Protection Products

Protect Your Clients from College Debt


Protection

If your clients’ children are looking at student loans, your clients should be looking life insurance.

Right now, deadlines are approaching for the Federal Application for Student Aid, and students may be looking at options to pay for college. While grants and scholarships are available, the ever-rising costs of tuition will likely force students to fund their education with loans as well. 

According to an article from the Wall Street Journal, 70 percent of the class of 2014 graduated with an average debt of $33,000 from federal, state and private loans. The longer they go to school, the longer it will take to pay it all back. According to an article from the Huffington Post, individuals with an associate's degree on average take 18.3 years to pay off their debt, compared with 19.7 years for those with a bachelor's degree and 23 years for those with a graduate degree.

Most parents of college-age kids are heading towards their retirement years and have financial obligations of their own. Before your clients cosign a student loan for their children, here are some questions to ask them: 

  • If you cosign a loan, did you know you are still responsible for your child’s debt if they are no long living?
  • How would you repay the debt?
  • Would you have to prolong your retirement or withdraw funds from your retirement account?
  • Did you know you could use life insurance to plan for this risk? 

Put it in Practice: It costs as little as $13 a month for $100,000 of coverage on an 18-year-old male for a 20-year term.* That coverage can not only secure your client’s financial future, but it can also protect their child’s future spouse and children. Ask if they can give up three cups of coffee a month for peace of mind. 

*Premium rates vary by a number of factors, including carrier, product client health and age, and a number of other factors. 

 

student loans college debt

Stop Trying to Sell – Start Asking Questions


Protection

In the last few years, I’ve been told over and over again how hard it is to sell long-term care Insurance. When I ask why, the “reasons” (or excuses) start flying in ...

  • It’s too expensive
  • Carriers are getting out of the business
  • There are no lifetime benefits
  • Rates could go up
  • My clients won’t need it

When I sit back and think, it seems like we are spending more time pushing products and less time helping clients put together plans to protect their families IF they need care. That’s right, I said IF. None of us thinks we’ll really ever need it, but then again, this isn’t about us. Long-term care planning is about our families. They will have to deal with the consequences of our actions – or inactions – not us. We will still get care.

But let’s get back to the excuses. I think we could get past all of this if we just stop trying to sell insurance. Think about the ways you present other solutions. 

When it comes to life insurance, we start by asking questions about the client’s family and goals, right? Why not just go in there with a $1 million life insurance quote? Or how about retirement planning … Do you just throw a prospectus on the table and say, “Buy this”? Probably not. 

So, why do we resort to these things when it comes to long-term care insurance? Are we just selling insurance … or do we want to give clients a plan to protect their family? 

Before you jump into your next sales pitch, back up and start with a few questions:   

  • Have any of your family members or loved ones needed some sort of care?
  • Would you agree that the longer you live, the greater the likelihood your health may become compromised and you might need care?
  • IF something was to happen and you needed care, how would you pay for it?

Let’s face it: Most clients don’t think that they will ever need care. I know I don’t. But, it isn’t about me – it’s about my family. If, and I emphasize IF, I were to need care, that last thing I want is for my wife or kids to suffer because I was selfish.  

Put It In Practice: If you want to make your life easier, and maybe help protect your clients and their families, STOP trying to sell them long-term care insurance and START asking them about their plan IF something were to happen. If you don’t want to go down that road, call us! We’ll be more than happy to be part of your team and have the conversation for you.

 

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long term care care planning

Split Dollar: Dead or Alive?


Protection

I can’t believe that 2004 was already a decade ago – things have changed since then! George W. was re-elected for his second term as president of the United States, a massive tsunami hit the Pacific Rim area, and Facebook was in its infancy and only available to college students.

Mixed up in all that was the start of the 2003 IRS rulings on the tax changes made to split-dollar plans – how that was lost in the mix, we’ll never know. Specifically, let’s talk about the changes to “collateral assignment” arrangements.

