Agent Term Store
Our new process is as easy as ever. Get your term quotes from a broad array of top, competitive term carriers and submit a “Simple App” for your client. No more applications to complete! We will contact your client to complete the full application and schedule their exam. And, we’ll keep you updated throughout the entire process.
Our Drop Ticket allows you to submit your permanent life insurance applications on a short form for all your clients who are applying for permanent insurance.
We offer full support for a variety of Sales Concepts including Policy Review, Maximization Strategies, Life Insurance as an Accumulation Vehicle, Estate Tax Planning and more.
Policy Review Program
Our Policy Review process is the easiest one available for both you and your clients. We’ll help you generate new sales! Our program reviews your client’s life insurance at no cost or obligation. And it’s a WIN/WIN end result for YOU! With the hundreds of cases we have reviewed, over 50% of them resulted in a recommendation that improved the client’s life insurance portfolio.
The Team at RMIN makes my life easy! They have always been responsive and detail oriented to my requests. I can’t think of an organization that does what they do better!Mitch MichenerOne stop HELP – best back office around!Tom Stich
Rocky Mountain Insurance Network is a network of caring professionals that has enhanced my ability to do what I do. Their team works well and promptly getting me the quotes I need, following up on the details, notifying me of any issues with my business, and getting business issued and paid quickly. They are also on top of the changes in the market-place and provide me with sales ideas and product uses on a regular basis. I am very glad to have met this team and have enjoyed working with them for over 20 years.
I’ve been happily working with Rocky Mountain Insurance Network for a handful of years now. Being able to plug into their professional experience in the insurance world has been invaluable for me to be able to focus more of my time and attention on my clients’ needs, further skill development in the investment world and proactive marketing efforts for my company. Every person I’ve had the pleasure of working with at RMIN has been friendly and helpful. Most importantly, my clients have been very happy with the insurance solutions we are able to bring to them. Thanks RMIN!!
Indexed Universal Life Insurance (IUL) policies were first introduced by the Transamerica Life Insurance Company in 1997 and now account for over 20% of all policies purchased in the United States. IUL’s are some of the most flexible and advanced life insurance policies you can offer to your clients and over the past 20 plus years they have evolved into an incredible equity opportunity for investment and estate planning. A comprehensive understanding of IUL’s is now an essential aspect of any agent’s practice as they allow a client the security of a death benefit while also providing a secure and lucrative investment vehicle for their retirement. What may be most surprising, however, is the fact that as an investment vehicle, an IUL can perform as well as 401k’s, IRA’s, and other tax deferred retirement plans while still delivering substantial death benefits.
IUL Rundown: Why the Index.
Given the complexity of an IUL policy, let’s take a moment to broad-stroke what IUL actually is and what it does for the policyholder. The key component resides in the ‘I’ or indexed aspect of the policy. At its root, an IUL is a permanent life insurance policy that pays a tax-free, lump sum to the policy holder’s beneficiaries upon their death. What makes an IUL special, however, is that the cash paid into the policy can be tied to an index (such as the Nasdaq 100, S&P 500 and others) and the gains from that index will, in turn, generate gains in the cash amount. While it is not directly tied to the index in the sense that cash put into an IUL is not played in the markets, but rather it’s value is increased based on the percentage of the index on the upswing.
Unlike a 401k, the gains realized over time in the savings account portion of an IUL are not taxed and there is no limit to the amount a policyholder can contribute to their account. This makes an IUL an ideal place to let money grow and best of all, even though it is mirroring an index, there is no risk of losing the capital gained in the event of a market drop.
No Gain, No Pain.
One of the most tantalizing aspects of an IUL policy is that if the index it is mirroring realizes no gains or suffers losses, the cash value will not decrease. There is a 0% floor built into an IUL that simply means that if the index falters, no interest on the investment will be paid during that period. Many insurers raise this floor a couple of percentage points in order to guarantee modest returns in the event of market losses. This results in significant wealth-building during boom periods with gains that are locked in and no negative exposure risk during a market downturn.
It is important to note that these gains are not a direct mirror of the index. For instance, if a policy is tied to the S&P 500 and the market gains 20% in a single period, the policy will not accrue 20% cash gains. This is actually a good thing and it is the reason that an IUL is able to offer the guarantee that a market loss is not reflected in the cash value of a policy. In order to make this promise, the insurance company uses a metric to cap the amount of gains possible during market growth. The metrics used are the cap on gains and the percentage of participation rate. For instance, a policy with $100,000 cash value, a 12% cap, and an 80% participation rate would yield $9600 dollars in gains when tied to an index that grows 20%. ($12,000 cap X 80% participation rate).
The beauty of an IUL over a variable policy is that the policyholder can realize substantial income growth over time without their capital being burdened by the monthly ups and downs of market forces. Compared to a straight fixed policy, the percentage returned to the holder is significantly higher.
