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The A-B-C’s Of The Cash Benefit

Everyone knows what cash can do. Use this simple concept to demonstrate the value of purchasing a Long-Term Care policy that includes a built-in cash benefit.
 
Take out a piece of paper and write on it vertically: A, B, C.
 
A is for Assets
 
When the need for Long-Term Care first arises, many people worry they may not have assets available to pay for care they need. This is especially true for people who may have to liquidate assets like stocks, CDs or even property to pay for their care.
 
B is for Burden
 
Families typically step in to help a loved one who needs Long-Term Care. But that may be difficult for adult children who have their own family and career responsibilities. If your clients are like most people, the last thing they want to do is to become a burden to their family.
 
C is for Choices
 
A Long-Term Care Insurance policy that offers a cash benefit can help someone receive care in the comfort of their own home.
 
The cash can be used however its needed most. Whether it’s to pay for an airline ticket or a tank of gas so a child can help out or for housekeeping or meal delivery services.
 
With one of our strategic carrier providers, the cash is available to you on day one. That means when you become eligible for benefits under your policy, there’s no waiting period to qualify for cash. This is something you won’t find from other insurance companies.
 
In addition, should your client need a higher level of care someday, they always have the choice to switch from the cash benefit to a traditional reimbursement benefit, which reimburses for the actual Long-Term Care services expenses incurred.
 
For more information about this sales idea, contact your LTC Specialists today.
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Three Questions That Lead You To The DI Sale

Selling Disability Insurance (DI) is a delicate process. You know your clients need the protection, but the ‘hard sell’ angle can be too aggressive. Today, we are working in an environment where a subtle approach has proven much more effective when opening the conversation about Disability Insurance.

Instead of drilling your clients with horror stories about the difficulties they will face without having a DI policy in place, ask them the right questions in order to make the DI sale.

Three Questions That Will Start The Income Protection Conversation
 
Do you have an income protection plan, if you were to get sick or hurt and couldn’t work?
 
“No,” will be the response you will most likely hear, leading you to question two. However, you will have a percentage of clients that may have an Employer funded group plan – and most employees with Group Long-Term Disability couldn’t tell you what their employer sponsored plan would pay if they went on claim. Simply suggest they send an email to their HR dept for an electronic copy of their benefit book.
 
Most group plans will pay 60% of their earnings and is fully taxable to maximum benefit. After taxes, that monthly benefit plummets to around 43% of their earnings – a substantial pay cut, and many aren’t able to sustain their standard of living at only 43%. The opportunity is to have them buy a small personal policy to bring their income up to 65 to 70%.
 
How long would you be able to make your monthly bills if you couldn’t work?
 
This is where we would use the subtle approach to start painting the picture of what it is going to look like after an illness or accident. Ask your client how long their Savings, Retirement Plan, and Credit cards would carry them. 3 months? 6 Months? 1 year?
 
And where is the money going to come from after that?
 
Wait to let them answer. You are still painting the picture. Let your client know that you have an affordable plan that would protect their income if they got sick or hurt. Simply ask if they would like to learn more about it. You will have a percentage of clients who ‘get it’ and will want to learn more, and you will have those that don’t care. And that’s okay – as long as you make the effort to provide them the protection, when they are ready to buy, they will come to you.
 
These three simple questions will paint the picture for your clients and help identify their need for an Income Protection Plan. Please contact your DI Sales Rep for support with your Income Protection Business.
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Buy A New Policy And Lower Tuition Cost

Nobody gets help with college costs nowadays unless they first fill out a lengthy and bothersome form known as the FAFSA (the acronym stands for Free Application for Federal Student Aid, just in case it ever pops up when you choose the Governmental Financial Assistance category on Double Jeopardy). The information entered therein drives all consideration for aid under all Federal and many State educational programs.

FAFSA has certain eligibility criteria that determine, based on your income and net worth, how much you should be contributing to your child’s higher education. If the amount they determine you can pay is too high it renders you ineligible for assistance.

If you are poor and haven’t paid much of the tax that supports the assistance programs, then you’ll probably get financial support. If you are rich and paid a great deal of the tax to fund the programs, then you probably won’t get any aid – but no big deal because you’ve got enough to pay the piper anyway.
 
The people that get hammered are those in the middle who have paid their fair share of the tax and, in addition, have been responsible enough to save, invest, and accumulate against the day of their anticipated retirement – only to find that the net worth that their sound economic behavior has created disqualifies them for assistance.
 
