There’s nothing worse than starting a life insurance case, having your client sign the paperwork and waiting 30 days … only to uncover an obstacle in underwriting.
“Oh, I didn’t tell you about that surgery? That medication? That DUI I had a few years ago?” No matter how much your clients trust you, there’s often a tiny – but hugely important – bit of information they forget to share.
When this happens, the last thing you want to do is reapply with another carrier, or explain to your client why the quote you gave them was way off. We get it. While we can’t give you perfectly healthy clients, we CAN help you see potential roadblocks BEFORE they become a setback.
With Life PreView, you email your clients a personalized, secure questionnaire to get an accurate snapshot of their health history. It will ensure you have the right product, with the right carrier, quoted at the right price – no awkward conversations, frustrating delays or reselling needed.
Your clients can complete the questionnaire in their own home, at their own convenience. They just need to have the following handy:
Stop looking for perfectly health clients and start looking for perfectly set expectations. When you use Life PreView, you’ll ensure accurate pricing, faster placement and, more importantly, happier clients. Try it on your next application!
Access requires logging in to the Ash Brokerage Producer Portal. If you have a password, click here to enter your username and password, and you'll be taken directly to the Filter.
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If you have single sign-on, connect through your company page as usual, then click Underwriting, then Preparing Your Clients.
Imagine you’re me. And you have to stand up in front of a room of financial advisors and talk about the tax efficiencies of a certain investment vehicle. At first, everyone is alert and attentive. No one likes taxes, so everyone is ready to learn.
But then? I say the magic word: insurance. People slump in their chairs, check their phones … some even roll their eyes. Maybe just reading this, you’ve already lost some of your excitement. The objections are already flying through your mind:
Put your prejudices aside. What if, instead of mentioning the word insurance, I asked a simple question:
Is there a better way to own the S&P 500?
Would all those planners in the room want to listen? You bet. Do I have your attention again? Good.
No matter your prior experience with insurance planning, I’m willing to bet you’ve never heard the cash value life insurance story the way I tell it. I want you – and your clients – to understand the largely-unused and underestimated impact of IRC 7702, which is the tax code that makes life insurance an incredibly efficient vehicle for saving.
Tim Ash is known as a visionary in the financial services community. He is an industry leader who envisions a future where insurance is easy, affordable and an essential part of a sound financial plan. As CEO of Ash Brokerage, Tim has fostered an environment of success with team-focused empowerment and client-centered service. He has built a culture where people not only believe in what they do, but more importantly, they understand the reason behind their efforts.
I recently received a difficult call from a family friend. His brother Matt, age 44, had unexpectedly passed away, leaving behind a wife and two teenage children. He asked if I could assist with a review of Matt’s life insurance policy.
I met with him immediately and, upon seeing the policy, a slight bit of nervousness came over me because it was clearly a term policy. I took a look at the duration, which was 10 years … thankfully, the policy had been issued nine years prior and was in good standing as all premiums had been paid. My nervousness eased. I was able to tell my friend that Matt’s family will soon receive a tax-free benefit of $500,000.
This event really had me thinking about term insurance – its purpose and place in the market. If Matt had passed away just one year later, his policy may not have been there for his family. And, since Matt had purchased his policy from a college buddy who was no longer selling insurance, chances are he wouldn’t have thought of purchasing another policy, leaving a gap in his family’s financial future.
As it was, a terrible event was eased, just a bit, by immediate financial security. That’s what insurance does. That’s my love relationship.
I own term insurance. I have sold term insurance. Term insurance works, as is shown in the above situation. However, selling a term insurance policy and not following up with it comes with as much peril as selling a security and not paying attention to the market. By its very nature, term insurance is a temporary fix, a Band-Aid that will swoop in and save the day in the darkest moments of people’s lives. But it does have a shelf life that must be paid attention to.
Many reps say they will sell term and then convert the policy to permanent (usually universal life) when the client gets older. While a good plan, this leaves all of the control up to the insurance company. When your client needs to convert the policy, possibly due to declining health, will they still be able to?
Many insurance companies have limited the conversion period of their term products. If they can convert, what products are available to convert to? Many insurance companies keep just a single product available for conversions, many times this product is not something that your client would have considered purchasing if not forced to. Is that in their best interest? That is my hate relationship.
