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Questions? Contact our Sales Teams at (949) 863-0700. Life Insurance - Option 1 / Annuities - Option 2 / LTC - Option 3 / DI - Option 4.

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The Life Insurance Triple Play

When you mention life insurance to your clients, chances are the first thing they think about is protecting their families in case they should die prematurely. Yet the reality is that they can face just as much risk by living too long.

What if they outlive their retirement savings? Or become unable to take care of themselves in their old age?

Life insurance with a long-term care (LTC) rider can help provide benefits for your clients whether they live or die.
 
The first benefit provided by life insurance is the death benefit: a source of immediate liquidity payable at death that can help provide income replacement, fund estate settlement costs and repay existing debts.
 
But the right kind of life insurance, properly structured, also generates a significant cash value. The potential cash value can be accessed at retirement via policy loans and withdrawals to supplement your client’s retirement income.
 
Finally, if the policy is purchased with an LTC rider, it can also provide funds to cover long-term care benefits, such as nursing home costs and/or skilled in-home nursing.
 
With such a policy, your clients have now covered three major risks: dying too soon, living too long and living with an impairment.
 
Contact your Life Sales & Marketing Associate today for more information.
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Underwriting Niches Lead To Opportunities To Place More Cases

We know how to elevate your sales. We are experts when it comes to new and innovative underwriting changes. We also know which carriers to recommend for your challenging clients.

Bottom line, we find ways to say “yes” to your cases.

We represent carriers that can offer:
  • Right away to individuals after treatment is completed for early stage prostate and breast cancer
  • Preferred Non-Smoker rates to your clients who use marijuana on a regular basis
  • Up to $3 million of term or permanent plan coverage to your healthy clients without any exam requirements, and can still offer their Super Preferred rates
  • Standard or even better to your clients with Type 2 diabetes
  • Preferred classes to your overweight clients
  • Preferred Best rates even if someone’s total cholesterol level is up to 300
  • Preferred Best rates for someone who is treated for depression
  • Preferred or better for your clients treated for sleep apnea using their CPAP machine on a nightly basis
  • Non-Smoker rates to your clients who smoke cigars or pipes or use tobacco chew on a regular basis (even daily) and have a positive specimen for nicotine
Contact the Life Underwriting Team – get some Preferred Best service as we help you with your next case!
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How LTC Insurance Can Lower Your Clients’ Tax Bill

How do you get people to sit up and take notice? Talk taxes. Tell them you have a way to help them reduce their state and federal tax bill.

A Long-Term Care Insurance (LTCi) policy has the potential to help people lower the amount they pay in taxes.

And at the same time, LTCi provides valuable insurance coverage that can help them remain in their home, protect their retirement nest egg and ensure they won’t have to rely on their kids to take care of them.
 
LTCi Premium May Be Tax Deductible
 
Each year, the federal government sets guidelines for tax deductibility. Individual policyholders may be able to deduct a portion of the premium paid for a tax-qualified LTCi policy. This is called eligible premium.
 
Business owners who use business dollars to purchase LTCi can also experience significant tax savings based on the tax structure of the business:
 
  • Self employed business owners may deduct eligible premium paid for the owner, spouse and dependents. They also may deduct the total premium or actual premium paid for employees.
  • Owner/employees of C Corporations may deduct actual premium for the owner/employee, spouse, dependents and employees.
Policy Benefits May Be Tax Free
 
Benefits received under a tax-qualified LTCi policy are intended to be tax-free as long as they do not exceed the greater of actual qualified LTC daily expenses or the IRS’ per day limitation.
 
Out-of-Pocket LTC Expenses May Be Tax Deductible
 
Generally any LTC expenses the policyholder pays out-of-pocket may be claimed as a medical deduction on a federal income tax return. The only exception is payment for home care provided by a family member who is not a licensed health care professional.
 
Some States Also Offer Tax Deductions
 
Currently a number of states offer tax deductions and/or credits for people who purchase qualified LTC Insurance policies. And these state deductions and credits are in addition to those offered by the federal government.
 
There’s No Better Time to Talk Taxes
 
Everyone is looking for ways to save, which is why now is a good time to talk to prospective clients about the tax advantages of purchasing LTCi. They’re sure to be more receptive when they learn that purchasing the coverage they know they need also can help them reduce their tax bill.
 
For more information, contact your LTC Specialist today.
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Not All Disabilities Are Treated Equally

If a severe disability struck, the kind where it’s impossible to perform life’s most basic activities without assistance, would your clients have enough income to get by?
 
Traditional income protection would provide approximately 60% of your client’s pre-disability earnings. However, your client’s expenses are likely to dramatically increase should a catastrophic disability occur.

By adding the Catastrophic Disability Benefit (CDB) rider to their individual Disability Income (DI) Insurance policy, clients could receive up to 100% of their pre-disability income to help cover expenses in those types of situations.

The rider offers a minimum monthly benefit of $500, up to a maximum benefit of $10,000 (depending on the client’s income). AND it is in addition to the base monthly benefit.
 