Here is where you can help your clients, especially those with liquid net worth considerable enough that it proscribes or prohibits assistance:
 
The instructions for completion of the FAFSA form direct that in reporting financial information, “Net worth means current value [of includible assets] minus debt.”
 
For example, a commercial building worth $300,000 with a $100,000 mortgage would add $200,000 to the net worth calculation. But more important – when adding the value of investments the instructions state that, “Investments do not include . . . the value of life insurance . . . [or] annuities . . .”
 
How many clients do you have with considerable amounts of net worth in low-performing assets like CDs?
 
And now the value of those assets are creating a roadblock to financial aid. One simple solution to recommend is the transfer of funds to an annuity contract or an over-funded life insurance policy (they may not have adequate coverage anyway).
 
The timing of a purchase doesn’t appear to be an issue. In researching this strategy calls to the FAFSA information line drew the response that an annuity or life policy was exempt so long as it was in force at the time of the completion of the FAFSA application. Needless to say, a client should do his or her own spadework in this regard before making a decision. Once the child is graduated or no longer in need of assistance, funds can be transferred back into the investment opportunities of choice.
 
Call us to learn about the best product opportunities available for clients who are prospects for this FAFSA Net Worth Minimization Strategy.
 
Note: The deadline for the 2024-2025 FAFSA is midnight, Central Time, June 30, 2025. The earlier you file, the more grant money you are likely to receive (up to twice as much).
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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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Underwriting Program Improves Sub-Standard Ratings

One of our A+ rated carriers has underwriting crediting program that will benefit more of your clients.
 
Here’s an example:
  • Seeking term coverage
  • 45-year-old male, non-tobacco
  • History of bipolar disorder with occasional minor episodes treated with medication on an as-needed basis – no daily medication
  • History of elevated cholesterol with favorable cholesterol ratio of 3.17
  • Family history of early heart disease – had a coronary artery calcium score test 3 years ago showing a zero calcium score (no heart disease)
  • Favorable height/weight 5’10” 174 lbs. (BMI 25.0)
Initial assessment is Table B, but with the application of this crediting program, a more favorable underwriting decision is possible. Underwriting outcome; Standard!
 
Our Underwriting Team is here to help with all your impaired risk cases. Please contact us today for more information about this carrier and how we can help boost your sales.
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Open the Door to Small Business Sales

Selling Long-Term Care Insurance to small business owners is not like the emotional roller coaster sale it is when selling to individuals. Business owners tend to look at this as a logical discussion of how you can help with their business finances.
 
Many are always looking for a way to save on taxes so a great way to open the door to an LTC sale would be, “If I could show you something that could help your business reduce its tax burden, would you be interested?”

All businesses can deduct LTC Insurance premiums paid using business dollars.

Depending on the tax structure of the business, the owner can either deduct the actual premium or eligible premium.  How?
 
Owners of C corporations can deduct the actual premium paid on a LTC Insurance policy for the owner / employee, spouse, dependents and a designated class of employees.
 
Self employed business owners such as sole proprietors, partnerships or LLCs can deduct the eligible premium paid for the owner, spouse and dependents. The eligible premium is established annually based on the medical care components of the Consumer Price Index.
 
This opportunity allows you to approach any type of small business because you are able to offer a money saving solution. Be sure to approach small business owners with a plan that provides essential LTC coverage and allows them to take advantage of federal tax incentives.
 
For more information about selling LTC to small business owners contact your LTC Specialist today.
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Why Business Owners Should Invest in Disability Buyout Insurance

When a business has multiple owners, Disability Buyout Insurance provides funds to buy out the disabled owner’s share of the business. This ensures that the business can continue operating smoothly without financial strain.

The Importance of Disability Buyout Insurance

Without this insurance, a disabled owner’s share of the business could become a burden, leading to potential disputes and financial instability.

Who Needs Disability Buyout Insurance?

Any business with more than one owner can benefit from Disability Buyout Insurance. Whether it’s a partnership, a corporation, or a limited liability company, having this insurance in place can safeguard the business from potential disruptions caused by a co-owner’s disability.

How Disability Buyout Insurance Works

When a co-owner becomes disabled, the Disability Buyout Insurance policy is triggered. The policy provides the necessary funds for the remaining owners to buy out the disabled owner’s share of the business. This ensures a smooth transition of ownership and allows the business to continue operating without interruption.

