Protection Products

Foreign Travel: Where in the World is the Risk?


Protection

So your client is planning a trip outside of the United States. While their travel list may contain things like flip-flops, sunblock, beach towels, and toothbrushes, a life insurance underwriter’s travel list will often include things like political climate, crime rate, access to health care, participation in risky activities, and length of stay. These are just some of the many angles from which an underwriter is going to evaluate your client’s foreign travel risk.

 

Political Climate

When an underwriter talks about political climate, they are often referring to countries or regions where governments may be unstable or where governments have unfavorable opinions of the United States. Of the many lenses from which an underwriter evaluates a case, this is likely the most obvious, because oftentimes, these areas are the ones commonly seen on the news – the Middle East, Venezuela, the Philippines, and much of Africa.1 While travel to these countries/regions may not eliminate your client from potential coverage, the political climate in these areas raises some obvious red flags in consideration for your client’s safety.

 

Violence

So your client isn’t going to a politically unstable region, they should be good to go, right? Not so fast … The local violent crime rate is a major factor an underwriter takes into consideration when evaluating risk. A prime example of this is Acapulco, Mexico. When most people think Acapulco, they think beautiful beaches, a bustling nightlife, and wonderful golf courses, but when you look under the surface, another amazing characteristic jumps out … Acapulco, in 2016, had the second highest murder rate in the world, checking in at 113.24 murders per 100,000 residents, which is nearly twice as high as the most violent city in the United States.2 This, again, won’t automatically eliminate an individual from coverage, but does have potential to result in an adverse action depending on the client’s plans while there.

 

Health Care

Another consideration while examining travel is access to health care. Should the client be injured or become ill during their trip, what is the quality of health care that they would receive? And, how far do they have to travel to receive care? There is a clear risk if health care is substandard or difficult to obtain.

 

Activities

While traveling, will your client be participating in any potentially hazardous activities, such as mountain climbing, SCUBA diving, sky diving, or any other avocations that could add to their potential risk? While many of these activities carry an innate risk in and of themselves, when compounded with possible language barriers and/or poor access to health care, an adverse underwriting action can occur.

 

Length of Stay

Lastly, the length of your client’s stay abroad may affect their potential rating. If a client is planning a trip that is less than six months, then assuming they otherwise qualify based on the above criteria, there is generally no concern. But, if their expected stay crosses the threshold of six months, they become foreign residents and thus are evaluated differently. In some cases, a country can be OK for travel, but not OK for foreign residence, and an adverse action may be taken.

 

Overall, there are many considerations that go into foreign travel risk. If you have a client who has travel plans in which you suspect may result in an adverse underwriting action, consider that clarity is key and that a detailed cover letter can eliminate many concerns about your client’s upcoming trip. Check out our Foreign Nationals and Travel Questionnaire, a guide that can help you collect all the information you need for underwriting. 

 

Should you have any questions about any of your potential clients, please don’t hesitate to reach out to an Ash Dedicated Underwriter, and we would be more than happy to answer any questions that you have.

 

Learn More

Foreign Nationals and Travel Questionnaire: https://ashcmsstorage.blob.core.windows.net/media//Docs/uw/impairment/Foreign_Nationals_and_Travel.pdf

 

1U.S. Department of State, Travel Alerts and Warnings: https://travel.state.gov/content/passports/en/alertswarnings.html

 

2Business Insider, “The 50 most violent cities in the world,” April 8, 2017: http://www.businessinsider.com/most-violent-cities-in-the-world-2017-4/#50-durban-south-africa-had-3443-homicides-per-100000-residents-1

  

About the Author

Joe Taulbee has been in the life insurance industry for nearly 11 years with more than five 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 an Associate designation (AALU) through the Academy of Life Underwriting and is currently pursuing an underwriting fellow designation with ongoing LOMA coursework.

Underwriting Foreign Travel Life Insurance

The AUM Right Under Your Nose


Protection

Most of the advisors we work with manage family wealth. You’re seeing more and more people migrate to this assets under management (AUM) practice – and, why not?! It’s a great business model, and you’re helping people build and manage their personal wealth. 

 

But I have a question. Are you walking by AUM that is right under your nose? I might be bold in saying this, but you likely are!

 

The reason is simple. Most practices are managing wealth for individuals and families – many of these folks are business owners. I’ll give you a hint: Are you managing their corporate assets as well? Or, are you letting those assets walk right out of your office? 

 

Literally BILLIONS of dollars are sitting in the coffers of businesses, earning next to nothing. Law offices, construction firms, farms/ranches, plumbing and heating firms – it doesn’t matter the type of company. Let’s be real. Most businesses have a lot of cash sitting on the sidelines, whether it’s in reserves, being held for bonding requirements, or just sitting in a rainy day, feel-good fund. 

 

Unfortunately, they are earning 0.0 percent on that cash if it’s in a bank … OK, maybe 10 basis points at the most.  

 

What are the Banks Doing?

