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Are You Including Disability Coverage In Your Client’s Buy-Sell Planning?

When most producers and their clients think about Buy-Sell Planning for their business, they consider Life Insurance as the only vehicle needed in order to provide a source of funding for the buy-out of an owner.
 
It’s true that Life Insurance will provide for sufficient funding of a business continuation plan if the insured owner dies while the policy is in-force, but what happens if the partner doesn’t pass away and instead, they become injured or sick to the point where they are no longer capable of working in their normal capacity?
 
If you have used Disability Buy-Sell Insurance coverage as a companion to Life Insurance planning then your clients will be prepared for exactly this situation.
 
Including a Disability Income Policy in a Buy-Sell Arrangement Can Serve Two Main Purposes
 
It provides a source of funds to their business for the purchase of a disabled owner’s interest in a business while also providing compensation to a disabled owner for his or her equity in the business.
 
We can provide you with fact finders, valuation questionnaires and approach letters to help you to either review an existing Buy-Sell arrangement or to help you plan for the implementation of a new business continuation plan.
 
Once you have discussed and assessed the company’s need for including DI inside of their Buy-Sell arrangement, you can use it as a spring board to then promote Key Person Disability coverage, as well as personal DI coverage for any employees.
 
Success Story
 
Recently, we were contacted by a producer looking to secure a basic Term Life policy on a business owner. In discussing the need for the coverage, we brought up the concept of including Disability Income inside of the Business Continuation Plan.
 
The result was an individual DI policy for the owner and we are now working on providing plans for all of the Key Executives. Prior to this case, the producer had never sold a DI policy with us.
 
Getting Started
 
If you have written Buy-Sell Insurance Policies in the past but did not include any Disability Income Protection, it is never too late to reach out to your clients and offer them a complimentary policy review to ensure that the planning is still sufficient for their business.
 
While reviewing the Life Insurance inside of the plan, you can discuss the need to have DI policies including in the Continuation Planning.
 
Helping to protect your client’s business interests in the event of an untimely injury, sickness or death will further solidify your role as their primary insurance professional and will likely lead to additional sales opportunities within the business and referrals for new client opportunities elsewhere.
 
Call us today for help in starting the review process or for ways to enter the business insurance marketplace.
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Buy-Sell Planning And Frogs – Look Before You Leap

Aesop has a fable about two frogs whose pond dries up and are left to find a new home. One enthusiastically suggests they descend into a nearby deep well that would both provide water as well as shade on hot sunny days. With much caution the other replies, “But suppose the water should fail us. How can we get out again from so great a depth?”
 
When planning for business partners, don’t simply address the immediate concern upon the death or disability of a co-owner. Address the long-term problem created if the company relies heavily on the day-to-day involvement of the owner.
 
Before getting any signatures, alert your business clients that complete buy-sell planning must address two critical needs! Consider:
  • Need #1 – Funding the buy-out – Life or disability coverage provides the funds to assure the family of the deceased or disabled receives an agreed-upon price for their interest, and the remaining owner is assured of ongoing control.
  • Need #2 – Assuring ongoing success without the partner – “Key person coverage” with a company-owned policy provides cash to make up revenue shortfall caused by loss of a participating owner’s services.
  • Flexibility in the Use of Policy Proceeds – Once coverage for both is in force the benefits can be used for either need (e.g., when the agreed purchase price increases and an owner’s replacement cost deceases with the approach of retirement).
  • The “One-policy” Policy – Most carriers allow two owners to cross-own one policy that covers both needs when the agreement will result the purchaser being sole owner.
We are equipped to help you fully inform clients regarding their buy-sell planning so they can more efficiently talk to and make decisions with their legal and tax advisors. We are ready and available to take part in conversations with you and your clients and eventually, if needed, with their advisors. Contact Tom Virkler, JD – Director of Advanced Markets at tom@cpsadvancedmarkets.com or 706-614-3796.
 
For what it’s worth: Most frogs can jump up to 20 times their length, suggesting that Aesop might be fine with the first frog’s suggestion, depending on the depth of the well.
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How To Convert More Life Insurance Applications Into Paid Production

Surprises can be fun, but not when they’re thrown into the Life Underwriting process.
 
As producers, we all have experienced the challenge of making a recommendation, completing an application kit, and working through days, even weeks, of underwriting – only to learn that the client cannot qualify for preferred rates due to family history, or that they must pay a substandard premium because of multiple driving violations.

After all the work, how many of your applications actually end up being placed in-force?

Eliminate any unexpected surprises during underwriting.
 
We can provide you with tools that will aid in accurately assessing and qualifying your clients’ insurability.
 
Improve the percentage of applications that are converted into placed policies by performing a basic life needs analysis; asking the right field underwriting questions, and setting reasonable expectations with your client.
 
