Life Insurance

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 […]

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.  Case Study.  Two 60-year-old clients had over $2M saved in qualified money, along with other assets.  However, they were very heavy on the qualified side of their investment allocation.  Once the advisor made it clear that leaving money to their children via the qualified route (2 of them) would be less than favorable, the client was open to suggestions.  After looking at using life insurance on a single life basis, […]

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 […]

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).  […]

Buying the right life insurance coverage with your future retirement in mind can make it easier for your family to handle finances when you die.  It can also help protect your money, manage your taxes and give you the opportunity to grow cash value which you can use for a variety of needs and activities. Here are some tips for using life insurance as part of your retirement planning. Permanent life insurance can help your retirement planning Permanent life insurance offers you a death benefit and the potential to build cash value that can be used to help supplement your retirement income. Perhaps one of the most interesting aspects of permanent life insurance is the ability to access the cash value. Cash value is generally tax-free through a policy loan.  Why is tax-free so important? Lower taxes during retirement If you use the cash value from your life insurance policy […]

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 […]

With everyone’s health on the radar a little more due to Covid, it is important to truly think long term about one’s life insurance.  For some, term insurance will still be satisfactory for what a client is trying to accomplish, which could be protecting lost income or a mortgage.  However, for other clients, it could be an opportune time to look at whether a term conversion makes sense.  With a solid conversion option, a client can choose to keep all or a partial amount of the term coverage that he or she had.  And the beauty of the conversion is that there will be no medical underwriting.  For any client who has had a significant health change, this can invaluable.  A term conversion is a provision that most life insurance carriers offer that allows an insured to convert all or a portion of their coverage to permanent, without having to […]

An important part of building a life with your significant other is creating a good financial foundation that can protect each other and your family. Knowing how to buy life insurance as a couple should be a big part of that plan. To find the best coverage for your partner, here are some tips. Buy life insurance for both of you Once you’re married and your lives are bound together, so too is your financial future. Life insurance is a vital component of your financial security. Chances are good that you depend on each other for financial support, and if you have children they also depend on you both. Your spouse can use the life insurance money for a variety of things, including:  Day-to-day living expenses Supporting your children Investments or future income The creation of an extra emergency fund Payments for your final expenses when you pass away Payments […]

It has been a tough couple of weeks learning this new normal, but we are pushing through and we are all here to help. The interest in life insurance is still quite high, especially with the concern about COVID-19. At this point carriers have made limited changes to their underwriting process, mostly concerning foreign travel. The largest change has come with paramed exams. Exams are being delayed or cancelled by clients, concerned about exposure to new people. Exam companies are also making changes, saying that examiners will only come if your client does not show any symptoms of illness. The good news is that we are set up to offer life insurance for your clients without the need for a paramed exam. You can apply with “drop ticket” application, or iGO electronic apps so that you and your clients can talk through the application remotely. The following products are available […]

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 […]