Choosing the Right Disability Buyout Insurance

Factors such as the value of the business, the number of owners, and the potential impact of a co-owner’s disability should be taken into account. Working with an experienced insurance advisor can help in choosing the most suitable policy.

Conclusion

Disability Buyout Insurance provides financial protection and ensures a smooth transition in the event of a co-owner’s long-term disability. By understanding the importance of this insurance and choosing the right policy, business owners can mitigate potential risks and secure the future of their business. Contact your Disability Insurance Specialist to learn more.

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Avoiding The Gift Tax, But Keeping The Benefits

A song familiar to all tells us that, “Love and marriage go together like a horse and carriage.”   Maybe so.  But when it comes to finances and marriage the use of the two as grist to the mill of so many matrimony jokes does not suggest such an harmonious coupling.  Consider a couple tame examples:

Wife to husband:  “I didn’t report your stolen credit card because the thief is using it more wisely than you did!”

Husband to wife:  “I think I need to buy you a new bank account.  The one you have keeps running out of money!”

Fortunately, fact usually looms larger than the fiction of humor.  We find most high-net-worth married couples in full financial tandem, especially when it allows them to move large amounts of net worth out of their joint taxable estate and still keep access to the benefit of the assets after the transfer.

This is done through a common and time-tested planning device most-often referred to as the Spousal Lifetime Access Trust (SLAT).  

With the help of legal and tax counsel its implementation and function are as follows:
  1. The taxpayer sets up an irrevocable grantor trust with intended heirs (usually the kids) as trust beneficiaries.
  2. In addition, the taxpayer’s spouse is made a lifetime beneficiary of the trust – that is what makes it a SLAT.
  3. The beneficiary spouse can have the right to withdraw all income generated in the trust each year.
  4. The beneficiary spouse can have the right to draw 5% of the trust corpus each year.
  5. The trustee of the SLAT can have the power to make discretionary distributions for the health, education, maintenance, or support (HEMS!) of the beneficiary spouse.  And if your trustee can’t justify a distribution for one of these reasons, someone should be appointed who has a better imagination!
  6. The beneficiary spouse can even be the SLAT trustee who makes the discretionary distributions discussed in #5!

So… a high-net-worth taxpayer can make full use of the current high lifetime exemption of $13,900,000 by transferring that amount to a SLAT for a spouse and still maintain vicarious access through that beneficiary spouse to the benefits of the property gifted.

A SLAT can also serve as the depository for life insurance outside the estate that can assist in payment of any unavoidable death taxes.  In addition, legal counsel can be sought to see if a second trust can be used in a marriage to take similar advantage of the other lifetime exemption available to a married couple.

Call with additional questions or to arrange a conference or Zoom call on any planning topic with you and your clients, or their advisors, at Tom Virkler, 706-614-3796, or tom@cpsadvancedmarkets.com. 

For What It’s Worth:  Considered by many the wealthiest celebrity couple, and thus much in need of estate planning, are actress Salma Hayek and luxury goods CEO Francois-Henri Pinault.  Married since 2009, the two share an estimated net worth of around $7.1 billion.

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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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Client’s Family History Have You Down? We Have a Solution!

If you feel challenged with significant adverse family history compromising your client’s ability to achieve Preferred rates, we have a solution.

Our Underwriting Team is here to help with all your impaired risk cases.

Here are some examples:
 
Example #1
  • 67- year- old male
  • 5’10”, 190 lbs.
  • BP averages 140/84, total cholesterol 218, & Chol/HDL ratio 4.6
  • Father died at age 45 due to a heart attack and mother died at age 60 due to advanced breast cancer
  • No other adverse medical history in his APS records
Underwriting Decision: Preferred Best!
 
Key Factor: Family history is NOT considered when the proposed insured is older than 65. Therefore, the fact that our individual had two parents dying of heart disease/cancer at age 60 and younger had no bearing on the final decision.
 
Example #2
  • 42- year- old female
  • 5’3”, 154 lbs.
  • BP averages 130/80, total cholesterol 220, & Chol/HDL ratio 4.2
  • Both hypertension and cholesterol are currently being treated with medications
  • Father passed away at age 59 due to prostate cancer
  • No other adverse medical history in her APS records
Underwriting Decision: Preferred Best!
 
Key Factor: Gender specific cancers are not considered on proposed insured’s of the opposite sex. Since our female applicant’s adverse family history was due to a male disease, it also had no bearing on the final decision.
 
Please contact us today for more information about this carrier and how we can help boost your sales.

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