Protection Products

Protection and Longevity


Protection

What’s the one thing you want to live to see in your lifetime? For Mabel Ball, it was seeing the Cubs win the World Series for a second time. Mabel was born Aug. 6, 1908 – two months before the Cubs won the Series. She passed away at 108 years old, less than a week after celebrating their 2016 victory.

But baseball wasn’t her only passion – it was an outlet for the ups and downs she experienced through other aspects of her life.  As we move into 2017 and beyond, here are five areas where we can help others imagine, plan, and act differently during their working and retirement years, so they can find their own passion and live to see their dreams become reality.

Longevity

It’s no surprise – we’re living longer. During Mabel’s 108 years on Earth, life expectancies increased by more than 30 years. Today, individuals over age 85 represent the fastest growing demographic segment within America. Current statistics indicate life expectancy trends will continue to increase by 2.5 years every 10 years.

Increased life expectancies should be a great thing, but it creates a big question: how can we best be prepared to address the individual financial issues that accompany a long lifespan?  There’s no longer a choice; longevity risk must be addressed as part of any financial conversation.

The insurance industry is uniquely positioned to address longevity risk.  Over the coming years, insurance products that provide solutions to longevity – such as income annuities, DIAs, QLACs, asset-based long-term care insurance and cash-value life insurance – will become even more essential tools. It’s why we are investing heavily in a patent-pending analytical program to change the way Americans think about, plan for and enjoy retirement.  Look for more information to come in 2017 as we continue to change the conversation.

Health Care

In recent years, health care has been on a wild political ride, but no matter what happens with government regulations, the economic impact is certain.  Mabel was an anomaly, maintaining fair health until suffering a heart attack earlier this year.  Still, as we live longer, we generally need more care and assistance, and it doesn’t come cheap. 

We know long-term care can be costly – the current average nursing home cost is about $92,000 per year, and with inflation, that may double in 20 years. Unfortunately, very few Americans have affirmatively addressed this risk.

Today, only 8 million Americans have long-term care insurance.  Very few individuals and families will be able to absorb the economic shock of an extended health care event. And, the economic impact will be exacerbated by the emotional challenges associated with a loved one who needs assistance.

It’s time to think differently about the impact that long-term care, home health care or nursing home care can have on the dignity of the impacted individual and the financial and emotional impacts on their loved ones.  The question should not be, "Can we afford some type of long-term care protection?" The real question should be, "How can we best plan for these life events and ensure that our family is protected?"

Death

A wise man once commented, "... In this world nothing can be said to be certain, except death and taxes."  It’s true, even if you live to 108. 

Mabel shows us why we’re now issuing life insurance policies at older ages.  Traditionally, life insurance was only useful once you died. Today, thinking of a policy as only providing a financial benefit after death is short sighted.  Many extremely successful advisors have realized that life insurance should be thought of as a valuable asset within an overall financial portfolio.

2017 is the year to re-imagine life insurance as an asset uniquely positioned to offer more effective and efficient value than any other financial product.  We should change the conversation in order to focus on the current and positive attributes of life insurance. Properly designed and structured, life insurance policies and portfolios can accomplish all of the following objectives:

  • Essentially provides the equivalent internal rate of return of a high-quality bond
  • Addresses longevity income issues through tax-efficient cash withdrawal plans
  • Generates robust income streams to fund long-term care and chronic illness expenses
  • Provides a pool of money – or an income stream – to support legacy and charitable dreams and objectives
  • Provides tax deferral and offers an extremely tax-efficient design

As you can see, the value of these policies is not simply embedded in a benefit that becomes available at death – life insurance can be extremely beneficial while individuals are alive. Additionally, these are terrific financial products that offer individuals an opportunity to make a meaningful impact in the future through legacy and charitable actions.  

Taxes

And speaking of taxes … the recent election has created a lot of uncertainty around income and estate taxes. While we do not know what the future holds – we do know that the government needs tax revenue to function.  

 

Take the federal estate tax for example:

  • We do not know if the federal estate tax will be repealed, tweaked or fundamentally changed
  • We do not know the impact on gift taxes, potential carryover basis expansion, etc.
  • Most importantly, we do not know what the federal estate tax will be at the date of any individual's death  

 

With uncertainty, individuals may have a bias toward inaction. We believe inaction is not only counterproductive, but can be financially devastating in the future.  As people age, their health conditions generally deteriorate and insurance becomes costlier.

