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Your Clients Will Want To Know About This Tax Benefit!

A Guide to Qualified Longevity Annuity Contracts and Their Retirement Benefits

As retirement planning becomes increasingly complex, Qualified Longevity Annuity Contracts (QLACs) are emerging as powerful tools for securing income in later retirement years. Before your clients begin taking Required Minimum Distributions (RMDs) from their retirement accounts, it’s essential to understand how QLACs can help them optimize their retirement income and tax strategy.

What Is a QLAC?

A QLAC is a type of deferred income annuity that you purchase using funds from your traditional IRA or qualified retirement plan. The unique feature of a QLAC is that it allows your clients to defer receiving distributions—and thus paying taxes on them—until as late as age 85. This means clients can use a portion of their retirement savings (up to $210,000 for 2026) to create a guaranteed stream of income later in life while delaying some RMDs.

Key Benefits of QLACs
  • Tax Deferral: By transferring a portion of an IRA or 401(k) into a QLAC, those funds are excluded from RMD calculations until payouts begin. This can reduce your client’s taxable income during early retirement years.
  • Lifespan Protection: QLACs provide guaranteed income for life starting at the age you choose (up to 85), helping protect against outliving assets—a significant concern for many retirees.
  • Flexibility and Control: You can select how much to invest in a QLAC (up to IRS limits), and when payments start, giving you control over your income timeline.
  • Simplified Planning: Knowing you’ll have a secure income stream later in life can make it easier to budget for early retirement and manage other investments.
Why Delay RMDs Until You Consider a QLAC?

Once you start taking RMDs, the opportunity to fund a QLAC with pre-tax retirement assets diminishes. Taking time to evaluate whether a QLAC aligns with your clients’ goals can help them avoid unnecessary taxes and preserve long-term financial security.

In summary, QLACs offer valuable tax-deferral benefits, guaranteed income for longevity, and greater flexibility in retirement planning. Don’t rush into taking RMDs—explore your clients’ options with QLACs to maximize their retirement peace of mind.

Contact your Annuity Consultant today to learn about this powerful planning opportunity.

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Final Expense Coverage – Insurance That Every Client Needs

As insurance advisors, we are often looking to sell our client’s products that will satisfy an immediate need or help them to reach a long-term planning objective.
 
As a result, the discussion concerning the need for Final Expense Insurance frequently does not take place until the clients later years when the premiums can be significantly more expensive.

If one of your clients dies without having funds earmarked for final expenses their surviving family and friends can be put in a very difficult position that causes them to make lifestyle sacrifices to provide for a proper burial.

Losing a loved one is already a difficult thing to manage.
 
You can help to alleviate some of the stress by making sure that they will not need to worry about generating the necessary funds for the funeral. While these may not be big ticket sales, collectively, they can create a great supplemental sale that compliments your existing offerings.
 
Even if you are an investment advisor who doesn’t typically write Life Insurance, if you are looking to preserve assets under management from one generation to the next, what better way to begin a professional relationship with a surviving family member than by handing them a check for the benefit proceeds.
 
More insurance carriers are introducing small face amount, final expense products that do not require a medical exam and can be issued with only a phone interview or by answering basic medical questions on an application. The process can be completed in a matter of days.
 
We can provide you with marketing materials and client approach letters to help make this simple sale part of your core product offerings.
 
For your younger clients who already have kids, they may not view Final Expense coverage as an immediate need. An alternative solution would be to add a child rider to a Term policy to provide affordable coverage on the parent and also any and all of their children.
 
Please contact us today if you would like to learn more about the final expense planning and the solutions available in your state(s) of operation.
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Underwriting Recreational Marijuana

Did you know that Non-Smoker rate classes are available on marijuana use? In some cases, Preferred Non-Smoker rate classes may be possible.
 
Take a look at these potential rate classes for recreational marijuana use:
  • 8 or less days per month may qualify for Preferred Plus Non-Smoker
  • Up to 3 times per week may qualify for Preferred Non-Smoker
  • If over age 50, no more than 1 time per day and up to 4-6 times per week may qualify for Standard Non-Smoker
Contact the Underwriting Team for best possible outcomes on marijuana use.
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Controlled Executive Bonus With LTC Benefits

A Controlled Executive Bonus Plan, also known as a Restrictive Executive Bonus, or Section 162 Plan, is an agreement between an employer and its key employee(s) to provide a death benefit, supplemental income, and now includes long-term care benefits.
 
