We tend to think that a prospect that has a large amount of cash in the bank is automatically an Annuity prospect for part of that money.  And, that is a real possibility.  But, first we need to ask them some questions, such as:

"Is any of that money earmarked for a specific purpose, such as to leave a legacy to a child or a grandchild, or maybe for possible long term care needs?"

If the answer to that question is yes, then perhaps an Annuity is not the best product for their needs.  For example, if they have $50,000 in a CD that is earmarked to leave to the grandkids someday, why not show them a way to make that $100,000?  A $50,000 deposit into a Single Premium Life policy could easily change that $50,000 legacy into a $100,000 legacy overnight?  And, if they happen to also be interested in their long term care needs, a single premium life policy that has an LTC rider benefit could offer them "double duty dollars".

Give us a call and let's talk about it.  Click HERE to get a questionnaire that may help you determine if a client is a prospect for Single Premium Life.

Long Term Care Insurance... is it needed?

Well, if you had a 40% to 50% risk of something happening, would you insure it?

Most of us would, and that is the approximate risk that we all face of needing nursing home care during our lifetimes. Almost all of us will need some type of care eventually, including care at home, and modern LTC policies provide benefits to cover all contingencies.  We can offer you great LTC insurance products from companies like:

For more information on LTC, click on our link titled "Long Term Care info" on the left side tool bar. Your clients are going to buy it from somebody, why not you?

• Buy sell agreement
• Key employee coverage
• Business life insurance
• Group medical & other benefits
• Retirement plan

"Secondary Market" for Inforce Life Insurance policies that are no longer needed

There may be a market for Life Insurance policies that your clients no longer need, or want. In recent years, "Life Settlement companies" have been created that are interested in buying the ownership and beneficiary rights to inforce policies. In some situations where your client has a policy that they can no longer afford, no longer has a desire to keep, or perhaps a UL plan that has a depleting cash value, there may be options for them that would be better than simply lapsing or cash surrendering that policy.

In a Life Settlement transaction, your client will always get more than the cash surrender value for their policy. This secondary market opens up a whole new perspective on disposing of unwanted or unaffordable life insurance policies. Now, when advising your clients to dispose of their Life Insurance policies, the opportunity exists to produce substantially more cash than cash surrender value. Even Term Insurance policies can sometimes qualify for a Life Settlement.

Take this situation: Male age 75, terminal cancer, has a $400,000 UL policy with a cash value of $1,000 and steady declining�½ obviously in jeopardy of lapsing in a short time.

Premium to keep it inforce will soon need to be increased drastically just to keep inforce for a little while, and client does not have the money to pay more.

Here is an option: the Life Settlement firm offers him a $100,000 in cash for his policy, which they then own, pay premiums, and are beneficiary of. Agent is paid a $3,000 fee, client has a lot more in his pocket than the cash surrender value and no longer has to pay premiums. Client dies a year later, and the death benefit is paid to the Life Settlement firm.

So, there may no longer be a need to cash in a life insurance policy for cash surrender value or let a term policy lapse. Now your clients can sell their policies to a third party (not the insurance company) for cash, and you could receive compensation for your assistance.

Who is a Prospect for a Life Settlement?

If you have a client who:

• is at least 65 years old,
• has a life insurance policy (all types, including term) of $250,000 or more,
• and has had a change in health since the policy was issued, your client might qualify for a Life Settlement.
• a Life Settlement can produce substantial cash from a life insurance policy that is no longer needed or wanted.

Call us today for more information!*

* Never advise a client to cancel or surrender an inforce policy until a review of their needs has been done, and all options are discussed with that client. Agents must comply with all related law and regulation pertaining to these transactions. Some states now require special licensing to sell life settlements.

How much money needs to be invested at various interest rates to generate a monthly income of appx. $1,000?

The chart below may help you determine that, and it can be useful in life insurance and retirement income situations.

For example, in a life insurance situation:

• a client dies with a $100,000 life insurance policy in force,
• and the spouse puts the death benefit in a CD type investment at 4%,
• and draws out $1,000 a month (principal and interest),
• the money will last about 10 years
• to get $1,000 income for 20 years, $166,000 would be needed, etc.

Or, in a retirement income estimate calculation:

• client wants $1,000 a month income for 20 years at retirement,
• he estimates that he can get 7% on the money each year,
• so, he would need about $130,000 invested to produce that.