There are many strategies to optimize estate tax planning under current federal laws, and allow for flexibility if those laws change.  Prudent planners will not sit on the sidelines waiting for the future to unfold. Instead, they will take action and analyze current estate plans, irrevocable trusts, etc.

It is also important, given the uncertainty, to address asset allocation and asset location. A clients' overall financial picture should include a blend of taxable, tax-deferred and tax-free assets.  This approach will optimize financial positioning today and well into the future.  

Multiple Markets

When Mabel was born, the idea of a computer – let alone a smart phone or the internet – was nothing more than science fiction.  Today, technology continues to transform the insurance industry and make it more accessible.  Innovations such as electronic applications and accelerated underwriting will make smaller policies more readily available and easier attainable, opening up more solutions not just for the wealthy, but for everyone. 

We’re very excited about opportunities that will allow business owners, high-net-worth individuals and middle-income Americans to achieve what is important to them.  We’ve designed action-oriented plans, structures and processes which address the needs and opportunities of various demographic and industry groups.

 

We can’t all be lucky enough to live to see our dreams come true.  In addition to being a loyal lifelong Cubs fan, Mabel illustrates many of the reasons why we should be incredibly optimistic about the state of our industry today, tomorrow and well into the future.

While we cannot predict the future, we can take certain financial and longevity risks off the table and plan for not only for today but also tomorrow. It’s an obligation and a privilege to make sure that these issues are addressed and acted upon. We truly believe the best is yet to come!

Life Insurance Longevity Healthcare Finance

Life Insurance: Changing up the Traditional Recipe


Protection

This is such a magical time of year – so many fond, heartwarming memories, both old and new traditions year after year, from one generation to the next. It’s fair to say, regardless of your beliefs, many holiday traditions are centered around two things:

  • Loving others
  • Expressing that love through giving

 

My favorite holiday tradition involves a full blown baking marathon weekend, where we prepare 30 different types of cookies and treats, then make gift trays for family, friends, coworkers and neighbors. Having carried on this tradition for more than 20 years – from my mother and my mother’s mother – it’s been an amazing gift to see the joy it brings to others, especially when watching our children give trays to our neighbors.

 

Old Meets New

You may think traditions are hard to maintain in today’s fast-paced, commercialized society. I would challenge that thinking because many “old” traditions are easily upgraded – my family’s included! I have a pantry full of modern baking gadgets, a wealth of recipes/tips from the Internet and an abundance of stores where I can easily buy ingredients. All of these advancements provide the opportunity to do more, do it better and do it all in less time. The tradition remains, but the convenience is greatly improved.

 

The same applies to how our industry is evolving. Life insurance has been a “traditional” product in the eyes of most consumers, but we’re working to change up the recipe. Just like your holiday traditions, life insurance is based on:

  • Loving others
  • Expressing that love through giving

 

Complicated Meets Streamlined

Let’s start by changing the perception that all meaningful gifts are tangible, and that life insurance is “old fashion and complicated.” Over the last year, we’ve seen carriers progressively adopt automated underwriting enhancements to do just that.

 

Today, seven of our carriers offer streamlined underwriting programs, with face amounts from $50,000 up to $1 million, for ages 18-60. Qualifications vary from carrier to carrier, of course, but the majority of these programs target preferred/healthy clients. In an effort to improve the process of obtaining life insurance, carriers are utilizing conveniences like e-applications, streamlined underwriting and e-delivery.

 

We’re changing the recipe for traditionally underwritten coverage, too. We’ve seen carriers reduce age/amount requirements, many eliminating resting EKGs, physician’s exams and inspection reports – all of which are highly invasive for clients. As medical advancements extend our life expectancy, carriers are adjusting their expected mortality, as we’ve witnessed with specific impairments like hepatitis C, prostate cancer and even HIV.

 

Tradition Meets Improvement

These are the very beginnings of the changes we need to reach new markets, find new customers and start an improvement of traditions within our industry. The Ash Brokerage family will always honor of the tradition of helping you make the right choices for your clients – we’re also striving to improve that tradition and make it easier to give the gift of love.

 

About the Author

Jennifer Glessner knows every opportunity she’s entrusted with is truly a gift, whether it’s the advisor’s first or 100th policy. With 20 years of life insurance experience, she grew up in the business and has a vital understanding of where we were, where we are and where we are going as an industry. Her diverse background includes underwriting, sales, operation and leadership, and she’s also an Associate of the Life Management Institute and an Associate of the Academy of Life Underwriting.