Additionally, unlike other investment vehicles such as a 401k, an IUL policyholder can withdraw the cash accumulated in their policy without penalties. In this sense, an IUL is really a policy that focuses more on the life of the holder than the death.
Fixed Life, Meet Variable Life.
IUL’s boast tremendous flexibility in regards to where the cash contributed by the policyholder eventually ends up. The tax-free savings account portion can be tied to virtually any available index in any desired amount. They can also choose to contribute more towards a fixed-rate part of their policy as a safe haven to guarantee more modest returns. It is this marriage of fixed and variable that has made IUL’s attractive vehicles for investment over the past 2 decades.
In fact, the versatility of IUL’s makes it easy to forget that they are still bonafide life insurance policies. This is due to the fact that the contribution towards a death benefit is often minimized in favor of greater sums being devoted to the tax-free growth of the index gains. Typically, a small portion of the cash contribution goes towards the life insurance premium alongside any fees charged by the insurer while the lion’s share of the cash goes into the indexed and fixed investments outlined in the policy.
Apples and Oranges
There are many things that you can do with your money in an IUL that are simply not possible with a 401k. With a 401K you are not allowed to:
- Take a Loan against it greater than $50,000
- Avoid paying taxes on gains made
- Avoid your heirs paying taxes on gains made
- Contribute as much cash as you want
- Avoid paying back money you’ve borrowed against it
- Avoid penalties from taking cash out of it
With an IUL, none of these onerous restrictions exist, and since it only gains on when the market gains, the fluctuations experienced by a 401K are actually benefits in an IUL. In a sense, an IUL resets at 0. Think of it this way. When the market loses 3%, a 401K must wait until the market recoups that loss before it can be whole again. With an IUL, you are always whole. If the market crashes, you earn no interest and you lose no capital. When the market begins to recoup its losses, the money grows with the positive momentum.
Who Should Purchase an IUL?
Given that the benefits of an IUL are realized over time, the younger you can purchase an IUL the greater your gains will be. Since the money you put into an IUL can be withdrawn, there is comfort in knowing that the cash put in today will be safe tomorrow. Since the money put in has already been taxed, policyholders will not be taxed again on the gains in the savings portion. Knowing that both your client’s money and their family is protected by the policy, a UIL for a young, earning, professional is both sensible and responsible.
There are many places to put money to meet growth goals and each of them yields different results in different market circumstances. An IUL offers more flexibility than an IRA and can pay attractive dividends down the road when clients are ready for retirement. When crafting a policy, be sure to work with the specialists at Rocky Mountain Insurance in order to clearly articulate the best program for your clients.
“The potentially catastrophic consequences of becoming disabled and needing long-term care is arguably the gravest financial risk that older adults face.” -Favreault & Johnson, Microsimulation Analysis of Financing Options for Long-Term Services and Supports
Insurance professionals at their best fuse their robust knowledge of products with their understanding of their client’s life-needs to craft a form-fitting policy that truly works. Insurance professionals are comfortable talking about life, death, and misfortune while helping their clients embrace the risk so that they can set themselves up for any outcome. Of all of life’s possible mishaps, none pose a greater financial risk than the need for long term care. Long Term Care Insurance is a very flexible and complex product. When designing the best policy for your client’s unique needs, we advise you to contact the experts at the Rocky Mountain Insurance Networks for guidance. Their devotion to serving insurance producers and their extensive knowledge of LTC insurance will help you navigate and design the most beneficial policies for your clients.
A Fiduciary Responsibility to Your Client
Your client has been saving up for their retirement for years. They have been investing in the market, contributing to their 401K, purchasing life insurance, and working hard for their families. However hard they have worked and saved, illnesses and misfortune can bankrupt their retirement in just a handful of years. It is estimated that 52% of people turning age 65 will require long-term care services at some point in their lifetimes. With the median annual cost of a nursing home facility at $95,775 dollars, even savings and assets with excellent growth will be depleted faster than they can be replenished. For these reasons, we believe that it is every insurance producer’s fiduciary responsibility to discuss long term care insurance with their clients.
When it comes to actually paying for long term care, your client has 4 options:
- Pay for long term care out of pocket. (19% of patients and their families shoulder this burden)
- Rely on friends and family members to provide care. (34 million Americans supplied unpaid care to adults over 50 in the past year)
- Pay for long term care insurance out of pocket
- Utilize existing assets to cover the cost of long term care insurance (such as life insurance and 401K using a 1035 exchange)
Dealing with the costs associated with a tragic life event or development that requires a long term care solution could be the most important financial decision your client ever has to make. From the list above, paying for your care out of pocket can quickly consume your client’s bank account and assets. Assuming a 4% decumulation rate of assets in retirement and a 9% additional decumulation due to long term care expenses, the loss will negatively outgain the rate of return. In an example where a client has 1 million dollars in assets with an average 9% return, the event of adding long term care would deplete the assets within 10 years. Essentially, the care itself effectively negates the gain and the client’s other expenses drain the assets. This is an unacceptable and tragic loss of everything your client has been working for their entire careers.