* "Forever" income assumes money is invested at given rate, and only the interest is used to provide the income desired, thereby preserving principal and generating interest income "forever".

** Numbers are approximate and rounded. This is just an example of how to get clients thinking about replacing lost income at death instead of leaving a lump sum with no direction on what to do with it. In this example, it would still be up to the beneficiary to find an appropriate vehicle for the proceeds to get the desired result. Obviously, you can be of great assistance in that regard.

Formerly known as 412(i) Plans - Most advisors have not even heard of this type of defined benefit retirement plan, but it can produce huge benefits for your clients, as well as for you. First, let's look at who would benefit from a 412(e) plan.

The best prospect for this plan would:

• make a very large, stable income each year
• be a small business owner with few, if any, employees
• be interested in a very large tax deduction
• be willing to invest in guaranteed, fixed products.

To qualify as a 412(e), the plan:

• must be funded with guaranteed insurance company contracts*
• must have level annual premiums
• must have benefits that equal the product guarantees
• must not allow assignment or policy loans

* fixed annuites or combination of annuity/whole life insurance ONLY!

Assuming sufficient income each year, following is an illustration of possible deductible contributions*:

* these are estimates only, and actual values will depend on company factors.

As you can see, compared to most pension plan designs, a much larger deposit and deduction can be obtained with a 412(e) plan. So, if you have a prospect who wants:

• guaranteed retirement benefits
• a very large tax deduction
• contribution stability
• investment safety
• simplicity in design
• and, who meets the prospect criteria mentioned previously,

... you could have an excellent prospect for a 412(e) plan!

To find out more, call us today!

To view a 412 (e) brochure from American National,

click on the following link: www.imo.anicoweb.com/cs/groups/public/@anpub/@img/@content/documents/webcontent/im_4702.pdf

Note: Not every company will offer products that fit the above requirements, or have the design, administration, and support facilities needed for such plans. We have several companies that are in this business, and will be able to meet your client's expectations, as well as yours. Over time, the allowable deductions generally increase with indexing.

Well, if you had a 40% risk of something happening, would you insure it?

Most of us would, and that is the approximate risk that we all face of needing nursing home care during our lifetimes. We can offer you great LTC insurance products from companies like:

• John Hancock,
• Mutual of Omaha,
• Genworth, and
• State Life.

For more information on LTC, click here.

An older customer wants to help their adult child buy life insurance to protect the customer's grandchildren. Here is a way they can get the life insurance, and get their money back if it is not needed! Here is an example using the following assumptions:

• adult child is male age 30, preferred non-tobacco
• $250,000 coverage is needed for 20 years, premium about $785 year
• payment options: 1) grandparent pays annual premium of about $785 for 20 years, gets all money back if adult child lives 20 years (about $15,700), or 2) pays $13,340 up front, which pays first year life premium, and balance goes into a19 year immediate annuity which pays the annual premium for the remaining 19 years of the term policy, and still gets $15,700 refund after that time even though they only put in about $13,340 up front!
• you can also cover the spouse for about twice the premium, and they would get about twice the refund, etc.
• it's a WIN-WIN situation!
• call for more details!

* values are approximate, and change with interest rate environments and life rates, so call for more info.

Tax-Free withdrawals from Non-qualified Annuities?

If you are an owner or a producer of an agency today, you may have lots of customers, but you may not have the "penetration" of additional lines of insurance that you would like to have. In other words, you may only have 1 or 2 different coverages in a household or business.

Many studies have shown that the more lines of business that you have with a particular client, the more likely that you will retain that customer in the future. One line of business that has been shown to increase customer satisfaction with an agency is Life Insurance.

One problem for multiline agents is to define "how" best to market Life to a large number of customers. Well, here is a way that may help, and it provides:

* a systematic way of going through your entire book of customers
* a reason to make contact with them
* a "sense of urgency", so the clients will make a decision soon
* a "money saving" approach for the customer
* a SIMPLE marketing tool for you, and
* a chance to solidify your relationship with the customer.

It`s called the Age Change Marketing System (ACMS). Life Insurance rates are based to a great degree on age. So, if you have the ability to run a computer report of clients by their dates of birth, or if you simply start an index card system (like x-dating with DOBs), then you can have all of the above advantages.

