dry presentation.
While a seminar is your chance to present information—in your style and voice—
an hour of one person talking will fatigue most people, even if the information is relevant. Keep your attendees active and engaged by lobbing out questions throughout your presentation. This can be in anticipation of the next slide’s information, as a pause between sections, or a check for knowledge.
Use A Co-Presenter
Not only can a co-presenter shoulder some of the work, it gives the audience another personality to latch on to. Definitely be clear on hierarchy—if you’re the principal presenter, do the work of a principal presenter. This co-presenter can also serve as a floater; eyes and ears throughout your presentation space. This can help corral attention forward.
When organizing a workshop, many advisors will offer a raffle at the end of the session. This can be good to keep butts in a seat for an hour, but it doesn’t necessarily keep them engaged. Instead, offer two or three raffles throughout the presentation. This helps to build momentum for your session and serves as a way to break up your information.
Use A Variety of Media
Ah, the old trusty PowerPoint—a reliable way to present information to a large group of people. Most PowerPoints stick to a steady rhythm of bullet points, blocks of text, and maybe a few charts or images. You can enhance your seminar by using different media, whether it’s more illustrative charts and graphs, relevant videos clips, or easel pad/whiteboard drawing. The more you can mix things together, the more live you can make things, the more your audience will feel engaged.
LMG Sunsetting Products
Legacy Marketing Group has announced that their partnership with F&G will be coming to an end February 18th 2018. The decision was based on a change in F&G’s strategic decision. Applications signed February 19th or later will be returned.
North American Contracting
North American has announced that it will be transitioning from a multiple relationship structure to a single relationship structure. The transition will be implemented in March 2018 and what this means is that both life and annuity product lines will be with one distribution partner.
There are a variety of ways to position a clients assets in order to provide enhanced leverage, yield, and tax benefits. The challenge is keeping up to date on all of the planning structures that are applicable to a clients situation. Available for download is an advanced markets guide with a variety of in depth information on planning structures.
The ED announced a profit in 2017 of $80.2 billion. While this is less than the $91.5 billion in 2016 it is still more than the average of $23 billion prior to the financial crisis of 2008.
Sentinel Personal Choice Annuity
Sentinel offers a highly competitive 5 year MYGA that boasts a 3.35% rate for most states. In addition to this the product offers a variety of additional riders for a reduction in the credited rate. Call today for additional details and state availability.
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American Equity Commission Change and LIBR Change
American Equity has announced some positive changes to their fixed index annuities and income rider options. They have announced a new commission option that offers a higher upfront commission. Advisors that like the lower upfront commission with two years of renewals will still be able to select that option if they prefer that. In addition to this American Equity has adjusted their income rider options to be gender based. Moving forward payouts will be different for males and females. After running several scenarios we have found that this often results in a higher guaranteed income payout. The new income rider does require new product training. Call today for details or to get a quote.
Equitrust Rate Change
Equitrust has announced a rate decrease to select fixed indexed annuities in their portfolio. The change will go into effect August 27th. Applications need to be into the home office no later than August 26th. Equitrust has stated that they will accept a faxed copy on August 26th to hold rates as long as the original is received August 27th. Call today to get an updated rate sheet.
Trusted Optimized Producer System
We have officially rolled out our TOP System. This project has been in development for the last year and is the only system of its kind in the industry. This system was designed to position you as the most trusted advisor in your community, the most knowledgeable, and the most highly rated and reviewed. Not only will this system build your brand but it will also generate a consistent stream of organic 100% exclusive client inquiries. We are hosting a webinar on this August 26th at 11:00 cst. Call today to get registered.
Voya Announces Sale of Life Insurance Policies
Voya Financial has announced the sale of $100 billion of existing life insurance policies. The sale includes roughly 170,000 inforce life insurance policies and will create around $200mm in capital. The move was made to create cash, improve profitability, and continue to focus on retirement products.
Symetra Survivorship Universal Life
Symetra has introduced a new competitive survivorship universal life policy. The product is extremely well priced and is designed for lifetime guarantees. In addition, it has competitive commissions and high targets as well as a $1mm premium limit so it’s great for 1035’s. Call today to get a spec sheet and quotes.