The employee applies for and owns the life insurance policy, with the right to designate the beneficiary(ies) of the policy.  The company then pays the “bonus” premium directly to the insurance company.

The employee’s right to receive the cash value of the policy through loans, withdrawals or surrender is restricted during a time period based on age, years of service or other conditions agreed upon by the company and the employee.

If the employee terminates employment during this restricted period, the company must agree for the employee to have access to policy cash values.  The employer, at that time, may require repayment of some or all of its “bonus” premiums from the policy’s cash value in exchange for its agreement.
 
*Subject to agreement
 
A Controlled Executive Bonus Plan has two advantages to the employer:
 
  • Pay key employee(s) a bonus in the form of a life insurance premium
  • Can take a current deduction for the bonus
Benefits of a Controlled Executive Bonus Plan
For the employer:
 
  • Can select which key employees can participate
  • No mandatory eligibility and participation rules
  • No IRS restrictions or approval
  • No government forms or reports, minimal administration
  • “Bonus” premiums are tax-deductible
  • Recruit, reward and retain key employees using “golden handcuffs”
For the employees:
 
  • Income-tax free benefits paid to surviving family at death
  • Permanent life insurance protection
  • Long-term care benefits available
  • Tax-deferred growth of policy cash values
  • Income-tax free death benefits
  • Although the employee must report the life insurance premiums paid each year as taxable compensation, impact of this can be minimized by the employer providing a cash bonus to the employee sufficient enough to cover both the premiums and income taxes due
  • Unrestricted ownership of policy and its values after the restricted period ends
The endorsement is executed by the employer and employee and filed with the insurance company.  For a specified period of time agreed to by the employer and the employee, the endorsement restricts some of the employee’s ownership rights in the policy.
 
During the restricted period, the endorsement restricts the right of the employee to surrender the policy, assign the policy as collateral, change ownership or make a policy loan, unless the employer also agrees.  The restrictive endorsement is typically designed to expire at a defined point, usually between 5-15 years.
 
For more information about the long-term care benefits included in a Controlled Executive Bonus Plan, please contact your LTCi Sales & Marketing Manager.
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Affordable Income Protection For Any Budget

The need for an income protection plan is not limited to the Executive, Doctor or Attorney earning in excess of $150,000. According to the 2020 U.S. Census Bureau the average annual income in the United States was $67,521 from all occupations.

Average everyday working people (Middle America) are just as dependent on their income to provide for themselves and their families as anyone in the higher tax brackets.

The opportunities are endless – reach out to your clients, friends, families, fellow club members and co-workers. Ask if they have an income protection plan in place should they get sick or hurt. Offer them an affordable plan to protect them and their family.
 
Of the advisors we speak with every day, Life Insurance Agents, Health Insurance Agents, and P&C Brokers – 92% are not talking to their clients about income protection and how affordable it can be.
 
You can differentiate yourself as an advisor just by offering valuable coverage to your clients that likely no one has ever spoken with them about.
 
Did you know?
 
The premium for a 45-year-old Office Clerk for $2,500 monthly benefit is only $51.00 per month. The premium for a 35-year-old Dental Hygienist for $3,600 monthly benefit is only $52.95 per month. There are even affordable plans for part-time Dental Hygienists and Registered Nurses working as little as 24 hours per week.
 
Talk about opportunities, there are over 192,800 Dental Hygienists in the US earning an average annual income of $87,530 (http://www.bls.gov/ooh/healthcare/dental-hygienists.htm) and 2.7 million Registered Nurses earning approximately the same income (http://www.bls.gov/oes/2011/may/oes291111.htm).
 
Never let premium be the reason your client’s income is left unprotected from an injury or sickness. The new, affordable Disability Insurance (DI) plans can fit most any budget. 
 
You are at the frontline to educate your clientele about the vital need for income protection in the event of an injury or sickness. Your clients want to buy income protection, but they need someone they know and trust to ask them about it.
 
Discuss Income Protection Insurance with all your prospects and clients, because they may not understand the risk of losing their income should an injury or an illness strike.
 
For marketing tools and sales ideas, contact your Disability Income Sales Experts today.
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Don’t Make The IRS A Co-Owner Of Your Policy!

