August 2021

Did you know that Non-Smoker rate classes are available on marijuana use?  In some cases, Best rates may be possible.

Take a look at these potential rate classes for recreational marijuana use:

• 1 time or less per month may qualify for Preferred Plus Non-Smoker
• 3 times or less per week may qualify for Preferred Non-Smoker
• Up to 4-6 times per week AND no more than 1 time per day may qualify for Standard Non-Smoker

Medicinal marijuana use is underwritten differently than recreational use.  Rate classes for medicinal marijuana are based on the underlying condition being treated.  Some carriers may require a valid prescription for eligibility, particularly in cases involving daily use.

Contact the RAM GROUP for best possible outcomes on marijuana use.

Do your clients have “idle money” you don’t know about?

Perhaps they have some emergency funds sitting in savings, money market or a CD, and it’s just not working as hard for your clients as it could.

Do your clients have money that could be better used to help them plan ahead for the risk of a future extended health care need?

Consider reallocating a portion of these assets into a linked benefit solution.

Here are some potential benefits.  If your clients:

• Change their mind.  With the Return of Premium Provision, clients can get at least their initial premium back.
• Do not use the LTCi benefits.  Beneficiaries get a tax free death benefit.
• Like the idea of instant leverage.  Instantly provide your clients approximately 2x their initial premium for a death benefit, and depending on the product, nearly 2x to 6x their initial premium in covered long-term care benefits (amounts will vary due to age and gender).
• Need LTCi.  The benefits are tax free.
• Want a tax break.  Covered LTCi benefits and life insurance death benefits are income tax free.

A linked benefit solution is a win-win proposition.  Let’s get your clients’ money working harder.  Contact your RAM GROUP LTCi Specialist for more information.

Many argue that the best Super Bowl halftime show took place in Jacksonville, FL, some years ago.  In a forum known for mediocre performances that fail to meet the hype and fulfill the expectations, the lights and fireworks opened on a band named Wings, led by one of the last vestiges of an earlier rock group whose work and music had taken a place as the centerpiece in the canon of popular music in the English-speaking world.  Paul McCartney chose to lead off with one of his creations from the Beatles’ music catalogue.  He and 80,000 spectators sang the song Baby You Can Drive My Car with its tale of a taken young man lured into a position as chauffeur for his rising-star love-interest only to have her confess at song’s end, “I got no car/ and it’s breakin’ my heart,/ but I’ve got a driver/ and that’s a start!”

And so it often is with insurance sales to be funded with a proposed insured’s unneeded RMDs coming out of their qualified plans.  It makes sense.  Use the money you must take, but don’t need, and leverage an eventual death benefit to heirs with insurance coverage.  But if you and this concept are driving a successful sale then make sure you have an insurance company that wants to be a “car-rier”.

The pill in the jam is financial justification.  The insured is 70-1/2 and, seldom, has any earned income.  Consequently, coverage can’t be justified for income replacement purposes.  And more often than not the proposed insured doesn’t have federal or state death tax concerns.

In these situations it is important to know the carriers who are sympathetic to and will underwrite reasonable amounts of coverage if other facts about the case are in order.

Consider This:

First, what percentage of the insured’s annual income is being used for premiums?  The acceptable amount could be larger in cases where it is adequately demonstrated that living expenses will be met with what remains.

Second, the amount of death benefit will usually be limited by a formula that ties the face amount to certain financial criteria.  A common example would be:  Permissible coverage = 50% of the net worth attributable to investment assets + FMV of residence – coverage in force.

Because insurance is often purchased in situations where no death tax is anticipated, clients overlook the advantages of purchasing the policy in a trust.  A living trust will keep the proceeds away from the exposure and expense of the probate court while allowing for their distribution according to a testamentary pattern not practical through a simple beneficiary designation.  An irrevocable trust will protect the proceeds from creditors as well.

Fifty-one years ago last April the Beatles had the top five single recordings on Billboard’s Hot 100 Chart.  No group or singer has every come close to such domination.  Billboard Magazine reported that during the first four months of 1964 the Fab Four accounted for 60% of all single records sold in the United States.

For more information contact us today.

Original Author: Tom Virkler, 8-24-2021

The recent market volatility has prompted many advisors to look for Life Insurance solutions that can help clients achieve their goals while minimizing the impact of market fluctuations.

A product that has gained substantial traction is the Indexed Universal Life policy, a Fixed Life product that can offer clients the potential for growth and protection from market loss.

Product Benefits

Flexible death benefit guarantees.  Clients have access to a 20-year base policy death benefit guarantee (reduced for issue ages 65 and above) plus the optional Extended Death Benefit Guarantee rider.

Helps clients with a product that offers cash accumulation potential and minimizes the impact of market loss.  This product features cap rates as high as 12% and floor to allow advisors to give clients more stable returns over time.  The cap rate allows clients to maximize the interest credits they receive during up markets, while the floor rate protects them from loss during times of market decline.