Qualify your impaired risk clients more accurately with one page fact finders we call Quick Quotes – with over 30 customized fact finders available online, there is a questionnaire available for almost any client profile.
 
Completed forms are analyzed by our dedicated Underwriting Department.
 
When appropriate, a member of the Underwriting Team will speak with you personally about your clients and provide directed questions about their health and medical history – the goal is to obtain tentative carrier offers before you make a carrier recommendation or take an application.
 
Completing a life insurance needs analysis and gaining an understanding of your clients desired premium outlay allows us to work backwards – maximize the insurance policy benefits while not going a penny over the client’s intended budget, even if they are adversely approved in underwriting.
 
Don’t assume all of your clients are healthy and will qualify at preferred best rates.
 
The reality is that less than 10% of all applicants qualify for the top tier rate class and the majority of clients are approved at standard rates. Take advantage of our services and expertise to avoid any underwriting surprises.
 
Contact us today to learn more about the resources available, and how you can improve your life application placement ratio.
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A Sweeter Deal – Impaired Fasting Glucose

In the years leading up to the development of Type 2 diabetes, most individuals go through an asymptomatic condition called pre-diabetes. During this time, fasting blood sugar levels may be slightly elevated and there may be other signs of disruptions in normal metabolism, such as high triglycerides, low “good” (HDL) cholesterol levels and excess fat around the abdomen.
 
Approximately 1 out 3 American adults have pre-diabetes. When caught at an early stage, it is possible to head off development of Type 2 diabetes with diet changes and weight loss.

One of our A+ carriers can underwrite favorably on pre-diabetes cases that show a stable, well controlled condition.

Take a look at this case study:
Male, 55 years old
Non-Smoker
Seeking Personal Coverage
 
  • History of hypertension that has been well-controlled with medication and exercise.
  • Two years ago, a routine annual check-up revealed a blood sugar reading that was higher than normal.
  • Follow up glucose levels remained elevated (in the 100-103 range), but never high enough to suggest outright diabetes. He was then diagnosed with Impaired Fasting Glucose.
  • His doctor suggested exercise and a change in diet to include reduced carbohydrate intake.
  • Has done well with his new diet and exercise regimen; ongoing lab testing has shown no progression in his condition.
This client had the beginning of pre-diabetes caught early by routine testing. Because he responded well to dietary changes and exercise, this condition has not progressed and he is at lower risk of developing diabetes in the next several years — if he maintains his new, healthy habits.
 
Potential Underwriting Outcome: Super Standard Non-Tobacco, with potential improvement to Preferred using this carrier’s Healthy Lifestyle Crediting Program.
 
Call your Life Underwriting Team to discuss your client’s medical history today and let’s work on your next success story!
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4 Ways LTC Insurance Provides Tax Advantages

When meeting with clients to discuss the benefit that a Long-Term Care (LTC) Insurance policy has on their overall financial plan, tax deductions might not be the first thing you emphasize, but should be one of your top five discussion points.

Taking the time to explain the tax advantages may provide the tipping point for clients who are hesitant about purchasing a policy.

Here are a few scenarios on how to approach each type of client:
 
The Client On The Fence
 
Many states offer a deduction or credit on paid LTC Insurance premiums, which can make purchasing coverage more attractive to your clients. For example, in the state of Ohio, residents are able to deduct the entire annual premium for their LTCI policies on their tax returns.
 
The Planner
 
If you are working with clients on their tax strategy, consider turning their tax refund into an LTC Insurance premium payment. It’s a great way to plan for the cost of the insurance and can make annual premium payments a non-event.
 
Business Owners
 
When a C-Corporation purchases a policy on behalf of its employees, and their spouses or dependents, the corporation is entitled to take 100% deduction as a business expense on the total premiums paid. If self-employed, clients can deduct 100% of their out-of-pocket LTC premiums up to the age-based Eligible Premium amounts*.
 
Current Policyholders
 
Clients who already have an LTC Insurance policy may not know about the tax deductions available to them. So during your annual review, be sure to educate them about a missed opportunity to take a tax deduction.
 
Contact your Long-Term Care Specialist today to learn more about the tax advantages of LTC Insurance.
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5 Key Reasons to Sell Disability Income Insurance

Adding Disability Income Insurance (DI) to your product portfolio can greatly benefit both your clients and your business. Here are 5 compelling reasons why selling DI is a smart decision:

Meets a Critical Client Need

According to the Social Security Administration, one in four people will experience a disability lasting 90 days or more before retirement age. DI ensures that clients can continue to cover essential expenses, such as mortgage payments, healthcare, and daily living costs, even if they are unable to work due to illness or injury.

Expands Your Product Range and Boosts Sales

Disability Income Insurance pairs well with life and health insurance, offering an opportunity to provide more comprehensive coverage and creating a more complete financial strategy.

