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It may seem counterintuitive that empty nesters or retirees need life insurance, but some still have dependents, such as disabled adult children. Many also still have financial obligations, such as the mortgage on a home or second home, that could become a burden if a spouse died or becomes disabled. More importantly, when death occurs for one spouse, the surviving spouse could live decades. Would they have to make drastic lifestyle changes to make ends meet? Death could reduce the Social Security benefits that have been counted upon. It could also bring unplanned medical and funeral expenses. Very few clients think of these issues- they feel like once the children are grown there is no need to maintain their life insurance or certainly apply for a new one.
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What if your client is retired or nearing retirement and doesn’t have life insurance? We may think that the client could no longer qualify due to age or health conditions. That’s not necessarily the case. Final expense insurance is a form of life insurance that requires little or no underwriting, which means almost anyone can qualify. Policies are available in face amounts typically ranging from several thousand dollars up to a maximum of $50,000 or $75,000—much less than a standard life insurance policy. That’s because these policies are only intended to cover final expenses and not longer-range expenses like ongoing living costs or college and retirement funding. Let’s talk about these very relevant topics to invigorate your life insurance business, or maybe to start you to incorporate these conversations with your clients. They rely on you.
When was the last time you truly prospected for Life Insurance, used a Fact Finder, and uncovered holes in a client’s planning? We’ve gotten smarter with the long tenure in this business but have we forgotten about what made us great professionals?
Eschels Financial Group is very excited and proud to present on Tuesday May 24, 2016 Edwin Hale JD, CLU, Assistant Vice President Advanced Markets with Accordia Life Insurance Company. Ed has 40 years of legal and insurance industry experience in the areas of Estate Planning and Business Succession Planning. He has been both a practicing attorney and a life insurance agent, with a focus on estate and business succession planning for the closely held family owned businesses.
Ed will spend a compelling 2 hours with us on:
ØNeeds Selling- How to approach a Business Owner
ØFact Finders- Estate Planning and uncovering the life insurance needs about which no one asks
ØJoint work with agents once they have obtained a Fact Finder, and assistance closing that sale (Yes, joint work and no commission split)
ØThis is a Workshop providing concepts and training, not a product discussion.
Please join us on Tuesday, May 24, 2016 from 10am -12 Noon in our office conference room at Eschels Financial Group 555 South Old Woodward Avenue Suite 755, Birmingham, Michigan. There will be a light breakfast served at 9:30am. Call our office to reserve your seat for this rare event and opportunity at 248-644-1144.
The successful industry professionals are those that explore opportunities and continue to strive for greatness by investing in themselves- be that professional!
We look very forward to spending the morning with you, as you glean all that is available from Mr. Ed Hale.
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Is anyone content with the interest rates on CDs at banks? Why would someone choose a CD over other safe money ideas? Certainly a CD is appropriate if the money has a definite intention: the client is saving that money for a trip, down payment on a home, a new deck/pool in the backyard next year- you see the picture. Short term safety with a short term intended use makes a CD very attractive and safe with no worry of principal loss regardless of market conditions. The interest rate is surely unattractive, however, but the knowledge that the client’s “money with a purpose” will be there when the event arises equals a perfect match. Does every client with a CD have an intended use for their lump sum of money? The answer is no, and most often does not have an intended purpose for it, but as we hear so often, ” I just don’t want to risk it.” Average CD interest rates currently are 2.35% for a 5 year CD and 1.84% for a 3 year CD. (source: Monitor Bank Rates April 2016) What does this all mean? There are alternatives to CDs for money that is without purpose, money that needs to be saved safely, and clients are mostly unaware of the alternatives.
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CDs have us pay tax on money we aren’t using. (Those interest rates are pre-tax- yielding less after taxes are paid- do we remind clients of this?)
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CDs don’t allow us to access our money without a penalty- there is no liquidity available. (Are clients aware they truly are ‘locking up their money’?)
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CDs don’t avoid probate at the time of death, unless held in a trust. (The client dies, how do their loved ones gain access to the CD?)
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Ask your next clients/prospects 3 questions:
1. How do you feel about the interest you’re receiving on your safe money at the bank? (This will tell you if they keep larger amounts there.)
2. Is that money intended for something specific soon, like a trip or home remodeling? (If the answer is as expected, no- we just don’t want to risk losing it and don’t know of any safe alternatives)
3. I have a few ideas to share with you that have been interesting and appropriate for some of my other clients, allowing them to not pay tax on money they’re not using, giving them access to some liquidity and a simpler way to pass that money to loved ones when that time comes. When can we get together ?
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It is imperative to explore all financial options for the clients- why let a client lapse or surrender a policy when determining there is an alternative. Life Settlements- Life Insurance , like every other asset, has a Market Value. Before your client considers letting a policy go, call us to discuss the specifics. And interestingly, all policy types are considered now for Life Settlements- even convertible term insurance. The reality is: you will set yourself apart from other advisors and agents by educating clients on Life Settlements and the options for the unwanted/unneeded life insurance. Clients remember you told them about an idea that others did not- and isn’t that what we want as agents and financial advisors? To be distinguished as unique, with different and compelling ideas for clients provides them with more than the average agent.
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Are you aware within Fixed Indexed Annuities and Indexed Life Insurance there are 100% participation in the various indices up to the caps? Are you aware there are uncapped (yes uncapped) index strategies allowing the client the full index performance less a spread? Why is any of this important? Because clients have told this industry after 2008 that they no longer can endure the wild rides with their money. They have firmly said they are aware they need some exposure to the non-guaranteed markets, but they now also know they must be more diligent with safety, as their individual lives are uncertain and when retirement happens often is not by choice but more by circumstance.
See the attached White Paper by Allianz Life Insurance Company “Reclaiming the Future”
Looking for the latest 2016 tax summary guide? Download here
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How will you guide your clients and prospects this year with new ideas? As we have known and anticipated for the last several years, interest rates are now on the way back up, and retirement income will be affected if bonds are the primary source. Have you considered the importance of showing a client what a guaranteed income would look like, one that has the opportunities to increase as the index performs?
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