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illustration of a magnifying glsas over a document representing the need to perform a life insurance policy review

Many clients view their life insurance policy as a ‘set it and forget it’ affair. After some time spent with their advisor crafting a policy to protect their loved ones and their legacy they simply go about living. Unfortunately, far too many advisors treat their policies in the exact same way. Once the sale is done and the policy is in force, they don’t truly consider it again as long as the premium payments continue. Not only is this a missed opportunity to sell a warm client new business, but it is also a disservice to the client. Policy reviews are essential for keeping your client relationship close and providing the best client service possible.

A phone call today could mean more business tomorrow

In reality, your client’s life changes all the time. They get married, they have children, those children go to college and start their own lives. As their lives change so too do their insurance needs. A policy you sold to a client in their 30’s may no longer be sufficient for the life they are living in their 40’s and 50’s. This is why it is imperative that you develop a relationship with your client that allows you to help them address their new needs as they arise. The policy review is the first step you need to take to address these changes.

As I mentioned earlier, most clients forget about their life insurance policy outside of their premium payments. They go on living their life under the belief that a policy they purchased a decade earlier will protect their loved ones in the event of their passing. They rely on you to know the ins and outs of their policy and to speak to them about new opportunities and products that could help serve them where they are at today. The policy review process is your tool to educate them on where their current policy works… and where it doesn’t in their current fiscal and health environment. The policy review affords you the opportunity to sell more insurance in an effort to provide your client with the best available protection.

a winding river representing the need to change your life insurance policy as your life changes

A change is gonna come: When to conduct a policy review

If you have clients that bought a policy from you a year or two years ago then you should go over their policy and reach out to them today. A simple check-up call or email to let them know you are still working on their behalf can go a long way towards starting the conversation about where their life has taken them. Ask them if there have been any significant changes to their situation since you last spoke to them.

Have there been any changes to their:

Income
Family
Relationship
Health
Mortage

Any and all of these can have serious implications concerning their current coverage. Maybe they recently quit smoking, lowered their blood pressure, and started living a health-conscious lifestyle that might save them precious premium dollars. Or perhaps they were promoted at work or had success in a new business and require more coverage than their older policy provides.

The purpose of a policy review goes beyond ensuring that their life and their policy are on the same page. It is a matter of developing deep and meaningful relationships with your clients. The more you learn about your client, the more opportunities you will be able to share with them. Going a bit further for your client will create trust and loyalty. Perhaps you have sold a policy for them but not for their spouse. Their children will need life insurance at some point in the future. Who are they more likely to buy from? An insurance salesman that their parent spoke to once or an advocate that their parent knows well and refers to them?

Before the call, perform an investigation on the policy itself

Review your client’s policy so that you know it inside and out. Look for common mistakes such as:

Are the beneficiaries current?
Is it tax-friendly to their estate?
Are there better solutions today that didn’t exist when the policy was written?

Take your questions and your findings into the review process. When done correctly, a policy review can save your clients money and provide them with more appropriate coverage. Your client will appreciate the time you’ve taken to help keep their affairs in order.

an antique telephone representing the need to call your clients to perform a life insurance policy review

It is always worth the conversation

Your client relies on you for your expertise. Keeping your client close and caring about their coverage means conducting regular policy reviews, checking in with them about how their life is going, and consistently communicating new products that could best serve them today.

Rocky Mountain is happy to help you review any policies and find better solutions for your clients. Together, we can ensure that the policies you sold yesterday help your client thrive tomorrow.

As the holiday season approaches and the long stretch of winter months begins, Americans enter a season of giving, goodwill, and family get-togethers. Charities and non-profit organizations make their greatest push during this time to ask for donations and fund their outreach.

When your clients think about life insurance, they most likely are focused on providing for their family, however, life insurance can also be a wonderful vehicle to support the various causes and organizations that they regularly contribute to. Let’s take this time to talk about how your clients can support their favorite charities through existing and new life insurance policies while easing the tax burden on their estate.

How donating life insurance can be beneficial to both the donor and the charity

Utilizing life insurance as a vehicle for charitable giving doesn’t only benefit the charity. For clients with substantial estates, gifting life insurance can offer substantial tax benefits for the donor. The government does not impose a ceiling on charitable donations for estate tax purposes. This means that while the charity that your client is passionate about helping will receive a substantial sum at the end of the policy, the donor’s taxable estate can be significantly reduced as well, easing the tax burden on their heirs.

Not all methods of donating life insurance proceeds to a charity enjoy identical tax estate tax advantages but using life insurance to support non-profits and charities can be more effective in terms of the size of the donation compared to simply giving cash. Let’s look at some of the options for using life insurance to finance donations.

fountain with hands catching water to represent charitable giving

Adding a charity to the list of life insurance beneficiaries

Perhaps the simplest way for your client to support their preferred charities involves adding the charity to the list of beneficiaries. While the tax benefits of this method aren’t as significant as gifting a policy directly to a charity, adding the charity as a beneficiary will reduce the taxable estate by the amount received.