Today’s financial advisors don’t leave much to chance. They manage, they balance, they review and they make sure that their clients’ retirement income is secure. Yet many of these same advisors still pull out the term spreadsheet and sell a term product by price. They don’t have an insurance value discussion with their clients. How are their clients saving for college? How are they offsetting down market years in retirement? How are they accounting for the cost of medical care? Permanent life insurance can help with all of these things, and in a very tax efficient manner.
I can understand selling term insurance for a young family who doesn’t have two nickels to rub together, or for business partners who have a specific time frame they wish to cover. But for most other clients, AND for almost all clients who use a financial advisor, life insurance should be sold as a value proposition, incorporated into and complementing all financial plans.
Remove the love and hate, the yin and yang, the ups and downs that term insurance brings. Have a value added permanent insurance discussion with all of your clients and make sure they are covered whenever they may need it.
Your job – and ours – would be a lot easier if everyone knew more about life insurance. Unfortunately, it’s one of those financial tools that’s often neglected or misunderstood.
Pulling from their experience in the field, our Regional Vice Presidents recently answered a simple question:
What’s one thing you wish everyone knew about life insurance?
Check out their responses below – they could be a great conversation-starter for your client meeting … or they could even be an eye-opener for you!
Simply how inexpensive it can be. Most people overestimate the cost of life insurance by about three times. In reality, you can potentially protect your loved ones or business and provide peace of mind for less than the cost of your cable or cell phone bill. What’s more important to you, flipping through 300 channels or protecting your family?
I wish people understood that shopping for life insurance isn’t about finding someone to run you the cheapest quote. It’s about finding someone to take your actual medical file (paramed exam and attending physician statements) to the insurance carriers and highlighting all the positives you have to negotiate lowest premium you can personally obtain.
Many people approach life insurance from the wrong direction. It's not a car or a television or tickets to a movie – it's a strategic tool. At the end of the day, everyone should plan for an unexpected death. Life insurance is not always the answer, but it is often the most efficient way to protect your family's quality of life should that happen. The beautiful thing is these vehicles are becoming more flexible, so you're often able to mitigate more than one area of exposure with one purchase.
We all insure “things” – cars, homes, boats, motorcycles, etc., and may not ever “use” the coverage. I think we would all agree that people are more important than things, so why not insure more lives?! We know we will “use” the life insurance!
Life insurance is not an option. It is peace of mind. If you have a family, a business or a favorite charity, life insurance is the perfect solution to protect those who depend on you.
Life insurance is really about providing people peace of mind – it is an act of love. No other product can ensure your loved ones are financially secure, provide educational opportunity, help pass on a legacy to future generations and provide living benefits should you need them. It is the single most important tool in putting together your financial plan.
You don’t want to think about it until the inevitable happens and it’s too late. One simply MUST include insurance in their financial plan.
Simple: That you don’t have to die to use its benefits.
Life insurance is not a death sentence, and you don’t always have to die to benefit from it. Life insurance is not here to stop you from living your life – it’s here so you can live continue to live your life to the fullest, your way.
I wish everyone knew there is more than one use for life insurance. As products adapt and change in the financial space, why is life insurance overlooked and not viewed as evolving too? The financial services industry is about leveraging the assets you have to protect yourself and family from any unforeseen and negative events. With life insurance now being able to pay for long-term care and chronic illness events, solve estate tax issues, grow money and distribute it tax-free, etc., the proper solution can be beneficial for all.
I'm all about living benefits ... I think more people need to know about the ways they can use life insurance to protect their families and businesses in situations that don't involve death – chronic illness, critical illness, long-term care, and waiver of premium are under under-utilized.
Couples retiring at 65 will experience $220,000 of lifetime health care costs, according to Fidelity Investments. Life insurance with long-term care and chronic illness riders can provide protection for those expenses.
Life insurance is a diversification tool! Diversification isn’t just about bonds, stocks and cash – it also includes the rest of your financial portfolio, which are products outside of bank accounts and retirement plans. Diversifying your income stream and overall risk are two pillars when it comes to a comfortable financial plan. You may be exposed to risks you were not even aware of. Have a plan that is consistently flexible and you can win most situations – life insurance can help you do that!
I think folks need to understand life insurance is no longer just a death benefit/protection product. Where else can you get tax-free growth/income, and yes, eventually a tax-free wealth transfer without income limits, age restrictions, IRS imposed penalties, etc.? It's another tool to help manage YOUR life ... not just other people's lives after your death.