Aside from holding your clients’ business cash for next to nothing, banks are doing something else that’s worth paying attention to … They’re holding assets in Bank-Owned Life Insurance (BOLI). BOLI is simply an institutionally priced life insurance policy for banks’ Tier 1 capital. 

  • As of Dec. 31, 2016, 62.2 percent of banks and savings associations reported holding BOLI assets – that’s up from 60.5 percent in 2015*
  • More surprisingly, when you look at institutions with assets between $1 billion and $10 billion, 82.8 percent of them hold BOLI assets*

 

Why do they use it? I’ll give you two reasons: 

  • BOLI gives them better yield than other instruments
  • BOLI comes with a death benefit

 

Are banks smarter than other organizations of that size? Why don’t other businesses use these types of products? Because they do exist!  

 

At Ash Brokerage, we have three different highly rated companies that offer BOLI-type products for businesses – from “mom and pop” companies up to large corporations. They can take $100,000 deposits, or we’ve participated in placements that have approached eight figures.  

 

Stop Letting it Walk out the Door

All you have to ask your business owner clients is one thing: 

 

“Do you routinely have significant cash balances sitting in your company? If you do, I’d like to show ways to put that money to work and use the same instruments that more than 82 percent of the largest banks in the country use.” (Oh, and the yields can be 2.5-3 percent NET of all costs … That’s a lot better than 10 basis points!)

 

Trust me, you will get a lot of interest if you ask! And when you do, please contact me or one of my team members on the Ash Brokerage Advanced Markets team – we will customize a design for you and your business owner clients.  

 

Take a closer look at this solution and see the numbers for yourself – join us for a webinar on this topic at 10 a.m. August 28.

 

GO DEEPER

For more, watch this 20-minute video with Tim explaining the topic in further detail.

Putting Cash to Work

 

*2017 Equias Alliance/Michael White BOLI Holdings Report: http://www.equiasalliance.com/2017-equias-alliance-michael-white-boli-holdings-report

Life Insurance Business Owners Cash Value

Ask an Underwriter: Why are Baby Boomers at Higher Risk for Hep C?


Protection

Hepatitis C is a blood-borne virus. Today, most people become infected with the Hepatitis C Virus (HCV) by sharing needles or other equipment to inject drugs. But, according to the Centers for Disease Control, baby boomers seem to be at higher risk – your clients could be infected and not even know it!

 

The CDC explains people born from 1945-1965 are five times more likely to have HCV than other adults. The reason is not completely understood. “Baby boomers could have gotten infected from medical equipment or procedures before universal precautions and infection control procedures were adopted. Others could have gotten infected from contaminated blood and blood products before widespread screening virtually eliminated the virus from the blood supply by 1992,” the CDC says. 1 

 

Know The Facts

The Hepatitis C virus is a common, infectious virus that targets the liver; still this illness can appear in many other body systems and organs. Studies have found that between 70 and 74 percent of those with Hepatitis C experience extrahepatic (outside the liver) manifestations which could affect the brain, eyes, thyroid, joints and muscles, digestion, glucose control and the hands and feet.2  

 

For some people, hepatitis C is a short-term illness, but for 70-85 percent of people who have HCV, it becomes a long-term, chronic infection.3 Chronic HCV is a serious disease than can result in long-term health problems, even death. Unfortunately, the majority of infected persons may not even be aware that they are infected as they do not feel ill nor do they experience chronic symptoms.

 

There is no vaccine for Hepatitis C. The best way to prevent it is to avoid behaviors that can spread the disease, especially injecting drugs.

 

Who Should Get Tested

Per the CDC, the following people should be tested for HCV at least once in their lifetime:4 

  • Adults born from 1945 through 1965, even with the absence of prior risk factors, i.e., drug and blood transfusions
  • Those who are currently injecting drugs, or have ever injected drugs, including those who injected once or a few times many years ago
  • People with certain medical conditions, including those who received clotting factor concentrates produced before 1987, or who were ever on long-term hemodialysis, with persistently abnormal alanine aminotransferase levels (ALT), or those who have an HIV infection
  • Prior recipients of transfusions or organ transplants, including those who were notified they received blood from a donor who later tested positive for HCV infection, or received a transfusion of blood, blood components, or an organ transplant before July 1992
  • Health care, emergency medical, and public safety workers after needle sticks, sharps, or mucosal exposures to HCV-positive blood
  • Children born to HCV-positive women

 

Treatment – HCV Can be Cured!

Harvoni (ledipasvir/sofosbuvir) is currently one of the most advertised prescription treatments for HCV and has shown tremendous results. In clinical studies, most patients with HCV genotype 1 who had no prior treatment were cured with just 12 weeks of therapy. Most infected patients are experiencing little side effects and are able to tolerate the medication. 

 

Unfortunately, the cure rates are not as high for people with cirrhosis who were previously treated unsuccessfully with interferon-based hep C regimens, people with decompensated cirrhosis and those with genotype 3 of hep C. 

 

The typical treatment window is 8-12 weeks, with many patients clearing the virus (negative HCV RNA) as early as eight weeks. Once the HCV RNA has been negative for greater than six months after treatment, a person is considered to have sustained viral response (SVR) and is essentially cured. 