Life Insurance Process Improvement Tradition

Ask an Underwriter: Why should clients be screened for diabetes?


Protection

November is American Diabetes Month and, ironically, the month for pumpkin pie! But … diabetes is about far more than skipping or modifying dessert. It’s a common condition affecting millions of Americans with potential life-threatening complications.

In fact, according to the American Diabetes Association, 29.1 million Americans, or 9.3 percent of our population, had diabetes in 2012, and 1.4 million Americans are diagnosed with diabetes every year.

So, even if your clients haven’t been diagnosed as diabetic or pre-diabetic, it’s important to understand the disease and its risk factors. One simple screening could save a life or a lifetime of complications! Unfortunately (or fortunately), their lab results can come back with surprising results.

 

Types of Diabetes

Type 1 diabetes

usually develops in childhood or adolescence (prior to age 30) and accounts for 10-15 percent of all cases. In Type 1, the cells in the pancreas responsible for producing insulin have either been destroyed or produce no insulin. Since no natural insulin is available, treatment involves injection of laboratory-manufactured insulin for effective control of glucose metabolism. Risk factors for Type 1 include autoimmune disease and a family history of diabetes.

Type 2 diabetes

is commonly associated with obesity and onset after age 30. A family history of diabetes is common, and sufferers probably inherit a predisposition to glucose intolerance, which is exacerbated by obesity. 

Gestational diabetes

starts or is first recognized in pregnancy, in a previously non-diabetic woman. It usually becomes apparent during the 24th to 28th week of pregnancy. Risk factors include family history of diabetes, obesity, birth weight over 9 pounds in a previous infant, unexplained death in a previous infant, congenital malformation in a previous child and recurrent infections. Thirty to 50 percent of women with a history of gestational diabetes develop non-insulin dependent diabetes within 10 years. 

 

Potential Complications

  • Diabetes Mellitus

    is a group of metabolic disorders characterized by chronic hyperglycemia from insulin deficiency or resistance, or both. It is usually irreversible and, although a reasonable lifestyle can be enjoyed, the late complications result in reduced life expectancy. Macrovascular disease leads to an increased prevalence of coronary artery disease, peripheral vascular disease and stroke. 

  • Neuropathy

    is damage to the small blood vessels that supply all nerves, causing numbness and tingling in the extremities, abnormal sensations and muscle weakness.

  • Nephropathy

    is a progressive kidney disease caused by damage to the capillaries due to longstanding uncontrolled diabetes.

  • Retinopathy

    is damage to the retina in the eye from microvascular changes which can cause blurry vision and, in extreme cases, blindness.

  • Proteinuria

    is the presence of excess levels of protein in the urine due to damage to the kidneys.

 

Testing – Hemoglobin A1C

The industry gold standard for identifying applicants with, and those at risk for, diabetes is an A1C screen. This test measures a person’s average levels of blood glucose, or blood sugar, for the past two to three months. It is measured as a percentage, and the ideal range is less than 5.7.

A hemoglobin A1C screen is stable, is not affected by glycolysis and does not require fasting, making it more reliable and accurate that a glucose test. These screenings can empower applicants to take control of their health, especially those who are pre-diabetic and have the chance to make life-saving changes.

So let’s all become aware – about diabetes or any disease. Ask questions. Educate yourself. Be an advocate for yourself and your clients. More importantly, know your number!

 

Learn More

Statistics About Diabetes, American Diabetes Association: http://www.diabetes.org/diabetes-basics/statistics/

 

About the Author

Debra Misko is passionate about her work and gratified to help clients find security for their family’s future. She has worked in underwriting for 21 years and has been with Ash Brokerage for more than eight years. A graduate of Schoolcraft College, she has a business degree and has also completed two of the Academy of Life Insurance Underwriting exams. 

 

UW Underwriting Diabetes

Why You Can’t Afford to Avoid Long-Term Care Planning


Protection

Personally, I’ve seen two family members require long-term care, and those care events were emotionally, physically and financially draining for everyone involved. Planning ahead could have made a world of difference.

Professionally, I’ve seen an advisor’s relationship with his clients negatively impacted when he avoided discussing LTC. Again, a little planning could have made a world of difference …

A Missed Opportunity

About two years ago, I received a call from an advisor whom I’d been trying to connect with for months. He apologized for not returning my calls and emails, and he said he needed my help, which made my day.

