Protection Products

5 Questions You Must Ask Your Relatives


Protection

It’s that time of year – do you have another family event this weekend? Whether it’s Mother’s Day, Memorial Day, a graduation party or a family reunion, our lives often revolve around visits with family.

However, longevity has introduced a new dynamic. Because we’re living into our 90s or even to age 100, our visits with relatives have taken on a new meaning – and often a new commitment.

 

Ask the Hard Questions

I have an idea. The next time you visit your relatives, ask them some important questions about the future:

  1. Where and how do you want to live in your 80s and 90s?

  2. Do you have a plan for when you slow down and need help with basic needs?

  3. If you need long-term care, do you have a preference for where and how it is provided?

  4. Who in the family will be responsible for making decisions about your care?

  5. Who in the family will be responsible for administering care?

These questions we often leave unasked because they are sensitive for you and those you love. But, if you explain that you’re asking these questions out of love and respect for their future, I bet they’ll be willing to discuss their plans.

This conversation isn’t just about their future – it’s about yours, too. Today, people living in their homes longer than any past generation, and any needed care is often provided by those closest to them. It’s noble of you if you are willing to care for a relative … But have you thought about how it could impact your family, your career and your health?

 

Look at Options

Having a plan is half the battle. Paying for that plan is another issue. Thankfully, there’s an entire suite of private long-term care insurance options to help your relative receive the care they need and allow you to provide support (not the actual caregiving):

  • A traditional plan can provide a monthly sum that will offset the cost of home health care, assisted living or a nursing home

  • With private long-term care insurance, the benefits are income tax free

  • We can combine life insurance with long-term care insurance, or even annuities with long-term care insurance

  • Some companies help you access your 401(k) to help create a private long-term care insurance plan

 

Your relatives aren’t getting any younger. Now is the time to begin the discussion so everyone can implement a plan for caregiving. You have to address the potential need, determine where you fit, and get your loved ones to embrace a solution that will work for the entire family. 

So next time you visit, don’t just stop by – start the conversation. As they say, “You’ll be glad you did.”

 

About the Author

Bryan Langdon is passionate about his work – protecting clients and their families. As Ash Brokerage’s national spokesman for long-term care and disability income, he knows it’s important for people to firmly believe in the solutions they are investing in or providing. That’s why he’s sharing the story of the powerful impact that insurance can create – and how the teams at Ash can help make it happen.

No Scare Tactics: Your Clients Need Insurance


Protection

Friday the 13th is a few days away, but now is not the time to panic. On this day that’s so often associated with bad luck and superstition, it would be easy to focus on sad stories where the lack of insurance protection exposed consumers and their families to overwhelming risk.

Instead, let’s talk about how diligent advisors can collaborate with insurance specialists at Ash Brokerage to help clients protect their hard-earned assets. Insurance should be sold on need, not scare tactics, so let's take a look at some typical consumer insurance needs. 

 

Everyone Needs

  • Level Term Life – During working years, life insurance helps families protect against loss of income from premature death so the mortgage can be paid, kids can go to college, and retirement plans can be completed.

  • Disability – Whether attained at work or individually, a disability contract is a key tool in protecting your client’s income if an accident or health event prevents them from working.

 

Many Need

  • Long-Term Care – Modern asset-based products allow clients to protect their assets from the risk of an extended health even without the risk of rising rates or loss of benefits if they aren’t used.

  • Permanent Life – Many high-income earners are frustrated with how much they can save for retirement on a qualified basis. Besides offering unmatched leverage at death, permanent insurance offers many Roth-like qualities to help people save tax-efficiently now and access their money on a tax-friendly basis later. 

 

Some Need

  • Business Protection – Business owners often spend more time working in their business versus on it. As a result, they rarely have updated or funded buy-sell agreements, plans to retain key employees, or documented exit strategies. An insurance specialist can help put all of them in motion. 

