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The Income Provider Option

Does your client worry about how a large lump sum death benefit will be spent once they have passed?

Life Insurance can pay out an enormous amount of money in a lump sum deposit to the beneficiary, giving them more money at one time than they have ever had.

This raises the question of how will that money be spent? Will it be spent the way your client intended? Are their children responsible enough to be in control such a large amount of money?
 
How does it work?
 
With an Income Provider Option from our selected carriers, the policy owner may select a guaranteed annual or monthly income stream death benefit for payment to one or more beneficiaries.
 
This endorsement is included with the policy and can provide your client the peace of mind knowing that the death benefit will be used as intended. Not only will this income provider option allow the policy owner to control how the benefits will be paid, it also decreases the current cost of the insurance. The carrier will provide graded premium discounts based on how long the income stream lasts.
 
The Partial Lump Sum Option
 
With this option, only half the death benefit is paid up front and the remaining is distributed in an income stream. This lump sum can help the surviving spouse with burial and probate costs along with any other immediate expenses that may be incurred with sudden death. The income stream can be adjusted any time while the policy is in force, but once the insured passes, the income stream will begin paying out as selected.
 
If you have a client in mind or would like to learn more about this great endorsement, please contact your dedicated Life Associate.
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Understanding Loan Options within IUL Policies

Indexed Universal Life (IUL) is a popular product choice for cash value accumulation because of its potential for higher interest crediting rates based on the performance of a selected index over a given period of time.
 
A big selling point for the IUL product line is the assurance that the client will never lose a single cent of their accumulated cash value due to poor market performance. Unlike Variable UL policies which are subject to market performance and allow for both gains and losses on your account value, IUL uses a floor rate to protect your cash value from losses when your index account allocations have negative returns.
 
This makes for a great story during the accumulation phase. But what about the distribution phase? What is the best way to distribute the funds from the policy?

Understanding the different options available is the key to making the best decision for your client. Most IUL policies allow for either fixed or variable loans.

The fixed loans have a stated interest rate on the outstanding loan amount so there is no question about the cost of the loan. After a certain number of years, the IUL product will often provide for a wash loan or preferred loan where the amount being charged on the loan is the same as the interest being credited to the cash value (thereby resulting in zero net cost on the loaned funds.)
 
The more commonly illustrated policy loan distribution is the Variable Loan.
 
Using a positive arbitrage (the illustrated interest crediting rate for cash value is higher than the interest rate being charged on outstanding policy loans) allows an illustration to reflect a gain on the outstanding loan rather than a charge. Because this can make an illustration more attractive due to the higher cash value accumulations during the distribution phase, it’s what many producers prefer to show to their clients.
 
It is imperative that producers understand how these loan features work and communicate to their clients that they also have the potential for a negative arbitrage which can create considerable interest due on outstanding policy loans.
 
Depending on your client’s risk tolerance and whether or not they plan on paying outstanding policy loan interest as it accrues, either policy loan option can be appropriate. If you do not have an understanding of how your clients would like to approach their policy loans and simply elect the variable loans due to the potential for positive arbitrage, you may be setting yourself up for a difficult conversation if the loan interest charged exceeds the interest crediting rate for cash value and the amount available for distribution decreases well below your clients anticipated income amount.
 
Agents who are selling IUL products and highlighting the ability to generate an income stream from the policy should have a thorough understanding of the loan provisions and be able to help their clients to better understand which feature is in their best interest.
 
Our Life Sales Team is here to help you navigate the various options and make the most suitable recommendations for your clients. Contact us today.
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5 Essential Life Insurance Questions Every Client Should Answer

When it comes to securing a financial future, life insurance is a key piece of the puzzle. However, choosing the right policy isn’t just about picking a plan — it’s about understanding your clients’ needs and making informed decisions.

To ensure you’re getting the best coverage for your clients and their loved ones, it’s important to ask the right questions.

