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Opportunities In The Critical Illness Market Today

Many middle-class Americans who face cancer, heart disease or other serious illnesses also face thousands of dollars of debt. Even with Health Insurance, the additional cost for specialist care, unique treatments, and high deductibles add up quickly upon a critical illness diagnosis.

Fundraisers on crowdfunding websites like GoFundMe have become a popular way to find financial help in times of a healthcare crisis – yet only 1 in 10 campaigns meets the financial goal.

The Need Is Real
 
Think of the difference $50,000 could make for a person who has just been diagnosed with a serious illness such as cancer or heart attack. There’s never been a better time to reach out to your clients who have a family history of cancer or heart disease and offer Critical Illness (CI) Insurance.
 
We’ve taken steps to streamline the process with our Critical Illness Insurance carriers. A client can get up to $75,000 benefit with no exam or interview. Simply submit a complete online application through www.cpsinsurance.com and you will have an answer within 48 hours.
 
Higher deductibles and healthcare costs are adding stress to people’s lives and budgets. Your clients will understand the importance of Critical Illness Coverage when you mention it to them. Help them fill the financial gap at a time when they need it most.
 
Contact your dedicated CI Specialist. We will guide you through the simplified process and provide you with everything you need to add this to your product offering. Spend 30 minutes with us to become proficient at offering Critical Illness Coverage.
 
Source: Chicago Tribune, “Medical GoFundMe campaigns are a symptom of a sick health insurance system,” August 23, 2018.Source: Chicago Tribune, “Medical GoFundMe campaigns are a symptom of a sick health insurance system,” August 23, 2018.
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1035 Exchanges – Keep Your Hand Out Of The Cookie Jar!

In his work, A Collection of Polite Conversation, Jonathan Swift used an idiom that spoke to the difficulty of transforming a man of coarse origins and crude behavior into a proper gentleman, having one character simply state, “You can’t make a silk purse out of a sow’s ear!”
 
But to sully or spoil something good is another and an easier matter. No better example illustrates than misconduct during the non-taxable exchange of a life policy.
 
A universal life policy is a beautiful thing. Among the usual tax advantages is the feature (for non-MECs) that allows for the tax-free withdrawal of premiums; i.e.,  first-in/first-out (FIFO) distributions.
 
A silk purse indeed, but more a sow’s ear when FIFOs are attempted incidental to a 1035 exchange. Consider:
  • A life-for-life 1035 exchange must be a strict policy-for-policy transaction.
  • Anything received other than the new policy is considered “boot.”
  • Boot is taxable to the extent there is any gain in the old policy.
  • A withdrawal from the old policy taken incidental to the exchange is considered boot!
  • The IRS has never been clear how long prior to an exchange a withdrawal must be made to avoid treatment as boot.
  • Even recycled withdrawals used to pay off policy loans before the exchange are considered boot!
There are many reasons that a client may want to access a policy’s value at the time of an exchange. Alert them that there may be issues. Then come to us with your case to see if there are strategies that could avoid taxation or, at least, avoid the consequences of withdrawals. Contact Tom Virkler, JD – Director of Advanced Markets, at tom@cpsadvancedmarkets.com or (706) 614-3796
 
For What It’s Worth: Jonathan Swift might advise that creating boot is killing the goose that lays the golden eggs, or snatching defeat from the jaws of victory, or creating a fly in the ointment, or throwing the baby out with…
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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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A Healthy Lifestyle Will Give You Wellness Credits!

Wellness crediting programs can help give clients who maintain a healthy lifestyle the potential to be upgraded to a better underwriting offer and price.

For example, one program is open to:
  • All Ages
  • All Face Amounts
  • Most of their product line (some product exceptions apply)

An insured may be credited up to two classifications, including from Preferred to Preferred Plus. This crediting program can improve substandard ratings, too.

Some of the criteria includes:
  • BMI range of 22-29 (ages 18 and older)
  • Untreated blood pressure < 120/80
  • No incidents of CAD, diabetes or cancer in parents or siblings prior to age 60 years, or both parents live to age 75 or older
  • Normal routine colonoscopies, mammograms, pap smears, CBCs, skin checks in the last 3 years
  • Hemoglobin AIC readings 5.0 – 5.5 range in the last 12 months

Call the Underwriting Department to discuss your client’s health history and this program for the best possible outcome!

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Why You Need To Talk About LTCI

Most people envision themselves living a long life, investing and planning throughout their working years to create a financially secure future where they can enjoy spending time doing their favorite things.
 
As part of your client’s financial planning process, it’s important to understand the potential impact that needing long-term care may have on their assets, their family, and their future.

The reality is, as people start to live longer, the greater the likelihood is that your clients will require long-term care.

The costs associated with long-term care are significant.
 
While it can take decades to accumulate the assets they’ll need to retire comfortably, just a few years of paying for long-term care may threaten a lifetime of savings.
 
If you’ve ever been in a care-giving situation, you understand the physical and emotional toll it can take. While providing care to loved ones is an act of compassion, placing these burdens on spouses, children and other family members can create a significant emotional and physical strain, and is something that many people would like to avoid.
 
Don’t wait to address your client’s long-term care needs.
 
Incorporating Long-Term Care Insurance into financial plans today can help protect assets, reduce the burden of care that would otherwise fall on family members, and enable clients to receive care in the setting they most prefer, including their home.
 