Average of three market indexes.  Indexed UL uses an annual interest crediting strategy that employs monthly averaging to help protect the interest credited during periods of market volatility.  This strategy uses a blended average of market indexes (S&P 500®, the NASDAQ-100®, and the Dow Jones Industrial Average SM) and weighs them so that clients always benefit more from the better performing indexes.  It’s important to note that Indexed Universal Life policies are not stock market investments and do not directly participate in any stock or equity investments.

Some IUL carriers feature a 140% current participation rate which means that clients could potentially be credited interest at 140% of the actual index return, subject to the cap rate.

Additional Features

Competitive underwriting.  Underwriting options include simplified issue and guaranteed issue for corporate-owned and corporate-sponsored arrangements.

Access to an indemnity style Long-Term Care rider.  Advisors can help clients maintain control of their money and their independence by adding a LTC rider onto the policy for an additional cost.  The LTC rider may be known by different names in different states may not be available in every state and has an additional charge associated with it.

Target clients

Indexed UL may be a good fit for clients who are:

• Seeking Life Insurance that offers guarantees and the potential for growth
• Looking for more stable accumulation potential during volatile markets
• In need of flexible death benefit options
• Interested in planning for possible LTC expenses
• 35 to 55 years of age

If you have questions about this product or case design, please contact your RAM GROUP Life Sales Representative today.

One of our A+ rated carriers has underwriting crediting program that will benefit more of your clients.

Here’s an example:

• Seeking UL coverage
• 31-year-old male, non-tobacco
• History of bicuspid aortic valve with a valve replacement 12 years ago
• Favorable cholesterol 139, HDL ratio 4.0
• Favorable height/weight 6’6” 222 lbs. (BMI 25.7)
• Favorable blood pressure 117/70

Initial assessment is Table D, but with the application of this crediting program, a more favorable underwriting decision is possible.
Underwriting outcome; Table B!

Our team is here to help with all your impaired risk cases.  Please contact us today for more information about this carrier and how we can help boost your sales.

* While this is a great real life example please remember crediting programs factor into the equation the good health habits and features of a client but sometimes are not enough to overcome the debits so every individual case is unique and the results will vary.

There is a growing movement among health care providers that underscores something we in the Long-Term Care industry have known for years: helping chronically ill people receive the care they need while remaining in their homes is not only what people prefer, but can also be more cost effective than facility care.

Compassionate Care

According to an article in The Atlantic magazine, home based care is gaining traction as “a more humane, effective, and affordable health care system” than traditional nursing home care.

We understand that your clients want to maintain their independence.  They want the freedom to make decisions about how and where they receive care.

While health and long-term care insurance differ in services that they provide, we believe that home care benefits are very important.

Today’s LTCi policies contain many benefits that will help your clients remain at home: access to a care coordinator, respite care to give volunteer caregivers a break, homemaker services, caregiver training, as well as extra funds to help pay for home modifications, medical alert systems or durable medical equipment.

These built in benefits are a compelling reason to purchase an LTCi policy, especially for high net worth clients, as they provide added peace of mind for family members.

Start focusing on the benefits instead of the premiums – call your RAM GROUP LTC Sales Rep today for further discussion.

As the 2021-2022 football season is ready to start at full throttle, now is the perfect time to share a case study for an NFL running back our network of offices worked on.

In this case, the NFL Running Back being drafted in the second round of the NFL draft and completing three successful seasons, the player was approaching free agency and his biggest paycheck to date.  To protect himself and his future income, he needed an insurance policy in place before he hit the field in the fall.

Assessment

Due to the physical nature of the sport, it was made apparent that if the player suffered an injury or illness resulting in a permanent total disability before he signed a new contract, his future income would be lost.  The first policy placed covered $5 million in benefit, but his recent stellar performance moved the advisor on the case to request an increase in disability benefit at the time of renewal.

Solution

Our network’s Disability Income Support Team worked with the player’s Agent and Insurance Advisor to develop a $10 million permanent total disability policy, which would soften the blow in the event the player became permanently totally disabled before his next big contract was signed.

Result

This tax-free benefit gave the player peace of mind – if he suffered a serious injury or illness while playing football, his future contract and lifestyle would be protected.

The premium for this case was roughly $90,000 plus taxes and fees.

Even though NFL super-stars need specialized coverage due to the nature of their sport, it’s important to remember that high-earning individuals have a gap in disability income protection as well.

Contact your RAM GROUP DI Sales & Marketing Specialist for more information on unique DI solutions.

Are you talking to your clients about Business Insurance?  If not, you may feel that it would take years to become an expert.

We can help you provide free business evaluation services to your clients today!

We will help to address your business clients’ six core needs:

• Retirement Income
• Exit Planning
• Income Protection
• Business Protection
• Wealth Transfer
• Survivor Income

A sales associate will work with you to provide business case expertise and top-notch service before, during and after the sale!  We will help you navigate through the planning process.