Here are the 5 essential Life Insurance questions every client should answer to make a confident and well-informed choice:
  1. If something happened to you, how would your family manage financially?
  2. If you could get affordable coverage that secures your family’s future, would you be open to exploring options?
  3. Have you heard of life insurance that pays policy holders for healthy living?
  4. Will your business suffer financially if you lose a key employee?
  5. Do you provide group term coverage to all your employees? Would you be interested in rewarding key executives with permanent coverage for less than the cost of term insurance?

For more information or assistance with a case, contact your Life Sales Associate today!

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Affordable, Fast, And Flexible Life Insurance In Minutes

The primary objective of term insurance is to provide coverage that is efficient, flexible, transparent, and affordable. One exceptional product has achieved these attributes. Furthermore, this product successfully approves 70% of clients through non-medical underwriting.

A fully online application process allows applicants to secure coverage in as little as 18 minutes, offering rapid access to life insurance protection.

The plan includes flexible term lengths of 10, 15, 20, or 30 years and coverage amounts ranging from $100,000 to $5 million. Premiums are fixed and remain unchanged throughout the duration of the selected term. Additionally, the policy features a conversion option within the first 10 years or before the insured reaches age 70, whichever comes first.

A key highlight is it’s adaptable underwriting process.

This product can accommodate diverse health profiles with options such as instant approval, accelerated underwriting, or full underwriting. Applicants aged 60 or younger seeking coverage of $5 million or less are eligible for instant approval, further streamlining the process.

Transparency is a priority, with clear and consistent communication provided to both clients and agents throughout the application process. Regular updates ensure timely application completion, enabling carriers to deliver decisions quickly, whether through instant approval, accelerated underwriting, or full underwriting.

Finally, affordability remains a key focus for this product. Recognized by Forbes and USA Today as ‘Best for Term Life Rates’, it has established itself as a market leader in providing competitive and low-cost solutions

For clients looking for a simple, affordable life insurance solution, this product delivers value, efficiency, and peace of mind. Reach out to your Life Insurance Consultant to explore how this product can benefit your business.

 

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Indexed Universal Life: The All-Around Product

The recent market volatility has prompted many advisors to look for Life Insurance solutions that can help clients achieve their goals while minimizing the impact of market fluctuations.

A product that has gained substantial traction is the Indexed Universal Life policy, a Fixed Life product that can offer clients the potential for growth and protection from market loss.

Product Benefits
 
Flexible death benefit guarantees. Clients have access to a 20-year base policy death benefit guarantee (reduced for issue ages 65 and above) plus the optional Extended Death Benefit Guarantee rider.
 
Helps clients with a product that offers cash accumulation potential and minimizes the impact of market loss. This product features cap rates as high as 12% and floor to allow advisors to give clients more stable returns over time. The cap rate allows clients to maximize the interest credits they receive during up markets, while the floor rate protects them from loss during times of market decline.
 
Average of three market indexes. Indexed UL uses an annual interest crediting strategy that employs monthly averaging to help protect the interest credited during periods of market volatility. This strategy uses a blended average of market indexes (S&P 500®, the NASDAQ-100®, and the Dow Jones Industrial Average SM) and weighs them so that clients always benefit more from the better performing indexes. It’s important to note that Indexed Universal Life policies are not stock market investments and do not directly participate in any stock or equity investments.
 
Some IUL carriers feature a 140% current participation rate which means that clients could potentially be credited interest at 140% of the actual index return, subject to the cap rate.
 
Additional Features
 
Competitive underwriting. Underwriting options include simplified issue and guaranteed issue for corporate-owned and corporate-sponsored arrangements.
 
Access to an indemnity style Long-Term Care rider. Advisors can help clients maintain control of their money and their independence by adding a LTC rider onto the policy for an additional cost. The LTC rider may be known by different names in different states may not be available in every state and has an additional charge associated with it.
 