 

About the Author

As executive vice president of life sales distribution, Bob Klein is responsible for all of Ash Brokerage’s life, long-term care and disability income insurance sales. He is driven by his desire to help others get the most out of their natural gifts, and he gets the most satisfaction from seeing others grow and succeed.

 

Life Insurance Long-Term Care Business Owners Disability Needs

Disability Insurance: Key Coverage for Key People


Protection

Do you have clients who are business owners? Then you should be asking them some key questions: 

  • Do they have key employees who are critical to the success of their business? Are the business owners themselves the key employees? 

  • What would it mean to the business if their key employees were not able to work every day? Lost sales? Lost revenue? Lost clients? A potentially lost business? 

Nearly every business has key employees who are vital to its success – without them, the negative effects could be catastrophic. That’s why we’re having more conversations than ever about key person disability insurance. This type of coverage is critical to the planning process for business owner clients. 

How Key Person Disability Insurance Works

  • The coverage provides an indemnity benefit to the business owner, via lump sum or monthly payment, if/when the key person becomes disabled 

  • The policy’s overall benefit is a multiple of the insured’s income – usually up to two times their salary, but there may be some variation

  • Normally, there is a 90-day waiting period, but again this could vary

  • The benefit can be paid out for two years

You may already be familiar with key person life insurance – that’s a great product, too. The key difference is the qualifying event. With life insurance, it’s the death of the key person, but with disability coverage, it’s a disabling injury or illness. 

Either event could be devastating to the business, but there’s a much higher probability of being disabled during your working years versus dying. So, if your clients want to insure a key employee with life insurance, they should absolutely insure them with disability insurance as well. 

 

About the Author

As vice president of disability income and long-term care insurance at Ash Brokerage, Tim Kukieza knows coverage he helps place will dramatically and positively impacts clients’ lives when they need it most. His vast knowledge comes from more than 20 years of experience in the insurance industry, including working with a number a carriers before joining Ash Brokerage.  

DI Key Person Disability Insurance Business Owners

How ‘Major League’ Can Help You Pitch Long-Term Care


Protection

If you’ve ever seen the movie “Major League,” you probably remember it was about a baseball team made up of the biggest misfits anyone could put together. It was a team built to fail. (Spoiler alert: No, literally – the owner actually wanted the team to lose so they could move to another city.)

“Wild Thing” Ricky Vaughn had a great fastball, but, unfortunately, it was rarely a strike. Pedro Cerrano could hit a fastball into the next zip code … but couldn’t touch a curve ball. Willie Mays Hayes could run like the wind – too bad he couldn’t actually hit the ball so he could run the bases. Plus, manager Charlie Donovan used to manage a tire store … how could he manage to help this misfit team win?  

Long-Term Care Planning

The better question you may be asking is, “What does this have to do with long-term care planning?” Well, let me explain.   

First of all, the players on this team were out for one thing: themselves. Their focus was on what was best for them individually, not what was best for the team. They were blind to their real problems. This was especially true for Vaughn – he was literally blind to the strike zone and needed glasses to focus! When the rest of the team realized they were set up to fail, their focus changed, too. They had to come together, drop their old habits, and start focusing on what mattered. 

The same is true when it comes to long-term care planning. Both advisors and clients seem to be blind to what matters. I can understand why clients may be blind – we aren’t giving them the right tools (glasses) to focus on what they should really be looking at. As financial professionals, we have to make sure we’re throwing something they can actually hit, not lobbing in lazy pitches. 

  • Too often, we spend more time trying to sell clients insurance instead of discussing the impact a long-term care event could have on their family. Ball 1.

  • Despite knowing the above, we may have heard about a new product, and we wind up and throw a “pitch” as hard as we can. Ball 2. 

  • Sure, maybe we can throw a 100 mph fast ball, but if we can’t hit the strike zone, what does it matter? The same is true with showing clients a policy/strategy that gives them all the bells and whistles, but has an outrageous premium attached. Ball 3. 