One of the more notable improvements to life insurance has been the integration of fully guaranteed death benefits with the strong potential for cash value accumulation. Today, we're fortunate to have many products that can provide both benefits simultaneously and, as a result, give customers more flexibility and options as they log miles down the road of life. You really can have your cake and eat it too!
I wish every advisor or wealth manager had the experience and satisfaction of seeing the benefits of life insurance in action. Whether it’s loans offering financial flexibility, living benefits for long-term care or chronic illness, replacement of income due to an untimely death, the liquidation of a deceased partner’s equity in a business for their family, or the retention of a business and/or estate’s value through the payment of estate taxes, insurance coverage can change lives.
You don’t always have to die to benefit from owning life insurance. Life Insurance can create a unique tax efficiencies that make owning it crucial to any financial plan, protecting our financial wellbeing from many uncertainties during our retirement years.
People don’t like what life insurance is … but they like what life insurance does. It’s often a scary and unappealing topic of conversation, but do your family a favor to sit down with your financial advisor to learn more about what life insurance can provide – immediate estate creation, cash at a discount when it’s needed most, tax-deferred growth, tax-free income potential, long-term care living benefits, and more!
I think a lot of people only see life insurance as a death benefit product that is “sold” to them, but really it’s a tool that can help solve the client’s overall goals and needs. It’s important to meet with an advisor so they can find out what keeps you up at night, what is important to you – whether it’s saving for retirement, funding your kids’ college education, estate planning, protecting your loved ones if something were to happen, long-term care or whatever it is … life insurance could be an incredible tool to solve those needs.
The one thing that wished everyone knew about life insurance is the full extent of its capabilities. What other financial product can protect your family, protect your business, and provide supplemental income for your retirement?! And by the way, did I mention that most of the time that’s on a tax-free basis?
We hear it often, “My client is healthy as an ox … he just base jumps,” or “I don’t understand why my client is being rated for mountain climbing – she’s clearly a very fit woman.”
Even if you may be correct in assessing your client’s physical health, the inherent risks remain with their hobbies. While those activities may be on the more extreme end of the spectrum when it comes to commonly seen avocations within the general population, there are risks involved with more readily participated avocations, such as SCUBA diving or auto racing. Those are often dismissed by the uninformed simply because they are more widely practiced.
Although that may be true, even the most careful individuals get tripped up by circumstances beyond their control. When an individual participates in an activity that elevates their exposure to such harm, they become a riskier investment for insurance companies to insure.
In addition to your client’s age and health status, several other variables contribute to how insurance carriers rate each activity, including level of participation, certification obtained, experience, location of activities, equipment used/not used, etc. Each of these variables affect your level of risk exposure.
For example, a healthy, 50-year-old private pilot with an instrument flight rating (IFR) with 20 years of experience flying, 2,000 total flight hours and 100 hours per year has less exposure to risk than a healthy, 25-year-old pilot without an IFR who has been flying for five years and has only logged 100 total hours with only 20 hours per year. Clearly, the 50-year-old has an additional certification and more experience. In this circumstance, it may be possible for the 50-year-old to obtain preferred rates, while the 25-year-old may be limited in rate class and have an additional flat extra tacked onto the premium.
Occasionally, depending on the avocation, some carriers will offer exclusion riders. This is when the carrier will agree to insure the individual and pay the benefit in case of death unless the insured died while performing the excluded activity. While many carriers offer aviation exclusion riders, other avocation exclusion riders are not as widely available – and when they are, the state of sale and more advanced ages further dictate availability.
When it comes to avocations, it’s important to know:
Check out our helpful questionnaire to help guide the conversation with your client. No matter the situation, we encourage you to ask questions and get all the facts. If you have a specific scenario you would like to discuss, please reach out to me at firstname.lastname@example.org or contact your dedicated Ash Brokerage underwriter.
Joe Taulbee has been in the life insurance industry for nearly 10 years with more four years as an underwriter, and he’s helped numerous families and individuals gain much needed financial security and peace of mind through the procuration of life insurance. He has passed all levels of testing through the Academy of Life Underwriting and is currently pursuing an underwriting fellow designation with ongoing LOMA coursework.
© 2018 Ash Brokerage LLC.