The process includes, but is not limited to:

• Learn the Business Planning Services approach
• Learn whom to approach
• Learn to build marketing campaigns
• Help clients find the value of their business
• Help clients review their buy-sell agreements
• Help clients understand the reports
• Help clients create an action plan

Working the process thoroughly will help your clients gain perspective on the value of their business, and identify any planning opportunities in their current buy-sell arrangements.  Contact us today to learn more about this comprehensive service.

Back in the days before the development of things like the NiMH or lithium-ion battery, stand-up comedian Don Adams (who later became Maxwell, the original Get Smart secret agent) used to joke that electric cars were unpopular because of the high cost of the extension cord.

Many insurance advisors face a similar hurdle when advising clients to properly set up a buy-sell arrangement using term insurance to fund the plan.

The cost of getting with the attorney to draft and implement a written agreement, to say nothing of the time and effort required, is discouragingly disproportionate to the amount of premiums for the coverage.

Consequently, just to get things done the policies are often jointly-owned as a “no-fuss” method of assuring that proceeds will get to the surviving owners to buy out a deceased owner’s estate, without a formal agreement.

It works like this:

Joint owners and beneficiaries (some states add “with right of survivorship”) share equally in the possession of the policy and the right to proceeds, so long as they survive the insured.  If not, only the survivors share equally. So if equal business owners A, B, and C agree to fund a buy-sell then, e.g., A and B jointly own the policy on C.  When C dies A and B have funds to buy C’s business interest.  But more important, C’s joint interest in the policies on A and B ends.  A and B are now the sole owner and beneficiary of the policy on each other for use at the second death.

Something is said to be “jury-rigged” when it is simply constructed with the materials at hand.  That same thing is “jerry-built” when it is done in a shoddy or inferior fashion.  Buy-sell plans built solely on joint policy ownership are both.  The only thing assured is that the money gets to the prospective buyers.  After that it’s all up for grabs.

Consider:

• The surviving owners are under no legal obligation to buy, leaving the estate of the deceased (probably the surviving spouse) in a lurch.
• The deceased’s estate is under no obligation to sell, leaving the deceased’s heirs as a new owner in the business.
• There is no fixed price for the business for estate or for income tax purposes should the IRS get involved.
• Re-arrangement of interests in the remaining policies could constitute a transfer-for-value.

Of course the worst that could happen is for someone to die with no coverage in force.  So if clients are resolute in their refusal to take proper steps to implement a written plan, the advisor should at least get coverage issued with the most advisable ownership arrangement.  But in addition the file should contain a cover-your-backside letter from the advisor to the clients spelling out the need to discuss the possible problems with their tax and legal advisor.

Join, jury, jerry – there are a lot of J’s flying around this article. And it just so happens that James and John are the first and second most common male names in the United States.  And sure enough there have been six presidents named James and five named John.

Original Author: Tom Virkler, 8-10-2021

The “younger” segment of the LTC Insurance market (people age 45-55) represents a great opportunity to expand your business.

But to be successful, it’s critical to understand their unique needs and concerns around buying coverage.

Doing so can help you to anticipate and overcome objections, present solutions more effectively, and ultimately, create more positive outcomes.  Here’s a helpful strategy to follow:

Know Your Audience

Individuals in the 45-55 age bracket often understand the need for LTC planning, but have not purchased a policy because of perceived affordability issues and/or competing priorities such as future college expenses, retirement planning, or caring for aging parents.

The majority of LTCi sales are to people under 55.  Your biggest challenge is creating the sense of urgency for them to take action sooner rather than later.

Anticipate Objections

When discussing LTC planning with younger prospects, you may hear:

• “I’m too young to deal with this right now.”
• “Currently, I’ve got other priorities to deal with.”
• “I can’t afford to add another bill to my monthly expenses.”

Respond Effectively:  Before you can overcome an objection,it’s important to acknowledge a client’s concern and show empathy.  This demonstrates that you are actively listening to their needs and concerns, which will help to build trust, and ultimately, enable the client to feel comfortable about moving forward.

Move Toward A Decision

Buying LTC Insurance is not an all-or-nothing proposition.  You can take advantage of the flexibility you have to adjust the policy design. Show plan options with a premium that fits their budget.  Here are two sample responses that address common objections:

Why Now Versus Later:  “I hear what you are saying about your competing financial obligations and priorities.  Since coverage is often much more affordable when you are relatively young and healthy, delaying this decision can make buying coverage even more challenging later.  Let’s explore a few alternatives that might help us take advantage of your current age and health.”

Too Expensive:  “I hear what you are saying about the monthly premium and your current budget.  The most important thing is to have some level of coverage, so that you don’t ignore the risk altogether.  Let’s look at some plan designs that still provide a strong level of protection, but better fit your current budget.”

Did You Know?

The average length of an LTC Insurance claim is 2.85 years.  So when the premium cost is the biggest concern, look at different policy designs with a 3-year Benefit Period, which can provide ample and very affordable coverage for the majority of clients.

Contact your RAM GROUP LTCi Associate for more resources and materials to help expand your LTCi business.