(Click link below to see a Power Point presentation of the ACS)

Age Change Marketing System

• some customers will actually call for a life quote (proactive marketing)
• customers will see your agency as a true "full service" agency (and not call the "other agent" in town who sells life insurance)
• it gives you a "systematic" way to go through your whole book (ex. - if you have 3,000 customers, you have approximately 250 having a birthday each month, and another 250 who will have a birthday in 6 months, 500 potential prospects, plus family members.)
• contacting them before these "age change events" means that they can save 5%, 10%, or more on new life insurance purchases
• they have to make a decision within 30 days or so, or LOSE this potential "discount" forever (sense of urgency)

  NOTE: If your agency has business reply cards or postage paid envelopes made up, you could insert one in your letter along with a request for client information on DOB, smoker status, how much coverage desired, etc. That will increase the cost of the program somewhat, but you may have more people request quotes, too. The best results come from making a followup phone call to as many letter recipients as possible.
  
  Here is a sample letter than can be typed on your letterhead and sent:

  "Dear customer,

  We appreciate your business, and thank you for allowing us to service your insurance needs!

  With that in mind, we wanted to make you aware of an important date coming up. As you may know, our agency offers a full range of insurance products, including Life Insurance. As you may also know, Life Insurance rates are based on your age, to a great degree.

  We notice from our records that you, or someone in your family, is (having a birthday soon) (having a birthday in about 6 months). Some insurance companies base their rates on "actual age", and others on your "closest age". So, in order to get the lowest possible rate, you may want to consider an update of your current coverage. You could save 5%, 10%, or more on any new coverage, but you must ACT SOON!

  If interested in getting more information, please give our agency a call today. And, as always, thanks for your business!

  Sincerely,

  (agent)"

  (If you are sending a letter to people with birthdays soon, throw in a "happy birthday" message, too, like, ".. and best wishes for your upcoming birthday!". That helps solidify your existing business with them. Better yet, send birthday cards!)
  

This approach takes less than 1 minute, and can generate hundreds or thousands of dollars in extra commissions for your agency.

P.S. - This idea also works for "life only" producers who want a systematic way to contact clients and prospects. I do it myself, every month, and it produces extra sales every year.

(To print this sales idea for future use, just place your cursor at the beginning, hold down your left mouse button, and drag it down to here. That will highlight all the verbiage, and you can hit your "print" button to get a copy.)

One of the reasons that we tend not to sell enough life insurance is that we may not be confident in our answers to tough objections. This section will seek to give you dozens of common sense responses to use in those situations. These ideas have been "borrowed" from hundreds of sales professionals over the years, and our thanks goes to all who have contributed.

All objections will fall into one of the following categories:

"I can't afford it (no money)."

"I am not interested (no need)."

"I will think it over (no hurry)."

No money - A true life insurance prospect is one that does have the money to pay for the coverage, and it is always best to know something about their financial situation before talking to them. But, sometimes what they really mean is "I don't know where I would come up with the money for premiums.", or "I have money, but I don't want to tell you about it until you convince me I need something." It is always beneficial to complete some type of written "fact finder questionnaire" on each client. This would include gathering information on their monthly income, expenses, current assets and liabilities, and current insurance coverages. This will be invaluable in seeing what their budget looks like, and will help you find money to pay for needed insurance. In many cases, even if you don't sell life insurance to them, the "fact finder" will uncover needs other than life insurance,such as Disability Income, Long Term Care, and IRA/401k rollovers (show clients how you can improve their situation without it costing any "new" money out of pocket). If you would like a sample "fact finder" form that can be useful, just let us know.

No need - Again, a "fact finder" questionnaire of some sort should be used in every first interview with a prospect to see what types of needs they may have. If your review questions include, " what type of income would you want your family and/or business to have if something happened to you", it will be really hard for anyone who cares about that family or business to say they "don't need it". Ask them what results " they want", not what you want. Most people are simply "scared of buying something they know very little about", so they need help in reviewing their situation. Occasionally, you will find someone who already has sufficient life insurance, but because of your doing a complete questionnaire, other needs will be uncovered. Either way, you are building a trusting relationship with a client by looking after those needs. A good response to the "no need" objection is, " That's very possible, you may have no need for additional coverage at all. In fact, only about half of the people that I talk to will have such a need, and the money to pay for it. I have no idea which half you will be in, but the only way for me to find out is by asking you some questions, and there is no cost for this review..."     (go to fact finder)