  • Here comes the big one … some advisors say, “My client can self-insure.” But, even the wealthiest clients can appreciate the leverage and risk protection of long-term care insurance – we just have to show them the impact. Ball 4.

If we continue along this path, we’ll start walking in runs, losing games (sales), and the team (clients) may move to another city (advisor). So, how do we pitch so our clients can hit homeruns?

The Perfect Pitch

  • First, we start with the right conversation – the conversation about the real possibility of a long-term care event, and the impact it could have on their family.

  • Next, we make sure they see the positive, lasting impact this decision will have on their family and their finances. No matter their situation, long-term care planning is something everyone needs to ensure they get the care they want and deserve. 

  • Third, we help them find the right funding option, ensuring they get proper leverage for their investment. 

  • Finally, we show them a solution that actually fits their needs, not the solution of the month.

The next time you’re ready to pitch long-term care to your clients, grab your Wild Thing glasses and get focused – you’ll win more games and take your clients to the World Series. If you continue to lob your throws across the plate? You’re only setting yourself up to fail. 

 

About the Author

Chad Eyrich is proud to help keep families together with long-term care planning. He helps advisors and their clients avoid the potential financial devastation of an LTC event by providing strategies around traditional, asset-based and linked-benefit insurance. In addition to earning his Long-Term Care Professional and Certified in Long-Term Care designations, Chad has a life and health insurance license, and a property and casualty insurance license. 

long-term care LTC baseball

Comparing Life Insurance to a Roth IRA


Protection

Editor’s Note: The need for efficient retirement planning is evergreen, so we decided to re-publish this post from 2015. We’ve updated the numbers, but the conclusion remains: a few differences may allow high-income individuals to take advantage of Roth benefits through the purchase of cash-accumulating life insurance contracts.  

 

You’ve probably heard the sales pitch before: Life insurance is a Super Roth, a Roth on steroids.

But, has anyone really analyzed these comparisons and their validity? Let’s take a closer look at why life insurance is often compared to Roth IRAs with additional benefits.

 

Limits

To qualify for a Roth IRA, your clients have to fall under income certain limits established by the IRS. If they’re married filing jointly, their income has to be less than $184,000 to qualify for a full contribution. If filing single, their income has to be under $117,000. In addition to income limits, Roth IRAs also have annual contribution limits – currently the limit is $5,500, but people age 50 and over can contribute up to $1,000 extra per year to “catch up” before they retire. 

Life insurance, on the other hand, isn’t bound by any IRS income or contribution limits. Instead, it’s bound by insurable interest and medical qualifications.  

Access to Cash

In a Roth, your clients always have access to the basis without penalty. However, if they’re looking to access cash in excess of the basis before age 59½, they’ll incur a 10 percent tax penalty. There are exceptions for first-time homebuyers and qualified educational expenses, however.  

With life insurance, your clients may incur surrender charges in the first 10 to 20 years, depending on the contract. Outside of surrender charges, there’s no penalty for accessing the cash value in excess of basis before age 59½. It’s important that early withdrawals are closely monitored, however, as they could affect the performance of the contract and create a tax liability if the policy lapses.

 

Other Comparisons

Life insurance policies are self-completing and provide beneficiaries a tax-free death benefit – which is greater than the account balance – should the client die before retirement. (Please note that life insurance has cost-of-insurance charges to provide this benefit.) With a Roth IRA, the account balance passes to beneficiaries and may be subject to taxes. 

Beyond age 59 ½, both contracts allow the client to access the gain without paying capital gains tax. Neither contract requires a minimum distribution at age 70½ like a traditional IRA.

 

Conclusion

Life insurance and Roth IRAs have several similarities. However, a few differences may allow high-income individuals to take advantage of Roth benefits through the purchase of cash-accumulating life insurance contracts.  

Roth IRA Super Roth Retirement Life Insurance