Unpaid Family Care: The Invisible Burden
The strength of family caregivers in the United States is heroic and noble. However, relying on family is not only limited in terms of medical expertise and best practices, but also sustains an enormous burden on the part of the caregiver. Late in our lives, the last thing we want to be on our loved ones is a burden. Statistics show that 70% of family and friend caregivers suffered work-related challenges because of the time spent caring for their sick loved ones. Additionally, over one-third of these caregivers experienced devastating financial strain. This is not the legacy that your clients want to leave for their children. Insurance that can balance the risk of this burden is not only responsible, but merciful during an already difficult experience.
Out of Pocket Long Term Care Insurance
Paying for Long Term Care Insurance out of pocket is a wise thing to do…if your client can afford it. A typical policy for 6 years of long term care that pays $7,000 dollars per month (once the claim has been established) and provides a payout in the case of death (should no long term care be needed) of around $140,000 can be purchased for a little over $70,000 in a one-time payment. This is far less than the average single-year cost of a room in a nursing home facility. On average, men and women will spend 1.5 years and 2.5 years in a long term care scenario respectively. It immediately becomes obvious that purchasing insurance is the most prudent decision in order to protect their assets from annihilation. But what about people who can’t afford to pay in cash?
Asset-based Long Term Care Insurance: The New Standard
Of all of the options to solve the long term care payment puzzle, asset-based long term care insurance is by far the most flexible and least painful way to ensure that your clients are taken care of should the need arise as they age.
By leveraging assets which they have already paid into, your client is able to create a safety net for their old age without robbing their retirement to do so. Purchasing long term care insurance through the transfer of a life insurance policy accrues no penalties of tax burdens while maintaining liquidity. Purchasing the insurance ignores pre-existing conditions and often does not require a medical exam. Many policies allow for the client to cash out their LTC insurance at a slight loss should they need the money for something else. Additional riders can be added (for additional cost) to extend care or to account for inflation of the price of care over time. For reference, between 2016 and 2017 the rate for a room at a nursing home rose 5.5 % and current prices look to continue that trend.
Additionally, clients can leverage their 401K to cover the cost of LTC insurance. From a tax perspective, this asset approach to obtaining coverage differs in that it uses pre-taxed money from a 401K. This means that the initial amount withdrawn to cover the policy will be taxed over time (20 years). However, advantages baked into the Pension Protection Act further reduce the tax burden of this approach.
Be a Compassionate Insurance Advisor
As an insurance advisor who cares about your clients, the necessity of long term insurance grows with each passing year. Traditional long term care insurance and asset-based long term care insurance offers quality care for when they are most vulnerable. It is invaluable in preserving their dignity, their family’s well being, and their security while acting as a seawall that buffers their assets and their legacy in the event of a high watermark. Your job as their advisor is to safeguard them from any eventuality, our job is to provide you with industry-leading experts on the complexities of LTC insurance that will help you craft a winning policy for your client. Speak with one of the many dedicated professionals at Rocky Mountain Insurance Network for assistance and make LTC insurance a part of your client offering.
Given the stark statistics that dominate the financial landscape of long term care expenses, adding long term care insurance to your client’s policy portfolio will offer protection when they need it most. Your client relies on you to guide them safely through a sea of risk and wild unknowns. Do right by them and defend their future with long term care insurance.
Not all potential clients want to go through the hassle of the medical underwriting process for their life insurance policy.
Imagine your client getting valuable life insurance protection, with all of the benefits provided in a cash accumulation IUL, issued in as little as 5 business days with no labs, exams, or APS!
When clients – even agents and financial professionals – see or think about a “guaranteed multiplier” in regards to Indexed Universal Life (IUL), many believe this feature is guaranteeing a positive index credit.
Unfortunately, that is not the case. And this all-too-common misconception could cost your clients heartache and money in the long term.
So what does it mean and what should you do?
Before your next appointment, download the whitepaper “Understanding bonuses and multipliers” so you can be the one to help your clients navigate this tricky terminology and allow them to make more informed decisions!
The cost of insurance is significantly less than the cost of taxation
Most people understand the benefits of diversifying investments among asset classes to help manage the risk and return of a retirement plan. But diversification can also be used to help manage the tax treatment of retirement assets – resulting in the potential for higher net income during retirement years.
Using an index universal life insurance policy designed to maximize your client’s tax-advantaged accumulation while providing life insurance benefits to their loved ones, is an option you should be offering.