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Marketing Corner – Thursday, January 11th, 2018
It is finally 2018. The previous year was full of activity, significant changes to the tax code, and a lot of news. What will happen this year? Here are three things that could impact the financial landscape of your clients and prospects in 2018.
The GOP-led effort to change the federal tax code passed, and as of December 22, 2017, became law. Obviously, with something as large and cumbersome as our tax code, there are many different ways the changes could impact consumers, depending on their specific situations.
- While President Trump’s tax plan originally proposed four income brackets, the new law keeps seven, with adjusted income ranges. Most have been lowered.
- Current brackets: 10%, 15%, 25%, 28%, 33%, 35%, 39.6%
New brackets: 10%, 12%, 22%, 24%, 32%, 35%, 37%
- The law also gets rid of the personal exemption for years 2018 through 2025, but increases the standard deduction to $12,000 single/$24,000 joint.
- Alternative Minimum Tax (AMT) exemptions have increased to $70,300 single/$109,400 joint. The AMT has been eliminated completely for companies.
- The new law doubles the lifetime estate tax exemptions—to $11.2 million, single/$22.4 million, joint—meaning even fewer households will face estate taxes.
- The corporate tax rate was reduced to 21% from 37%. Pass through entities may enjoy specific deductions of up to 20%.
What does this all mean? Well for one, corporations may have more money for planning and profit distribution. With the reduction of the AMT, higher middle-class earners may have more income to address pressing concerns (like say fortifying their retirement plans). While estate tax exemptions may make it more difficult to target high net worth individuals for planning opportunities, there are likely other areas that can be leveraged, such as charitable donations and more efficient wealth transfer options.
A Bull Market
For many market forecasters, the issue is not a question of if, but when. When will the market face a correction? Over the last year, we’ve seen numerous market records broken. In 2017, the Dow Jones Industrial Average achieved four 1,000 point milestones. Around this time last year, the market finally cracked 20,000. Then March 1st it ticked above 21,000. Then in August, 22,000. On October 18th, the Dow jumped another 1,000. November, another 1,000. Just a few days into 2018, the Dow broke another record, cracking 25,000, closing at 24, 922.68 on January 4th. It can only go up right?
We are nearly a full decade into a very bullish market. Some market analysts are suggesting that a 2018 correction might not be too severe, but point to a flat year, when compared to the last few. Whatever the ultimate result, the risk is building in the market and at some point, it will break. This might be a good time for clients to allocate more of their assets into safe-money products.
The Federal Reserve
After nearly a decade of zero, or near zero rates, the Fed, under chair Janet Yellin began raising rates in late 2015 and then again in late 2016. Last year saw three rate hikes—one in March, one in June, and finally one on December 13th. Rates will likely continue to rise, even as Janet Yellin’s term expires. President Trump’s pick for the Fed Chair, Jerome Powell, seeks to maintain continuity with the current fed reserve approach of gradual rate increases. Outgoing chair Yellin, in her last press conference, indicated a projected three rate hikes for 2018.
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Athene PTE 84-24 Review Process
Athene has announced beginning this month they will begin reviewing a sample of qualified annuity applications. Athene is conducting the review to ensure that qualified annuity applications are in compliance of the DOL rule. As part of this review athene will be requesting a copy of the PTE 84-24 form for applications that are selected.
Great American Rate Increase
Great American has increased rates on three popular FIA’s. This includes the Index Protector 7, American Legend III, and the American Landmark 5. The increase is retroactive to December 21, 2017. Call today for additional details.
Bulls and Bears
Many consumers are enjoying the current bull market. Unfortunately it’s easy for many individuals to forget about what happens after a bull market. Which is why it’s important to have a balanced portfolio to mitigate the risk of a downtick in the market. Available for download is an informative piece that shows each bull market and the bear market that followed
Genworth and China Oceanwide Deal
Genworth recently announced that they are confident that the proposed deal will move forward. They believe that they are making progress and that they have a better chance than recent applicants of getting approval by the Committee on Foreign Investment in the United States.
Global Atlantic Lifetime Builder Elite
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