The advisor, who focused primarily on investments, explained that recently, one of his top clients came into the office and laid down two linked benefit policies – one for him and one for his wife. The client said he was at the bank when the bank’s advisor pitched the policies to cover their future potential LTC expenses, in return protecting the rest of their assets. This made sense to the client and his wife, so they moved forward, using excess cash they had sitting at the bank.

The client brought the policies back to the investment advisor to see how they would fit into the couple’s existing retirement plans. The client said, “We purchased these from the bank advisor because we know you don’t deal on the insurance side.”

Not only was the investment advisor upset because he lost business, but he also felt he let his clients down by not helping them prepare for potential LTC expenses. He also told me these same clients starting moving their money away … to the bank advisor. He said, “I need to be brought up to speed about LTC planning and available solutions before this happens again.”

Moral of the story: If you aren’t having LTC discussions with your clients, someone else will.

 

Your Chance at Redemption

The concept of a three-legged stool is used a lot in our industry. We usually position three needs and point out that any two will have a hard time standing without the third.

This is a simple way to position LTC planning with clients. You may have done a great job of planning their retirement income and wealth transfer plans … But what happens if their health becomes compromised? Their income and estate plans could be ruined. Tell your clients, “This is why I would like to discuss a plan that addresses potential long-term care expenses.”

By positioning an LTC plan as protection for your clients’ assets and income, you’re showing them you care about protect everything they have worked so hard to accumulate over their working years. You’re showing them how to support all three legs of their stool.
Your LTC team at Ash Brokerage is here to help you in any way we can. We understand you’re busy with many other aspects of the financial planning process, and LTC planning may not be your main focus. Let us help you streamline the process and grow your business along the way.

When you’re proactively discussing LTC planning with clients, you’re a step ahead of your competition. Want to get started? Check out last month’s post on opportunities within your existing book of business [LINK] or give us a call.


About the Author

Mickey Belt has been in the insurance industry for about four years and has been able to assist many advisors with incorporating LTC planning in their practices. He views LTC planning as a value-added service that advisors can provide to their clients to protect their assets. Mickey is currently working his way through the Financial Services Certified Professional® designation through The American College.

5 Opportunities Sitting in Your Book of Business


Protection

About a year ago, I gave a presentation on linked benefit solutions for a group of top advisors in Philadelphia, Pennsylvania. I started by asking, “How many of you have written a linked benefit case or think you have at least five clients who fit the profile for a linked benefit solution?” Only three advisors raised their hands …

But, as I walked through my presentation, many of them started writing on the handouts I provided. I explained that as our clients age, their needs and goals change as well. With a linked benefit solution, they can leverage a pool of benefits for long-term care if their health becomes compromised, or they can provide a death benefit for their beneficiaries if they don’t need care. Plus, many clients can use existing assets to fund these solutions! I gave the advisors several examples.

At the end of my presentation, I asked the same question … This time, every advisor in the room raised their hand!

I challenged the advisors to find at least one existing client who fits each scenario I discussed – I challenge you to do the same. If you have just one client to fit each of the profiles below, you can take your practice to a new level while helping your clients protect their retirement nest eggs.

You probably have a client who …

  1. Has an existing cash value life insurance policy
  2. Is taking required minimum distributions they don’t need for income
  3. Has an existing nonqualified annuity they don’t need for income
  4. Who says, “If I need care, I will spend down some of the money I have sitting idle at the bank (CDs, excess savings, etc.)”
  5. Has qualified funds they don’t need for income

If you have clients who fit any of the above scenarios, you have opportunities for linked benefit solutions within your existing book of business. Isn’t it much easier to talk with a client who already trusts you rather than going out and positioning a solution to a prospect that you haven’t yet built a relationship with?!

Help your clients “repurpose” an existing asset in order to protect the rest of their portfolio. Your LTC Marketing Team at Ash Brokerage is ready to help you implement linked benefit solutions within your practice. We’ll help you grow your book of business and protect everything your clients have worked so hard to accumulate over their working years.

About the Author

Mickey Belt has been in the insurance industry for about four years and has been able to assist many advisors with incorporating LTC planning in their practices. He views LTC planning as a value-added service that advisors can provide to their clients to protect their assets. Mickey is currently working his way through the Financial Services Certified Professional® designation through The American College.