Offers Attractive Commission Opportunities

DI typically offers strong first-year commissions and ongoing residual income for as long as the policy remains active – providing agents with a steady, recurring stream of income beyond the initial sale. Plus, many insurance carriers offer performance-based bonuses for selling DI.

Distinguishes You from Competitors

Not every agent offers Disability Income Insurance, which gives you an edge in a competitive industry. Positioning yourself as a provider of comprehensive financial protection can enhance your reputation as a knowledgeable, client-focused professional.

Fosters Long-Term Relationships

Selling DI builds strong, lasting relationships with clients who will appreciate your holistic approach to their financial security. These relationships often lead to higher retention rates, more referrals, and a stronger bond between you and your clients.

By incorporating Disability Income Insurance into your offerings, you provide clients with an essential layer of protection, support them in navigating financial risks, and strengthen your position in the marketplace.

Contact your DI Specialist today for assistance.

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The Insurance That Ought To Sell Itself!

We hear people say that something is, “As easy to sell as a bar of soap!” The expression derives from the fact that soap almost sells itself because it is a simple, common, necessity of life that is inexpensive and easy to carry out of the store!

Can we not make the same case for income replacement life insurance?

Consider:
  • It’s essential – Every wage-earner on whom someone depends needs it.
  • The risk is easily determined – Just use a carrier-approved formula: Earned Income x Anticipated Working Years Left.
  • Most are underinsured – …often having only group term ($50,000) or a policy whose face amount seems like a large sum until compared to the income actually lost over the remaining working life.
  • It is an economical solution – Because the period of risk is known, inexpensive term insurance fits the bill.
  • It’s simple – Level term insurance with a guaranteed death benefit and a guaranteed premium is the easiest product on the market to explain to a client.
  • It’s easy for you – More than any other sale, the speed and simplicity term policy placement is maximized by online application, underwriting, and policy delivery.
For assistance with marketing pieces or determining the best term product for each situation (it’s not always just the cheapest one!) get in touch with Tom Virkler, JD – Director of Advanced Markets, at tom@cpsadvancedmarkets.com or 706-614-3796.
 
For what it’s worth: If selling the suds is that easy, then the least demanding sales position may be in Unilever’s Beauty & Wellbeing Division which manufacturers the Dove Beauty Bar which is far and away the best-selling bar soap in the United States.
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No Adverse Underwriting For Family History Of Cancer

Family history of cancer can have an adverse impact on underwriting decisions despite a client’s own personal history of excellent health.

While most carriers limit eligible rate classes for this particular family history, there are still a couple of A+ carriers that do not underwrite family cancer histories at all.

This means a client with a family history of cancer can still qualify for all of the Preferred Rate Classes, including Best Class.
 
In addition, there are other carriers who disregard family history of opposite-gender cancers, such as, a male applicant whose mother died from uterine cancer or a female applicant whose father died from prostate cancer.
 
Let our Underwriting Team help you get the best offers for your clients with family history of cancer! Call us today.
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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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Why Disability Income?

As discretionary income tightens in most households across the country, many Americans have put the purchase of retirement and insurance vehicles on the back burner, leaving themselves open to risk of severe loss and no way to indemnify.

While most would consider their greatest asset to be a house or a car, in reality a human’s most valuable asset is their ability to earn an income.

Without cash inflow, no insurance, investment, or savings product can be purchased and utilized. Disability Income is a commonly overlooked portion of the planning process yet can be the most important piece of the puzzle.
 
Common misconceptions about disabilities.
 
The main reason Disability Income is usually overlooked by Financial Professionals and their clients is the misconception of what causes a disability.
 
A recent consumer study released by the not-for-profit Council for Disability Awareness (CDA) reported that 71% of respondents said a disability is most likely caused by a serious accident.
 
In reality, insurance statistics show that only 9% of long-term disability claims result from serious accidents. The remaining 91% of income-interrupting disabilities come from common ailments like back and joint pain, chronic diseases, cancers, depression and pregnancy.
 
If your client becomes ill with any of the conditions or disabilities listed above and are unable to work for a period of time, will they have sufficient funds available to continue paying for their numerous financial obligations?
 
We can help.
 
We understand the challenges your clients may be faced with during periods of disability.
 
Our strong relationships with top Disability Providers allow us to help you find the best fit for your client regardless of their occupation.
 
Products range from simplified issue to fully underwritten with the goal of getting your client coverage as quickly as possible. Nearly all respondents in the CDA study rated their ability to earn an income as more valuable than any other resource in maintaining financial security. However, only 37% said they have thought about taking steps to protect their income. Don’t let your client fall into the remaining 63%, the need is real.
 
Contact your dedicated Disability Sales Specialist to learn more about how we can help your clients protect their most valuable asset.

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