Together, the rider and base policy benefit replace a higher percentage of a client’s income to help them account for the extra expenses that often accompany a catastrophic event.
 
What’s Covered?
 
CDB benefits could be paid if your client is ADL disabled, cognitively impaired or presumptively disabled.
 
 
Contact your DI Sales Rep to learn more about income protection, and the advantages of the Catastrophic Disability Benefit rider.
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Don’t Let Business Clients Train Their Future Competitors!

Because that is what they are doing if time and money is spent cultivating a key employee only to lose him or her to another (in a similar line of business, no less) who offers more money.  Or worse, lose one who starts his or her own shop offering the products and services in which your clients made them so proficient!

“Oh, but I have a non-competition agreement in place,” they might say.  Consider: 1) This old form of “iron handcuffs” is proving decreasingly enforceable in most states, and 2) your client has still lost a valuable employee!

Consider instead some “golden handcuffs” that are the easiest and significantly beneficial fringe benefit that protect key people not just during employment, but for their entire life. 

Call it Super Executive Bonus:
  • Purchase permanent life insurance for a selected employee which he or she will own.
  • Include a long-term care rider on the contract.
  • Pay the premiums until retirement, overfunding it so that it will carry for life without further premiums.
The distinct advantages for your business client over other employee benefits:
  • There is no obligation to fund in any given year.
  • Premiums are deductible and are reported on the employee’s W-2.
  • There are no government reporting requirements or regulations.
  • You have provided an attractive triple post-retirement benefit that protects in the event of death, long-term care, or the need for available cash.

We will help design and present the Super Executive Bonus benefit for your client.  All we need to draft a preliminary proposal is the executive’s age, sex, assumed medical classification, tobacco use, and the state of sale.  Contact Tom Virkler, JD, Director of Advanced Markets, at 706-614-3796 or tom@cpsadvancedmarkets.com.

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Life Insurance For The Small Business Market Restrictive 162 Executive Bonus Plans

The traditional 162 Executive Bonus Plan is one of the simplest and most popular executive benefits offered in the small business market. The bonus is tax deductible and has few regulations and reporting requirements. This makes the Executive Bonus Plan extremely attractive to many business owners.

The bonus needs to be considered reasonable compensation in order for it to be deductible, but other than that, the business owner has complete flexibility.

Who is covered and the level of participation is completely discretionary, plus the commitment to the contribution can also be flexible.
 
Even with all of the positive attributes of Executive Bonus Plans, some employers continue to have concerns. Many employers are concerned about not having control of the asset (the policy), which is owned by the employee. The employer may feel that unlike other executive benefit plans, there is nothing to tie the employee to the company, no “golden handcuffs.”
 
Though employees have an incentive to stay with the company in order to continue receiving premium bonuses, some employers may feel that the bonuses paid are “money out the door.” Further, they may fear that the employee may handle ownership of the policy irresponsibly.
 
A potential solution for the employer who has these concerns is the restricted executive bonus plan.
 
The Restricted Executive Bonus arrangement is designed to give the employer some degree of control over the employee’s access to the policy during employment.
 
The restrictive bonus may be approached in many ways; however the most popular method is through a restrictive endorsement to the policy. Using the restrictive endorsement, the employee agrees to sign an endorsement form, which becomes part of the policy. The endorsement states that the employee will not exercise certain ownership rights in the policy; usually for a period of years or until the employee reaches a certain age.
 
It is extremely important that the endorsement signed by the employee not grant any ownership rights to the employer. The only way the premium/bonus can be deductible to the employer is if there are no ownership rights with the employer. If the business had any ownership rights, the business’ deduction of the premiums would be jeopardized.
 
The restrictive bonus should be used sparingly.
 
And only in cases where the employer has expressed significant concern over the lack of control perceived under a standard executive bonus arrangement. In addition, the employee participant may feel as though the benefit is less compelling since the bonus is already taxable (causing an out of pocket expense in a single bonus situation) and the benefits are not immediately accessible.
 
In some cases, a restricted plan may even have the opposite effect from the intended goal of tying the employee closer to the company. It is more practical to use the double bonus, or gross up bonus, when the restrictive endorsement is used. In this situation, the cost is zero and the plan should continue to be compelling to the employee.
 
The bottom line is that executive bonus is a great way for employers to reward and retain key employees. The restrictive bonus can be used sparingly when the objection of “money going out the door” arises. Either way, executive bonus is a great sales concept for the small business market and can generate significant commissionable sales to the producer.
 
Contact your Life Sales Rep for more information.
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Underwriting With Digital Data – Milliman IntelliScript

In this digital age, insurance companies have reshaped how they assess life insurance risks. One of these ways is by gathering prescription and medical claims histories through Milliman IntelliScript, a digital health data platform. This allows carriers to streamline underwriting decisions by reducing the need for full medical records and lab testing.