Whenever an asset changes hands a risk is involved in the transition of title, especially with life insurance policies! The biggest tax advantage of life coverage is the ability to receive the death benefit income tax-free.

But much of the death proceeds from a transferred policy will be taxable unless the change is an exception under the Internal Revenue Code!

A couple of points:
  • Most intra-family transfers are considered gifts and don’t affect taxation of the death benefit.
  • A policy can always be transferred back to the insured without issues.
  • Even lower-income beneficiaries can feel the effect as the taxable portion of the proceeds is added to, and often exceeds, their normal taxable income.
  • Taxation can be triggered by the transfer of any interest in the policy, not just outright ownership.
  • Most problems occur when unneeded business-owned policies are transferred to someone other than the insured (e.g. a trust).

The good news! Most potentially taxable changes can be avoided, and past taxable changes can usually be fixed.

Reach out to Tom Virkler, JD – Director, CPS Advanced Markets, at 706-614-3796 or tom@cpsadvancedmarkets.com concerning any policy ownership changes you anticipate, or to discuss current policy placement to avoid problems down the road should ownership changes become necessary. 

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Understanding The Nuances Of LTC And Chronic Illness Riders

As more Life Insurance carriers enter into the Linked Benefit marketplace, it’s important to understand that there are key differences in how their policy riders will provide living benefits to the insured.

Knowing the ins and outs of these riders will help save you and your clients from some potential problems in the future.

There are two different ways in which insurance carriers file for these accelerated benefit riders – first as a Chronic Illness Rider or second as a Long-Term Care (LTC) Rider.
 
What are the differences?
 
Chronic Illness Riders generally require a physician to certify the condition as “likely to last the rest of the insured’s life” while LTC Riders can be utilized for either temporary or permanent claims. While on claim for a LTC rider, policy premiums are likely to be waived though some carriers will still require the scheduled premium to be paid.
 
For temporary claims, you’ll want to be mindful that carriers can require a catch-up premium for the waived scheduled premium which was not remitted while on claim if the client recovers and is no longer in need of Long-Term Care. This can become very prohibitive if the scheduled premiums are significant and/or the client is on claim for an extended period of time.
 
One way to work around this issue is to have shortened premium paying period inside of a “paid-up” policy so that there would be no additional premiums due in later policy years when a client is more likely to have a LTC claim.
 
When promoting a Chronic Illness Rider, it is important to understand whether there is a cost or charge for the rider when it is accessed and also if there will be any limitations to the amount of the benefit available to the client.
 
Some products will not charge a cost until the rider is accessed and some carriers will not be able to determine the amount of benefit available until a claim is applied for. Clients should be made aware of these points before making a final purchase decision.
 
Another key consideration is how the benefit will be paid to the client.
 
For Chronic Illness Riders, it may only be a question of how frequently the benefit is paid out. For LTC Riders, you will need to know whether the rider is indemnity or reimbursement style.
 
Indemnity allows for the full benefit to be paid once the client qualifies for the rider without consideration for the actual expenses incurred as result of the LTC provided. Reimbursement riders will only provide benefit for the actual cost of the qualified LTC services and require the client to coordinate the benefit with the carrier.
 
These are just a few of the different features and functions that you should understand when promoting permanent insurance products which include living benefit riders. Additional consideration should be given to the specific details for each product and rider that you are recommending to your clients.
 
If you have any clients that you would like to consider for this concept or if you would like learn more about any of the particular products or riders available, please call your dedicated Life Sales & Marketing Specialist today.
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The Skinny On GLP‑1: Underwriting In The Weight-Loss Era

Obesity is a major risk factor for Type 2 diabetes, heart disease, stroke, sleep apnea, liver disease, and certain cancers.

It’s estimated that around 40% of the adult non-diabetic population in the U.S. is obese.

Over the past few years, GLP‑1 medications have become mainstream for the treatment of both obesity and Type 2 diabetes. GLP-1 receptor agonists – such as Ozempic, Wegovy, Mounjaro and Zepbound – mimic the body’s GLP-1 hormone which helps manage blood sugar levels, suppresses appetite and slows the process of food leaving the stomach.

GLP-1 agonists have been shown to reduce effects of metabolic risk factors including obesity, diabetes and in atherosclerotic cardiovascular disease. However, there is also a high incidence of regaining weight loss after stopping the GLP-1, in some cases with weight returning to baseline levels within 1 to 2 years. Ongoing lifestyle change is key for long term success beyond treatment.

