by Patrick Swayne | Oct 14, 2022 | Uncategorized
You recognize the importance of knowing what your clients are passionate about in their lives. It is also critical that you are kept informed of any changes in their family, career, or finances. Part of your ongoing due diligence should include assessing the impact of these changes on achieving client goals and, if necessary, recommending adjustments to their strategies to keep them on track. Even if the outcome is simply to stay the course, your proactive review can help deepen relationships. Term policy Is it close to the end of the level term period?Is the coverage appropriate for the client?Conversion options If the client is healthy, it should be compared to the newly underwritten policy.Does the coverage go out far enough? Waiting will be more costly than just having the increase in premium now.What kind of health is the client in right now? Maybe they can quit smoking and acquire read more
by Patrick Swayne | Sep 30, 2022 | Life Insurance, Uncategorized
Do you have any clients with the bulk of their wealth in qualified plans such as 401(k), 403(b), or 457? Do these same clients have children? And is leaving money to them a priority?With the SecureAct eliminating stretch IRA’s, leaving money to the next generation through a qualified plan or IRA is less efficient than ever before. Plan Goal Here is a great presentation that any of our agents/advisors can put together fairly easy for any client who owns a qualified plan. The goal of this presentation is not to steer the client towards buying life insurance, but it is rather an analysis to determine what strategy best fits their needs & wishes. The idea is to show the client a side-by-side comparison of them keeping the status quo, continuing to grow their qualified plan, and then eventually take required minimum distributions. The presentation even offers the options of showing the read more
by Patrick Swayne | Feb 17, 2022 | Uncategorized
An interesting solution using Hancock’s 2nd to Die SUL. This is one of the few products we have seen that has really stood out in a market where guaranteed products are consistently re-priced in a negative manner. The Protection UL provides a guarantee that lasts to late 80’s/90’s even though it is not fully guaranteed, depending on issue age. We have a couple of advisors who have been using 2nd to Die as an asset replacement strategy for qualified money of clients. Qualified money will be fully taxable when left to beneficiaries.Spouses are able to take withdrawals over their life expectancy, but that is not the case with non-spousal beneficiaries. Non-spousal beneficiaries will need to take ALL the money out within 10 years. That means getting hit with a much larger tax liability, especially if there are limited beneficiaries and the qualified money is a large sum. Case Study. Two 60-year-old clients read more
by Patrick Swayne | Feb 3, 2022 | Uncategorized
How many times do we encounter clients with small health issues, who want some form of life insurance coverage? It happens all the time. Diabetes, as an example, is one health issue that arises more often than not, and can sometimes rear its ugly head when clients get older. Fortunately, Diabetes is not an automatic decline, and many times we can get clients coverage at a reasonable offer/premium. However, for those older clients (60 and above), paying an increased premium on a term policy might not be all that attractive. The thought of paying a higher premium and not having any payoff on the backend can be troubling to some clients. Here is a possible alternative: Case Study Here is a case study where we can utilize a special program, called table reduction, using a Lincoln permanent policy as an alternative to paying a rated premium on term. Let’s assume this 63-year-old read more
by Patrick Swayne | Aug 13, 2021 | Uncategorized
Clients need to start taking RMD’s by April 1st of the year after they reach age 72. This is the new rule that is in effect. For those clients that have accumulated a good deal of assets, this could mean taking required minimum distributions that they DON’T need. As an example, a couple of age 72, who have a combined $2M worth of qualified plans, would need to take a gross distribution of $78,125. See the chart below. Based on how RMD’s are calculated, this generally means that a client’s qualified plan balance declines dramatically in their later years. How can clients retain more of that value to leave to their loved ones? A 2nd to Die policy would provide clients with a leveraged & tax-free approach to leave money to the next generation. Here is a sample quote showing two 71 year old’s (male- standard plus non-tobacco & female- preferred non-tobacco). read more
by Patrick Swayne | Apr 1, 2021 | Uncategorized
A term conversion is a contractual obligation a client has, to convert his or her term policy to that specific carrier’s permanent product(s) without having to go through underwriting again. Each carrier has its own specific rules for term conversions, with some carriers having more favorable options over others. For instance, some carriers will allow conversion to their entire permanent portfolio for the entire level term period, up to maximum age (could be anywhere from 65-75). For those clients that value having these better conversion options, it important to take note of the term conversion guidelines when looking at term policies when first purchasing. Typically, the carrier will allow the insured to convert to the permanent policy at the same rate class he or she was approved at the term policy. However, we have seen carriers downgrade an insured’s rate class if the rate class on the term no longer read more
by Patrick Swayne | Feb 19, 2020 | Uncategorized
With the SECURE Act passed by Congress, there is a huge opportunity to talk to you clients about permanent life insurance. The goal of the act was to encourage more businesses to offer a retirement plan to their employees. However, in order to cover the costs of some of these benefits, the act also took away the Stretch IRA. The Stretch IRA was a way for non-spousal beneficiaries to stretch out distributions over their life expectancy when inheriting an IRA/Qualified plan. This would allow the beneficiary to maximize their lifetime distributions while minimizing taxes. With the elimination of the Stretch IRA, non-spousal beneficiaries will now have to liquidate the account within 10 years. Here is an example – PRE- SECURE ACT 60 year old male client has $500,00 in his IRA- assuming he takes appropriate RMDs at 70 ½ (5% growth), he would leave an account worth $663,000 at his read more
by Patrick Swayne | Nov 21, 2019 | Life Insurance
A contingent beneficiary is a beneficiary that is next in line if the primary beneficiary pre-deceases the insured. If an insured does not have a contingent beneficiary and the primary beneficiary dies before the insured, then the insured’s estate will be next in line to receive to the death benefit proceeds. This is assuming the insured does not make a change. The issue of leaving death benefit proceeds to an insured’s estate is that the proceeds become susceptible to creditors of the estate. Even if there are not creditors, the proceeds will be distributed through probate according to intestate law. The state in which the insured’s estate is settled in will determine who gets the proceeds. This may be entirely against what the insured wanted to happen when he or she took out the policy. An example might of an undesirable beneficiary could be a son who is addicted to read more
by Patrick Swayne | Aug 8, 2019 | Uncategorized
Why would anyone use life insurance to supplement their retirement? Life Insurance provides valuable death benefit protection. But a properly designed cash value life insurance policy can also provide living benefits in the form of tax-free distributions. Let’s look at some of the primary reasons why it is a valuable solution for many clients looking to save for retirement. Tax Diversification One of the primary reasons to use life insurance in one’s retirement planning strategy is for tax diversification. Before looking at why the tax-free advantage is important, let’s first look at what the options the client would have otherwise. A client has the option of three different traditional investments for funding of their retirement. They can use a tax-deferred vehicle, like a 401(k). They could fund a taxable investment like mutual funds, stock, and bonds. And lastly, there are tax-advantaged assets like the Roth IRA and municipal bonds. And read more
by Patrick Swayne | Jul 17, 2019 | Uncategorized
Sell the plan that works when your client can’t. Anyone gainfully employed has an asset worth protecting. That asset is his income. Disability insurance provides income in the event a worker is unable to perform the duties of his job. Workers take a big risk without disability insurance. It’s hard to fathom how much an impact it can have. The one key question that should be asked is: “What asset or assets would you use to cover monthly expenses if you were to become disabled?” If your client doesn’t have a valid asset to pull income from, then it cannot be emphasized enough how important it is to get them covered with disability insurance. A client’s entire financial plan can come crashing down in an instant without a steady income coming in. A disability policy will charge a specific premium based on: The insured’s occupation, health (including tobacco status), and income benefit read more