Milliman reports include:
  • Prescription history including dates and refill information
  • Medical claims data from health insurance billing, which includes diagnosis and procedure codes, doctor visits and hospitalizations, and lab test orders (results not included)
  • A list of physicians who prescribed medication and/or visited

This information helps carriers identify chronic conditions, length of treatment, and any high-risk procedures or hospitalizations.

In some cases, however, these pictures are not so clear and may result in adverse decisions based on limited information. This is where our knowledgeable Underwriting Team can determine what additional information is needed, help build a clearer picture, identify any inaccurate information, and create better underwriting outcomes.

Milliman reports are available to consumers who have applied for insurance and authorized release of information to the insurance company. Applicants can request a copy of their report through Milliman’s online portal at no cost to the consumer.

🔗 https://www.rxhistories.com/contact/#report 

Contact our Underwriting Team if you want to learn more about digital underwriting and how we can help with better underwriting outcomes.

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What Demographic Is Seeing An Upswing In LTCi Sales? The Answer May Surprise You.

Although people that are approaching retirement age are great candidates for Long-Term Care Insurance (LTCi), there is a rising trend in younger people purchasing a policy to protect their future.

According to the American Association for Long-Term Care Insurance, 26% of LTCi policies are sold to people age 45 to 54.

So what is prompting the younger generation to purchase something they may not use for 20 or 30 years?
 
Personal Experience
 
Many people who purchase LTCi policies understand the importance of having coverage because they are currently taking care of their aging parents while trying to raise their own families. These people know the benefits of LTCi and don’t want to put the burden of being a caregiver on their own children.
 
Cost of Premium
 
The premium for LTCi is based off the applicant’s age. This means that the younger they purchase a policy, the less they will pay. Although they may pay for a longer period of time, it is generally less expensive than waiting to buy.
 
Future Insurability
 
Younger buyers know that if their health were to change tomorrow they may not be able to purchase LTCi at any price. Buying the policy while young and in good health not only eliminates the concern about future insurability, it may cost less considering younger people have a better chance of qualifying for good health discounts.
 
The next time you are looking for prospects for LTCi, be sure to consider people in their 40s and 50s.
 
If you would like more information about prospecting for LTCi, contact your Long-Term Care Specialists today.
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Disability Buy-Sell Planning With A New Twist

We’ve seen how some traditional funding ideas for Buy-Sell Agreements have not met a client’s need as effectively as they should. Below is a unique way to look at Disability Buy-Sell Funding that may put your client in the best possible position.

Case Design:
  • 40-year-old Attorney, 25% Partner in a law firm worth $4 million
  • Current Annual Income $200,000
‘Traditional’ Funding Buy/Sell Agreement:
  • $1 million Term Life Insurance Policy in the event of premature death
  • $1 million Disability Buyout (DBO) Policy with 365-day Elimination Period (EP) & Lump Sum Benefit = $3,780 Annual Premium
‘Unique’ Funding Buy/Sell Agreement:
  • $1 million Disability Buyout (DBO) Policy with a 730-day EP & Lump Sum Benefit = $2,880 Annual Premium
  • $900 annual Savings from ‘Traditional’
NOW ADD
  • $11,230 Monthly Benefit Individual DI policy with 90-day EP and 2-year benefit
  • $752 Annual Premium
  • $148 Total Annual Savings from ‘Traditional’

If the partner gets sick or hurt and cannot work, the Individual Disability Insurance (DI) policy will pay 67.3% of his income (tax free) for up to 2 years.

If the partner recovers from his illness or injury before the 2-year benefit runs out, he will not need to sell his shares of the practice, and he can return to work. Once he gets back to work full-time for 6 months, his Individual DI policy with 2-year benefit is reset and has a full 2-year benefit again.

The new plan design gives the partner more time to recover from the illness or injury – without having to worry about the company Buy-Sell Agreement forcing the firm to buy him out when he has recovery in sight.

If he does not recover after 2 years, the Individual DI policy benefit stops and the DBO policy will pay the partnership $1 million, tax-free, to help buy out his share of the business at current market value.

Contact your DI Specialist for more information about this strategy.

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401(k) Sales Boot Camp 🔥 Thursday, March 26

Take Your 401(k) Prospecting to the Next Level

Thursday, March 26th – 11.00 AM to 11.30 AM PST

REGISTER NOW

What 401(k) prospecting strategies really work the best?

If you’re tired of chasing unqualified opportunities and want a more reliable way to grow your 401(k) business, this 401(k) Sales Boot Camp webinar is for you.

In this practical, sales-focused session, we’ll break down proven prospecting strategies used by successful advisors to uncover opportunities, engage the right prospects, and increase profitability—without reinventing your entire process. Here’s what you’ll gain:

  • How to data-mine your existing book for immediate opportunities
  • Smart ways to identify companies in your local market
  • When to use direct marketing vs. centers of influence
  • How to craft a value proposition prospects actually care about
  • Strategies for winning larger plans and increasing long-term profitability
  • Simple next steps to keep momentum going after the meeting

Questions? Contact Jim Moore, Vice President of Retirement Services, at (949) 225-7145 or jmoore@cpsbenefits.com.

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