Perhaps the greatest benefit: Long-Term Care Insurance allows loved ones to care about, rather than care for, each other.
 
We’re here to help you design a plan that is both affordable and the best solution for your clients’ needs – contact your LTCi Sales Reps for guidance.
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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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The Best Use Of Unneeded RMDs!

In December of 1788 New Hampshire became the ninth state to ratify the newly drafted U.S. Constitution, assuring it would become the law of the land. The great sage and statesman, Benjamin Franklin, wrote to a friend, “Our new Constitution is now established, and has an appearance that promises permanency; but in this world nothing can be said to be certain, except death and taxes.”
 
Perhaps what Franklin didn’t emphasize enough was how unavoidable taxation would be for IRAs!
 

It’s all good times when contributions and account growth are tax-deferred, but when those salad days are over there is no avoiding the IRS.

 
Non-spouses who inherit an IRA must clean it out and pay tax within 10 years. But for most the payday begins at age 73 when the IRS demands taxable required minimum distributions (RMDs).
 
What do you advise a client who tells you they don’t need the RMDs? Franklin would probably suggest they recover the tax (and then some) by using the balance to purchase a life insurance policy!
 
But it takes a bit of attention. Carriers don’t approve coverage simply because your client can pay the premium.
 
Financial justification must be made, usually in two ways that most age 73-plus clients cannot fulfill:
  1. Earned income replacement – Most receiving RMDs no longer work!
  2. Anticipated death taxes – Most aren’t wealthy enough that death taxes are a concern, even in the 20 or so states that have their own death tax.
Fortunately, many carriers have adopted a third justification guideline allowing a policy on your clients who want to leverage their legacy using unneeded RMDs to purchase coverage on themselves.
 
The criteria differ with the carrier, and the applications require some explanation up front. So let us help you with your clients’ RMD planning, finding the best carrier and structuring the policy in a manner that will best serve the policy beneficiaries. Contact Tom Virkler, JD, Director of Advanced Markets at tom@cpsadvancedmarkets.com or 706-614-3796.
 
For What It’s Worth – Dr. Franklin’s portrait appears on the hundred-dollar bill. Slang on the street often refers to these C-notesas “Benjamins.” Since July of 1969 they have been the largest denomination in circulation and since then have declined by almost 90% in buying power.
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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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MEGA-LTC – Coverage With All The Advantages

The first car insurance was purchased in 1897, by Gilbert J. Loomis of Westfield, MA.It provided $1000 of liability coverage for an annual premium of $7.50. There is no record of how happy Mr. Loomis was when paying for the coverage, but in the 120 years since, few have been enthusiastic about buying automobile insurance. The premiums are high and unpredictable. Getting claims paid properly is difficult. And worst of all: accident-free drivers might as well be throwing the premium dollars out the driver-side window.
 

For a generation, similar complaints have been made concerning long-term care insurance, often discouraging your clients from buying the protection they need.

 
But those product shortcomings are gone! Consider introducing them to a policy that:
  • Guarantees premiums for the life of the policy and allows payment options ranging from single-pay to annual-for-life.
  • Guarantees benefits and allows for benefit inflation options.
  • Guarantees a death benefit, reduced only by the amount of any payments made for long-term care.
  • Guarantees a portion of the long-term care and death benefits even if scheduled premiums are stopped.
  • Guarantees benefits paid retroactively to day one after the 90-day elimination period is completed.
  • Guarantees payment of benefits in cash to be used as the policyholder sees fit.
  • Guarantees division of the benefits between spouses as needed.
  • Guarantees full or partial return-of-premium options in certain policy years if the policyholder chooses to end coverage.
And all the policy features have a range of flexibility in design so the coverage can be customized to meet each client’s particular needs and circumstances. Bring your clients’ long-term care planning to us.
 
For What It’s Worth – The first automobile manufacturer, the Oldsmobile Motor Company, was founded in Lansing, MI, the same year Mr. Loomis bought his policy, but the coverage was on a car he had built himself!
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Secure Total Protection For Your Clients

Picture a rising star in the world of professional baseball, a young shortstop with a promising career. As his performance continues to impress, his current team is eager to sign him into a long-term contract worth over $150 million.

Although he’s not yet a free agent, one of his trusted advisors realizes the importance of proactive planning to guard against any unexpected risks that could potentially derail his future earnings.

The Challenge

In this critical moment, the advisor, alongside the player’s agent and financial advisor, faced the challenge of securing comprehensive permanent total disability insurance.

The objective was clear: protect the athlete’s future contract and ensure financial stability should a career-ending injury or illness occur.

The Solution

We crafted a tailored two-year permanent total disability insurance policy valued at $12 million. Additionally, we included an exclusive Critical Injury rider offering up to $500,000.

This policy guarantees a lump sum benefit if the player experiences a permanent total disability, while the Critical Injury Rider provides added protection with a one-time payout for select accidental injuries 24 hours a day, on or off the field.

Let’s Connect

We specialize in crafting high-value, personalized solutions for professional athletes and high-net-worth clients. Our deep industry expertise enables us to provide unparalleled protection, ensuring your clients are shielded from life’s uncertainties.

Get in touch today to learn more about how we can help protect your clients’ financial well-being with the most comprehensive coverage available.

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