When it comes to underwriting, here are a few things carriers look for in assessing the use of GLP-1 medications:
  • Indication – What is the medication treating? Weight loss, diabetes, or both
  • Weight loss history over a period of one year – What is the current height/weight and what is the total amount of weight loss in the prior year? To account for stability risk, carriers will underwrite based on an adjusted weight that includes adding back half of the weight lost within the prior 12 months
  • Comorbidities – Are there any diagnoses for co-morbid conditions such as Type 2 diabetes, cardiovascular disease, sleep apnea and hypertension? Additional ratings may apply if comorbidities are present
  • Healthy lifestyle habits – A healthy lifestyle can help with a more favorable underwriting assessment. These include diet, exercise habits, and a lifelong nonsmoker

Contact our Underwriting Team of experts to help get the best possible offers with your GLP-1 scenarios.

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Asking The Tough LTC Questions

When you meet with your clients to fill out a Long-Term Care application you are faced with asking tough questions. At times, not all clients feel comfortable telling you which medications they are on or why, or how much they weigh.

As an agent, it is your job to be thorough when completing the application in order to get your client the best offer available.

Here are some tips on asking the tough questions:
 
Set the Stage
 
Let your clients know why you are asking these personal questions. You could say something like this:
 
“Mr. and Mrs. Client, you don’t have to be in perfect health to get Long-Term Care Insurance, but you do need to be in relatively good health. It’s my job to gather that information, so I need to ask you some questions about your current health and about any medications you may be taking.”
 
Get An Accurate Health Picture
 
Just as a doctor needs complete and accurate information to make a diagnosis, you need it to make the best recommendation for your clients. Encourage them to be completely honest and thorough when answering health questions.
 
Learn The Story Behind The Medication
 
The medications your client takes usually tell the story but you should dig deeper to find out what conditions a medication has been prescribed to treat. It is a good idea to familiarize yourself with common medications associated with uninsurable conditions.
 
Here are some common medications you should be familiar with:
 
  • Prednisone is prescribed for COPD and Rheumatoid Arthritis
  • Requip is prescribed for Parkinson’s Disease
  • Aricept is prescribed for Dementia
  • Avonex is prescribed for Multiple Sclerosis
Don’t Guess How Much Your Client Weighs
 
Ask them and remember to use build charts to assist you when filling out applications.
 
Lastly, it is smart to include a cover letter with the application stating information you learned about your client that may not have been required to disclose on application. This allows you to share more with the underwriter such as your client’s habits, lifestyle and what they are doing to manage current health issues. Remember, the more you can tell the underwriter about your client, the better chance for a positive underwriting outcome.
 
For more information on how to approach your clients about Long-Term Care applications contact your LTC Specialist today.
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DI Sales In The Small Business Owner Market

Small business owners make up 44% of U.S. economic output and are strong prospects for individual disability income (DI) insurance. Many are unprotected by Workers’ Comp and are viewed favorably by DI carriers because owners are highly motivated to return to work.
 
The Opportunity
 
Most business owners aren’t being approached about DI coverage. A 2019 LIMRA study found only 18% carry individual DI, and many who do use it only for business‑related needs—leaving 82% without protection for their own income. This creates a large, underserved market.
 
How to Engage Them
 
Your main task is helping owners overcome the belief that they are “invincible.” Asking what would happen if they became sick or injured opens the door to discussing solutions such as individual DI, Key Person coverage, Business Overhead Expense, and Disability Buy‑Sell insurance.
 
Increase Their Awareness
 
While some professions (physicians, dentists, attorneys) already understand the value of DI, small business owners often don’t realize their vulnerability. Educate them on why income protection matters and focus on those who recognize the need—don’t overinvest time in those who simply “don’t get it.”
 
Make Your Case with Facts
 
Many people underestimate disability risk. Key statistics include:
 
  • Injuries cause fewer than 10% of disability claims.
  • Musculoskeletal diseases (e.g., arthritis, tendonitis, carpal tunnel) are the top cause.
  • Cancer is the second‑leading cause of disability claims.
Support
 
We can provide tools and marketing resources to help you reach this important market. Reach out to your DI Associate to get started today.
 

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