No hurry - This is perhaps the most common objection, the one people really mean when they are saying they have "no money, or no need". They just don't want to think about it right this minute. Procrastination is a weakness for many folks, especially when health is good and things seem to be going well. Our job, as professional advisors, is to do our best to get them to act on matters of importance. One thing you might try is, " how would you sleep at night if you did not have FIRE INSURANCE on your home? Probably not very well, but the actual chance of fire destroying your home is relatively small. Did you know that over 50% of mortgage foreclosures were the result of either death or disability of a homeowner? Your homeowner's policy does not cover either of those perils, but we offer that coverage as an option...". ( Important: be sure that you get the date of birth of the prospect and his/her family. Life insurance rates are based, to a great degree, on age. So, if you happen to be talking to them when they are nearing an "age change", you can perhaps use that leverage to help them make a decision now, before the rates go up. If they are not interested now, having their date of birth will give you a reason to call back in the future regarding saving money before an age change. People are more likely to buy something when they think they are about to lose a lower price, as when their "age changes" for rating purposes.)

The "no hurry / not interested" objection is probably the favorite of the younger prospects, who feel that they have plenty of time to make plans for the future. For them, you might want to acquaint yourself with the "Libery Bowl Close", outlined below in the Power Phrases and Motivational Story section below.

The key to selling life insurance isactually caring about your client's needs. As one famous life agent once said, " you have to talk about life before you talk about life insurance". Ask about their goals and dreams for their families, and you will be surprised by what they tell you. A good fact finder questionnaire will help you gather the information you need to make a good recommendation, so get into the habit of using one with each prospect (we can help you with that, just call).

Below you will find some common sense phrases and stories that can help make the point about the importance of life insurance and sound financial planning:

" Life insurance is not for the people who die, it's for the people who live."

" What is your most important financial asset?.... home, business, pension plan, stock portfolio? If all those things were lost tomorrow, couldn't you eventually replace them all if you had just one thing... your ability to earn a living? But, what if you lost that ability because of an accident, illness, or death? Which would be more financially devastating? Now, what would you say is your most important financial asset?"

"Ever hear the children's story about the goose that laid golden eggs? In your opinion, which would be more valuable, the goose or the eggs? Most of us tend to have all of our eggs (home, car, valuables) insured for "replacement value", because their loss could hurt us tremendously. Do you have "replacement value" coverage on your ability to earn a living?"

The Money Machine - "Mr. Prospect, if you had a machine that cranked out $1,000 every week, and each Friday you went to that machine to pick up your money to pay your bills and provide food and shelter for your family, would you buy insurance on that machine? Well, you are a money machine to your family. If something happened to you, your family would be emotionally devastated, but they don't have to be financially devastated. We can insure that money machine for you."

" There are 2 ways to create income - People at work, and Money at work. If something happens to you, we can help create the money needed to replace the lostincome."

"If your employer offered a plan at work that would guarantee your family 50% to 100% of your salary if you died tonight, would you consider it? Your employer is not likely to do that, but that's what I do for a living."

" How many years of your salary would your family need if you died tonight?"

" You know, it takes about $167,000, invested conservatively, to generate a $1,000 a month income to your family for 20 years. How much will your family need each month? (assumes 4% per year return, using principal and interest... at 2%, it would take about $199,000 invested)

" Your spouse works and provides income to the family, is her/his life insurance sufficient for you and your family?"

"If you are looking for someone to advise you on insurance matters, I would like to apply for the job."

" Cork Close" - "Mr. Prospect, if I were to knock on your door today, and tell you that I have for sale the most wonderful Brazilian cork, in any size you wish, for only a penny a pound, you would probably throw me right out the door. After all, who needs cork today, at any price? But, if you were in the middle of the ocean, treading water after your cruise ship had gone down, and I offered my cork to you, you would probably pay any price, right? Well, that is the story of life insurance... no one wants it until it is needed. And, by then, it is too late."