Target Clients
 
Indexed UL may be a good fit for clients who are:
 
  • Seeking Life Insurance that offers guarantees and the potential for growth
  • Looking for more stable accumulation potential during volatile markets
  • In need of flexible death benefit options
  • Interested in planning for possible LTC expenses
  • 35 to 55 years of age
If you have questions about this product or case design, please contact your Life Sales Representatives today.
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Protection For Life – Benefits While Living!

Do your clients have life insurance that provides long-term financial security while covering multiple needs? If not, it’s time to seriously consider offering affordable permanent life insurance with living benefits that include critical illness, long-term care, and Vitality.

Life insurance with critical illness benefits allow policyholders to access a portion of their death benefit if they experience a qualifying health condition, such as a heart attack.

This can help cover the cost of treatments, care, or other expenses during challenging times. Long-term care benefits ensure that clients can afford necessary care, whether at home or in a nursing facility, without depleting their savings.

Additionally, with Vitality wellness benefits, clients can earn valuable rewards and premium discounts for engaging in healthy lifestyle activities. Vitality motivates clients to take charge of their health by rewarding healthy behaviors. This encouragement can improve their quality of life and reduce the risk of a critical illness or long-term care event.

Let us be your trusted partner in providing comprehensive solutions built to stand the test of time!

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Create New Sales Opportunities With Term Insurance

Term Insurance is often used as a cost effective way to replace income, repay debts and/or provide a legacy in the event of a premature death.
 
In addition to these great functions, there are certain term insurance products that can provide your clients with more comprehensive benefits while they are still alive.

Promoting these solutions will not only deliver additional value to your clients, but will also help differentiate you from the competition in what is largely a price driven marketplace.

Consider This
 
For many clients, a major medical event (such as a heart attack, stroke or being diagnosed with cancer) can have devastating financial effects and leave their family unsure of how they will continue to make ends meet while paying for medical care.
 
Did you know that there are term insurance products which could be used as a source of income in the event that the insured were to experience once of these medical events?
 
With built in critical illness and chronic illness benefits, you can help your clients obtain coverage that will offer benefits while the insured is still alive. There is even a product available with these living benefits that can accommodate non-medical underwriting for face amounts up to $249,999!
 
With the introduction of these living benefit features to the term insurance marketplace, you now have a simple sales concept that you can use to create new sales with prospects and existing clients alike. How many of your clients would consider replacing their existing term coverage with a product that could pay benefits if they were to experience a major health event?
 
Contact us today for a copy of our Policy Review Kit and to learn more about the living benefit term solutions available in your state.
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Maximum Future Flexibility – Cash Value Life Insurance

Life Insurance products are designed to protect risks from being transferred to an undeserving party by having a group of individuals pay premiums to reduce the overall cost of mitigating these risks.
 
This is seemingly the base definition of the purpose of insurance, but there are additional caveats based on the specific design of the products.

The market has been repositioned in recent years to be geared toward guarantees with traditional no-lapse features built into policies.

During this market shift there was a product line that was forgotten, Cash Value Life Insurance.
 
The initial advent of Universal Life Insurance promulgated the concept of access to cash value and maximum future product flexibility.
 
The current interest rate environment is at a 40-year all time low and individuals are looking for creative ways to achieve the highest return on their money. The cash value products provide an alternative savings account and provide great flexibility to prospects when looking to supplement retirement benefits from a pension, 401(k), IRA or any other existing retirement vehicle within their portfolio.
 
The cash value is also another source of capital for an emergency fund for an uncertain future medical expense, or these values could be used if a unique business opportunity that would not have been available to the policy owner otherwise.
 
If the policy owner’s experience financial hardship they are able to adjust the policy to keep their coverage intact.
 
One of the most prevalent features is that the policy owners reserve the right to skip premiums if the cash value is great enough to cover their obligation. This reduces the possibility of lapse or reinstatement, which can be a cumbersome task for the client to complete.
 
