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6 Core Needs Of Business Clients – And How We Can Help

Are you talking to your clients about Business Insurance? If not, you may feel that it would take years to become an expert.

We can help you provide free business evaluation services to your clients today!

We will help to address your business clients’ six core needs:
  • Retirement Income
  • Exit Planning
  • Income Protection
  • Business Protection
  • Wealth Transfer
  • Survivor Income
A sales associate will work with you to provide business case expertise and top-notch service before, during and after the sale! We will help you navigate through the planning process.
 
The process includes, but is not limited to:
  • Learn the Business Planning Services Approach
  • Learn whom to approach
  • Learn to build marketing campaigns
  • Help clients find the value of their business
  • Help clients review their buy-sell agreements
  • Help clients understand the reports
  • Help clients create an action plan
Working the process thoroughly will help your clients gain perspective on the value of their business, and identify any planning opportunities in their current buy-sell arrangements. Contact us today to learn more about this comprehensive service.
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Are You Following Up on Your Term Sales?

Term Insurance is often sold to clients who simply want the lowest cost death benefit protection for a specified period of time. Clients and producers alike will preach the concept of buying Term and investing the savings.
 
While we’d like to think that clients and the investors hold themselves accountable for this strategy and do invest their cost savings, we know it is more likely that the clients pay for the Term coverage and then spend their savings elsewhere. The Term Insurance is then forgotten over time only to be revisited once the level Term period has expired and the client does not want to pay the escalated premium.

One way to help your clients effectively plan for their long-term needs is to discuss the Term Conversion option.

Consider this:
 
By completing a conversion application, the client can change their coverage from a Term plan to a Permanent policy without any additional underwriting. This is usually allowed up to a certain age (commonly 65, 70 or 75 depending on the provider). The cost of these conversions is based on the insured’s attained age at the time of the request so the longer your client waits to exercise their conversion option, the more expensive the premium will be.
 
This should be a topic that you address with your clients on a regular basis to ensure that you do not let the conversion privilege expire and also that you are converting at the earliest, most appropriate time which can save your clients significant premium costs. It will also ensure that your clients have the coverage in place when they need it most – when they pass away. Since the average life expectancy is in the mid-80s, more often than not, the level Term policy will expire before your client expires.
 
Ask yourself if you have a process in place to address your clients who have purchased Term Insurance. Even if converting their Term plan isn’t the most appropriate course of action at this time, the review discussion may uncover additional needs for insurance or lead to referrals.
 
We can help you determine if your client’s Term plan has a conversion option and provide you the marketing support needed to turn these cases into permanent sales.
 
If you have any clients that may be approaching their conversion deadlines or who may be appropriate prospects for a policy review, call us and we can help get the process started for you.
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A Valuable Tool For Supplementing Retirement Income

Clients and prospects increasingly understand the need to supplement their retirement through their own savings efforts – as Social Security and company sponsored pension plans may not provide sufficient income for their retirement goals.

Qualified plans such as 401(k)s are an excellent way to save for retirement, but they are limited and are only available if provided by an employer.

Traditional IRAs and Roth IRAs also offer additional saving opportunities, but individuals must meet specific income and contribution limits in order to use these qualified accounts. As a result, clients and prospects need help finding additional solutions that will help them fill the retirement income gap.
 
Your clients recognize that they need to save as much money as possible, as soon as possible, in order to secure their financial futures. Fortunately, you are well equipped to help clients address their retirement income needs by relying on the knowledge and expertise available to you.
 
Life Insurance, properly structured, can be a valuable tool for clients to supplement their retirement planning efforts.
 
During their working years, death benefits provide cash when it is needed most – but these funds can be used to decrease debts and replace income so that loved ones can maintain their standard of living.
 
At retirement, your clients can access policy cash values via tax favored withdrawals and loans. In addition to these benefits, clients can also choose to add a long-term care rider that will provide valuable benefits should they have a qualifying long-term care expense.
 
For more information about how you can help your clients address one of their biggest financial challenges, while securing valuable protection against an untimely death or devastating long-term care event, please contact your Life Sales Rep.
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Why Gifting Matters to You

Gifting is an important tool in designing many types of Advanced Markets cases. Gifts can create opportunities but may also generate complications for producers and clients.
 
Questions you may be asking are, “How will knowing more about the gift rules help me in my career?” or “How will gifting help my client achieve their goals?”
 
Because your clients have the opportunity to realize significant financial and emotional value in making gifts, you will want to be knowledgeable about gifting. The financial and emotional value clients experience through gifting can be enhanced with Life Insurance.
 
Generally, it’s not difficult to convince clients that they need insurance, but it’s hard to find the money to pay the premium.

Gifting may be the answer for getting the necessary premium dollars.

With Life Insurance, gifts serve a similar purpose. A client may gift cash to an adult child so that child may purchase a policy on the parent/giver. When the giver dies, the child receives a tax free death benefit that can pay for services or items that the giver may have previously supplied.
 