" The 3 Arabian Horsemen" (Similar to the Cork Close above) - "Many centuries ago, 3 Arabian horsemen were crossing the desert, and stopped at an oasis to drink. As they did, a voice came from the heavens, "fill your pockets with pebbles, and tomorrow you will be both happy and sad." They did as they were told, and the next morning they awoke to find that the pebbles had turned intodiamonds, emeralds, and other precious gems. And, they WERE both happy and sad... happy that they had picked up some of the pebbles, and sad that they had not gotten more. This is the story of life insurance... some day, those of us who own life insurance will be both happy and sad... happy that we bought SOME life insurance, and sad that we didn't buy more."

" Choice of Jobs" close - "If you had moved to a newtown, and were offered 2 jobs, #1 pays $37,000 a year with no benefits, and #2 pays $36,000 a year but guaranteed your family $20,000 a year for 10 years at your death, or you $100,000 in cash at age 65 to supplement your retirement, which job would you take?" ($1,000 a year premium into a good permanent policy could provide those similar benefits, depending on age)

" What type of life insurance is best, you ask? Tell me when you are going to die, or at least how long you plan on keeping the coverage, and I will tell you which plan will be best for you." (this helps people to realize that they probably need some permanent life, as well as term, as does the one below)

"You say that you have heard that Term Life is always cheaper. Well, that could be true, IF you only plan on keeping it a short time, or IF you die early. Would you agree that many people are going to live into their 80's and beyond? Do you think that you would like to have some life insurance at that time, should you live that long? If so, Term Life won't work. Let's look at what Term insurance will cost at age 85." (Run an illustration showing guaranteed premiums to age 85. Your prospect will be astounded. Most people will need some Permanent type of coverage, in addition toTerm.)

" 10 Day Free Look" Close (good response to "I want to think it over.") "I understand that you might want to think over this decision to buy additional life insurance. Would 3 or 4 weeks be long enough? Why don't we do this, get a short physical at our expense, let the insurance company be looking over your medical history while you are deciding for sure what to do. Make a deposit of one month's premium with the application. That way, by the time you have decided,a policy could be ready to go into force immediately. Otherwise, you could go several weeks with no coverage. If you do decide NOT to take the policy, you will have 10 days after your policy is delivered to send it back for a full refund. You can't lose, but your family could win."

The " Liberty Bowl Close" - This is a close (answer to objection / ask to buy) that can help with those prospects who seem to have no "sense of urgency" (no hurry). For example, young, healthy prospects who will probably do something eventually, but you can't seem to get them to act. Let's assume the prospect is a male age 30, although it can be "tweeked" for any age. Perhaps this will give him a better perspective:

" Pennies from Heaven" - Ask your clients / prospects who are grandparents if they are proud of their grandkids, and then prepare for a lengthy discussion! Then, ask them if they givepresents to the kids each year (of course they do!). Then say, "What if I could show you a way to send apresent to them every year for the rest of their lives, even after you are gone?" This is a simple sale of life insurance on the grandparent's life, usually a small face amount of $10,000 or so, but it could be any size. You write the insurance with special beneficiary instructions that state something like: "Interest only, to be shared equally among the following children/grandchildren or survivor(s)". Most companies have an "interest only" beneficiary option, and it usually guarantees that around 3% minimum interest will be paid each year. On a $10,000 policy, for example, that would generate at least $300 a year in interest FOREVER! If they have 3 grandkids, that would be $100 to each of them, EVERY year, forever! And guess what, if you set it up that way, the income will also continue for generations to follow! Can you imagine getting a check each year from a loved one who has passed on. Ask proud grandparents if they would like to setup a "pennies from heaven" plan. The fall is an especially good time to talk about this idea, because you can mention a "special Christmas gift" for the grandkids...

" Legacy to your favorite church or charity" - Most of us give money each year to a church and/or favorite charities. One way that you can perhaps have a much larger financial impact on these causes is to purchase a life insurance policy, and make the organization the owner and beneficiary of it. If done correctly, the premiums you pay could be tax-deductible contributions to the organization, and the future death benefit would also be tax-free to the entity (ask your tax advisor). This helps to create a future legacy that will really be appreciated. If the tax deduction is not important to you, just make them the beneficiary and not the owner of the policy. That way, should situations change, you could always change the beneficiary, and any cash values would be available to you personally rather than the entity. (we don't give tax or legal advice, so be sure to check with a tax advisor on ideas above)

Click on the links below to open/view/print PDF ideas related to business insurance applications.

Personal Market Concepts (view or print as you wish)