This is a concept that should be discussed, because the traditional guarantees might not be flexible enough to meet client objectives in a financial environment that is new to even highly sophisticated advisors.
 
Contact Us
 
We want to help you provide the most comprehensive insurance planning to your clients and put you in a position to grow your business. For more information on the cash value products please contact your Life Sales Marketing Manager today and ask about our Policy Review Program!
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Wealth Transfer Strategy Using Deferred Annuities to Fund Life Insurance

Do you have clients that originally purchased a Deferred Annuity to find that they no longer need it for retirement income purposes? Often, these clients intend to “leave it for the kids.”

Although a Deferred Annuity is a great vehicle to accumulate funds for retirement, it is not an efficient vehicle to transfer wealth since it may be taxed twice at death.

How can your clients avoid this? By reducing or replacing the Annuity with more tax-efficient assets.
 
How It Works
 
Annuity Maximization is simply an asset repositioning strategy in which the Annuity is exchanged or converted to a Single Premium Immediate Annuity (SPIA). A SPIA provides an income stream for a chosen number of years based on a single deposit made to purchase the Annuity in addition to your client’s age and health status.
 
Your client may then make gifts of the after-tax income generated from the SPIA to an Irrevocable Life Insurance Trust (ILIT). The ILIT then has the funds to purchase a Life Insurance policy on your client’s life for an amount that replaces or exceeds the value of the Deferred Annuity, to benefit the heirs. The Life Insurance policy pays out the tax-free death benefit at the end of the client’s life.
 
You want to be sure to avoid taxation on your client’s Deferred Annuity as it can be taxed up to 70%. By converting the Deferred Annuity to a SPIA and then leveraging the SPIA income withdrawals to purchase Life Insurance, you’ve created a simple solution to increase the amount transferred to the heirs of your client.
 
For more information on this plan or any other Life Insurance sales ideas please contact your Life Sales Marketing Manager.
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3 Out Of 4 Clients Want Help Preparing For Retirement – Do They Know How You Can Help?

Clients often think of life insurance solely as an instrument to protect them in the event of premature death, unaware of the valuable tax benefits that are afforded through cash value life insurance. And in today’s volatile marketplace, clients that are saving to retire need all the help they can get.

You have access to many products that can provide your clients with tax favored cash accumulation and if structured properly, will also provide for non-reportable, tax-free income.

The ability to specify a premium schedule is one of the great features available in our cash value life insurance products, removing the objection that the policy costs too much money. By educating your clients about the benefits of cash value life insurance as a long-term savings vehicle, they are likely to fund the policy with as much premium as they can reasonably afford.
 
While term insurance may be efficient for replacing income, or indemnifying debts, clients are very likely to outlive their level benefit period – receiving no return on their premium contributions.
 
How You Can Help
 
Recommending a cash value insurance policy at a younger age and more favorable health will better prepare your clients to address critical financial concerns such as retirement income planning, college tuition funding for loved ones and also paying for unexpected events (medical emergencies, litigation, home renovations, etc.) in their family.
 
The longer that you can fund a policy and allow the cash value account to compound interest and grow, the larger the potential income stream will be. One of the unique features of using life insurance is the death benefit – if the insured dies prior to accessing their cash values, it will provide a tax-free return on the premiums paid to date.
 
Many of your clients want to have a conversation about their options in regards to preparing themselves for retirement, but feel overwhelmed by the thought or do not know where to start. If you haven’t shared how cash value life insurance can play an integral role in their long-term financial planning strategy, you are likely missing out on easy sales; leaving the door open for another broker to have that conversation with them instead.
 
Your Life Sales Rep can provide you with an understanding of the different products available for cash accumulation. We can provide you with customized solutions for each client. Whether they can spend $100/month, $1,000/month or $10,000/month, we can create a solution that fits their budget.
 
Contact us today to learn how you can begin to position cash value life insurance as a core product offering to all of your clients.

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