 

Underwriting considerations and offers

Underwriters will consider multiple factors and test results when assessing the risk for an applicant with a history of HCV.

 

Aside from factors such as date and age of onset, symptoms, and prior treatments, they will also review serology, imaging (US/MRI/CT), biopsy results and scans. Today, there are more sophisticated blood tests (FibroSURE) and scans (FibroScan), which will measure liver damage (fibrosis and cirrhosis); these advances have significantly reduced the need for invasive, costly and riskier needle biopsies. 

 

Applicants who have successfully cleared the virus (sustained neg HCV RNA more than six months) with no liver damage may be approved at preferred rate classes! (Depending on the carrier)

 

Applicants unable to clear the virus are considered chronic hepatitis C applicants and will be rated and possibly declined, depending on the individual’s overall factors and test results. 

 

Reach Out

At Ash Brokerage, you have a dedicated staff of seasoned underwriters available to answer your questions regarding your clients with Hepatitis C. We’d welcome the opportunity to talk with you about your client’s specific needs. Also, be sure to check out our helpful questionnaire to use with your clients. 

 

Learn More

Ash Brokerage Hepatitis Questionnaire: http://go.ashbrokerage.com/WC2017-07-UW-Hepatitis_LP-Content.html?utm_source=blog&utm_medium=landing_page&utm_campaign=uw_questionnaire

 

1Centers for Disease Control and Prevention, “Know More Hepatitis”: https://www.cdc.gov/knowmorehepatitis/media/pdfs/factsheet-boomers.pdf 

2HCV Advocate, “HCSP Fact Sheet, Extrahepatic Manifestation of HCV” July 2015: http://hcvadvocate.org/hepatitis/factsheets_pdf/extrahepatic.pdf

3CDC, Viral Hepatitis, Hepatitis C: https://www.cdc.gov/hepatitis/hcv/index.htm

4Centers for Disease Control and Prevention, “Testing Recommendations for Hepatitis C Virus Infection”: https://www.cdc.gov/hepatitis/hcv/guidelinesc.htm

 

About the Author

For more than 35 years, Charlie Kuhn has taken a personal interest in every case. To her, it’s more than a file – it’s a person trying to protect the people they care about, or a business trying to protect its future and the future of their employees. Charlie can think of no better vocation than to help provide financial and emotional security for others. Through her personal commitment to continuous professional growth, Charlie is one test away from becoming an Associate of the Life Management Institute. She is already an Associate of Customer Service with LOMA, has passed all three of the Academy of Life Underwriting exams, and is certified in EKG interpretation.

 

Underwriting Hepatitis C Life Insurance

It’s Just Math: Tax Efficient Planning with Life Insurance


Protection

People in our industry like to make things complicated. But, what we do isn’t complicated. It’s mostly just math. Plain and simple. 

 

For our July webinar, I posed a simple question: 

 

Is there a better way to own a non-qualified investment?

 

The simple answer: Yes! In many cases, cash value life insurance is a more tax-efficient solution. If you missed the webinar, you can watch the replay to see the breakdown of the numbers. But, it was easy to see that tax treatment of cash value life insurance – thanks to IRC 7702 – makes it a more efficient savings tool than many non-qualified investments.

 

For our purposes, we used the S&P 500, but you can compare the efficiency of life insurance with ANY non-qualified instrument. With funds that have high turnover rates or high interest income, the comparison is even more compelling – cash value life insurance, when properly structured, is usually the more tax efficient savings tool. 

 

The proof is in the pudding. Still don’t believe me? Go ask your tax advisor. 

 

This is the reality for most of your high income clients who have maxed out their qualified investments. I’m not this insurance zealot that says everyone should own cash value life insurance. This savings strategy is for those with higher incomes who are looking to accumulate funds more tax efficiently. And, it’s efficient for your business, too – because your clients’ taxes will come out of your assets under management. 

 

Finally, wouldn’t you rather own an instrument that gives you something in return? Other instruments aren’t going to give you a death benefit – they’re going to give you a 1099. Think about that. 

 

You see, tax efficiency isn’t complicated. It’s just math. Want to know more? Watch the replay or reach out directly – I’d be happy talk about how we can help you tell this story with your clients. 

GO DEEPER: On-demand video

Hear the strategy. See the math. Watch and learn in just 30 minutes.

Tax-Efficient Planning for the Future

About the Author

Tim_Ash_atrium.jpg 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. 

Cash Value Life Insurance Webinars Tax Efficiency

How to Tell a Tax-Efficient Planning Story


Protection

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: 

 

  • My clients have been burned in the past …
  • It’s too expensive … 
  • It’s too complicated … 

 

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. 

GO DEEPER: On-demand video

Hear the strategy. See the math. Watch and learn in just 30 minutes.

Tax-Efficient Planning for the Future

 

About the Author

Tim_Ash_atrium.jpg 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. 

Financial Planning Tax Efficiency Cash Value Life Insurance