Consider This
 
For example, a father has three children, but only two of whom have interest in owning real estate that has been in the family for generations.
 
To equalize his estate, the father gives cash to the non-business heir, Jill, so she can buy a Life Insurance policy on him. At the father’s death, the real estate can move to his two children that are interested in owning it, Jill receives cash from the policy’s death benefit while keeping the death benefit out of the father’s taxable estate.
 
Regardless of whether the gift is given for financial or emotional reasons, gifting can be a big part of a strategy to get clients closer to their desired goals.
 
For more information about gifting call your Life Sales & Marketing Representative.
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An Affordable Alternative To Estate Planning For Hesitant Clients

In today’s economy, some of your wealthier clients may be hesitant to purchase Survivorship Life Insurance coverage due to uncertainty, either in the market, estate taxes or their family’s circumstances. There is another way to cover their insurance need without the finality of a Survivorship plan or the cost.

We have contracts with carriers who offer the ability to convert Individual Term Insurance policies into a Survivorship plan during the designated conversion period.

Your clients receive immediate insurance protection while locking in their underwriting class. This approach requires less of a commitment coming out of your client’s checkbook while satisfying the total insurance need.
 
The policies can be owned individually or by an Irrevocable Life Insurance Trust (ILIT) and down the road they will have the ability to convert into a SUL plan at attained age if the uncertainty regarding estate taxes and the current market condition erodes.
 
Items to keep in mind when considering using an ILIT to purchase Term coverage.
 
First, if you use a trust, the individual who is not covered by the Term policy will need to provide evidence of insurability when the policy is converted to a SUL plan. Second, you could have the trust purchase half of the total insurance need on each spouse.
 
Using this method, the individuals will be able to acquire the total insurance need without showing proof of insurability at the time of the policy change.
 
If you have clients who are hesitant to address their estate planning needs and are taking a “wait and see” approach, you may want to introduce this strategy.
 
Our Life Sales & Marketing Associates can show you which carriers Term policies can participate in this concept and prepare quotes showing the most affordable options.
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Business Continuation Planning

Small business owners often wear many hats – they are HR, IT, Senior Management, and Operations all-in-one. Being a small business owner can be tiring and time consuming.
 
Appeal to this market by presenting them with a simple plan – so they can have peace of mind knowing their family and business will be in good hands when they move on.
 
Help business owners prepare for the future by using a Buy-Sell Agreement.

71% of small business owners surveyed said they have thought about who would run their business in their absence, but only 35% of all surveyed had a business continuation plan.¹

Many business owners don’t have formal plans to transfer their business to a successor in the event of retirement, disability or death. A business may fail due to confusion and lack of a clear plan after such an event.
 
As a life insurance professional, you can help business owners create a continuation plan using life insurance policies.
 
How you can help Business Owners with Life Insurance:
  • Establishes a guaranteed buyer at the time of the triggering event
  • Sets a price for the business when the business owner is less vulnerable and ensures the business will be sold at a fair market value
  • The surviving business owner(s) won’t have to run their business with the deceased person’s family members (if they choose not to)
  • Provides liquidity, when the family needs it most, to fund the sale of the business to surviving partner(s)
We will help you prepare business valuations, design the proper life insurance proposals – give you the tools to become a business insurance expert.
 
Contact your Life Sales Representative today and maintain a competitive edge in the business insurance marketplace.
 
1. Lifehealthpro.com, New Tax Laws Open the Door for Business Insurance Discussion, April 2011. Survey was based on 874 small businesses with 100 employees or less.
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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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Are You Missing Sales Opportunities With Your Existing Clients?

Your client’s needs are changing each year and the task of making sure that they are adequately insured rests with you, the producer.

There are a number of events that can trigger a need for additional Life Insurance such as the purchase of a home, the birth of a family member, a marriage or divorce and even a promotion at the office.

When these events occur, most people are not thinking about how much additional Life Insurance they might need. It’s more likely that they are considering how these events are going to affect their day to day life. That is why it’s essential that you have a system or method of performing a policy review on each one of your clients.
 
Consider This
 
When reviewing policies, you may come across clients who have purchased new insurance in recent years but have found that they would like to increase their coverage. We have a carrier that allows your clients to add a new policy at the same underwriting class as their recently placed policy.
 
The amount available in the policy is determined by the number of years since the coverage was placed and the approved underwriting rating on the policy. We can help you determine if the client’s existing plan would make them eligible to enroll in this program.
 
The need for additional coverage is only one component of a policy review. We can also review an existing plan to make sure it is still the most cost effective plan for the client. Perhaps the client’s existing policy has substantial cash value and the client is only concerned with death benefit protection.
 
Through policy review, we may be able to 1035 exchange the cash value into a new policy, pay the same premium and provide a higher guaranteed death benefit for your client. Our Policy Review Kit contains sample approach letters and facts to help you get the process started.
 
Call us today for a copy of the Policy Review Kit or any other policy review related support.
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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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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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