The IRS changed the favorable tax treatment of the premiums that were paid by the employer on behalf of the employee. These payments became considered loans, and the employee has to pay a “sufficient” interest rate as determined under the regulations, instead of the “interest free” loans that were allowed prior. If the loan doesn’t meet the adequate rate of interest, then regulations have a complex system of deemed interest flowing to the employee as income and then back to the employer as interest.*

Most companies and executives thought this was the end of the split-dollar train, but as Lee Corso would say, “Not so fast, my friend!” If set up properly, split-dollar plans still have a wide array of viability to attract and retain key employees and executives in the business marketplace. 

Split-dollar life insurance is widely used in gift and estate planning and can be an important part of the compensation package for key employees. Your clients don't have to cover all their employees – the coverage, amount and terms of the split-dollar arrangement are generally not subject to the nondiscrimination rules of the Employee Retirement Income Security Act (ERISA). Split-dollar plans can be used to:

  • Attract, motivate and retain employees 
  • Provide employees with low-cost life insurance  
  • Fund severance benefits 
  • Fund stock purchase agreements 
  • Fund nonqualified deferred compensation plans 

Put it in Practice: Don’t be afraid of something that happened more than a decade ago. With interest rates at near all-time lows, collateral assignment split-dollar arrangements might be a key to your clients’ recruitment, retention and success for the foreseeable future. Contact the Ash Brokerage Advanced Markets team to get started. 

 

*The Sarbanes-Oxley Act made it illegal for a company that is publicly traded to loan funds to an officer or director, and certain other key employees.  

 

Split-Dollar Life Insurance Advanced Markets

The expense that can pay


Protection

A steady income is a lifeline for most working people, but these days, it seems there’s less to go around. Americans feel like their paychecks are being stretched thinner, a recent Gallup Poll confirms. Other than the recent drop in gas prices, when was the last time you bought something and the price had gone down? Some expenses, like health care, can increase significantly each year.  

According to a study by the Brookings Institute, more than 25 million middle class American families are living paycheck to paycheck. It’s no shock the study also found, “Those living paycheck to paycheck have a tougher time weathering income shocks, such as illnesses or bouts of unemployment.”

So, adding a new expense – like disability insurance – to an already leveraged paycheck could be a hard-sell for your clients. But the REAL struggle would be not having a paycheck at all if they were sick or hurt. According to the Council for Disability Awareness, less than 5 percent of disabling accidents or sicknesses are work related, and therefore would NOT qualify for workers compensation.

Disabilities happen to people every day. They may not be life threatening, and they may not last for years, but even a couple months without a paycheck may create long-term financial and mental hardship. Yes, disability insurance is another expense, but it will provide priceless help should an accident or illness strike.  

Put it in Practice: Help your clients look past the expense of disability insurance and see the value of paycheck protection. Plus, getting them covered when they’re healthy and young makes the process easier and costs less money. Talk to the Ash Brokerage DI team today!

 

The Value of a Life


Protection

“Intrinsic value is not measured by how much money you make; it’s measured by the size of the problem you solve.” -Joe Jordan

Thirty percent of U.S. households have no life insurance protection at all. Among those that do own life insurance, 50 percent believe they don’t have enough coverage.* The question I ask myself is this: “Who’s taking responsibility to make sure these families are protected?” 

Last year, a close family friend succumbed to Leukemia. It was a two-year battle that included hope and gloom, joy and sadness, relief and desperation. When modern medicine was no longer enough to beat back her cancer, her family tried experimental drugs. When those failed, their only hope was prayer and a miracle. When she passed last fall, she left behind three young daughters, a husband and a heartbroken family.

There’s nothing our industry can do to bring this family’s mother back, and nothing we can offer to bring this man’s wife back – but what we can do is still significant. It’s beyond simply providing a check with a few zeros. We can make sure this family has the resources to provide childcare when Dad goes back to work, and we can make sure he doesn’t need to quit his passion (teaching school) in order to maintain their lifestyle. We can also make sure these girls can afford to go to college and have the resources to follow their dreams.

What we can give is peace of mind in the darkest of moments. What we can give helps families, businesses and charities to weather the storms that life inevitably gives us. What we can give helps men and women leave legacies that last long after they’re gone.

This brings me back to my question and leads me to the answer. “Who’s taking responsibility to ensure that these families are protected?” We are.

                

*LIMRA: “Facts About Life 2013”