The only obvious advantage here is privacy. When the charity is a beneficiary, the donor is able to keep secret their gift from their heirs. This also means that the donation cannot be contested, ensuring that your client’s wishes will not be hindered or interfered with in any way.

Adding a charitable giving rider to an existing policy

A charitable giving rider can be added to your client’s life insurance policy often at no additional cost or loss of value to the death benefit. The rider specifies a percentage of the policy face value to a charity that qualifies for inclusion in the rider. There may be some limitations specified in the rider as to the amount of the gift. These should be discussed with your client when considering the best approach to support their preferred charity. These riders may also require a higher amount of protection in order to qualify.

Some Charitable Riders of Note

Some charitable riders go above and beyond in the name of charitable giving. For instance, Symetra offers a Charitable Giving Benefit rider at no cost upon purchase of life insurance. Their rider provides a chosen charity with a dollar amount equal to 1% of the death benefit on the policy. It also makes it free and easy to change the charity that receives the money throughout the life of the policy.

Additionally, AXA offers a Charitable Legacy Rider with some of its policies that meet minimum death benefit requirements of $1 million or greater. This rider adds an additional 1% benefit to the total death benefit for a chosen charity.

The benefit of a charitable giving rider is ease and convenience. There is no need to create and manage a gift trust for the charity until the death of the insured client. This is a simple approach to charitable giving that can offer a substantial windfall to the charity with little effort on the part of the donor.

A wrapped present representing adding a charity to your life insurance policy

Donating entire policies: Where compassion and tax advantages meet

There are several advantages for both your client and the charity when donating a life insurance policy. For your client, donating a policy can offer a significant reduction to their taxable estate. Depending on the wealth your client leaves behind, this can represent thousands of dollars in tax savings. For high-net-worth clients, donating a policy can satisfy their philanthropic needs and reduce their overall estate tax without disturbing their overall financial plan.

For the charity, the amount of money received through a donated policy is often much greater than simply adding a rider to their policy. There is no ceiling on the amount that can be donated. The donor is responsible for paying premiums on the policy which are also tax-deductible.

Gifting a life insurance policy can also be used to turn an older, unwanted policy into a meaningful donation. Perhaps your client has an older policy that no longer fits their current needs. In this case, converting that policy to a charitable gift can make a difference to both the charity and your client’s taxable estate.

‘Tis the season of giving, let us know how we can help

Rocky Mountain is happy to help you explore charitable life insurance options for your generous clients. Leaving a financial legacy for their heirs is important, but so is leaving the world a better place than they found it.

For you clients who want to make a meaningful impact with their charitable giving, let us know how we can help you present them with options that are mutually beneficial. Happy holidays from all of us here at Rocky Mountain. We wish you and your family a safe and loving holiday season.

Life Insurance awanerness month marketing

While September is officially Life Insurance Awareness Month, in reality, every month presents an opportunity to reach out to old clients and discover new opportunities in your local market. Marketing and outreach are concepts that get thrown around quite a bit in the industry. Some agents excel at making new connections while others may need more concrete direction in order to feel comfortable. This month, we are gonna go over a couple of ways you can find success in your marketing campaign.

Work your existing business: the power of policy review

Some of the best revenue opportunities lay in your existing client base. Changes to regulations that affect our business and your clients’ opportunities such as the illustration update from AG 49A and IRC Section 7702 create a compelling reason to check in on your clients’ policies.

Reaching out via email or phone to offer a policy review has two main benefits: it shows your client that you are always looking out for their best interests and presents opportunities for your client to save money, purchase more coverage if their goals have changed, and helps keep them aware of new products and alternatives that may be applicable to their needs.

Make use of email campaigns to all of your clients regularly

In addition to offering a policy review, it is important to keep the line of communications between you and your client open throughout the month and year. A consistent, targeted, email campaign can help you get the word out about new products and services to your book of business while maintaining your brand and presence with your clients.

Social media marketing for life insurance

Use social media software to keep your clients in the loop

Social media scheduling software has come a long way in the past several years. Posting to socials can be a chore but going to where your client is online is still one of the best ways to connect with them.

Lifehappens Pro is your friend

Lifehappens Pro is a suite of technologies that can help simplify your overall outreach campaign. With the click of a button, you can coordinate social posts to reach your audience on several platforms. Check out their free trial and give it a go. You can find it here.

Lifehappens Pro can give you:

Flyers, brochures, and graphics to use in your campaign
Videos for greater client engagement
Themed campaigns (such as one for LIAM) to generate awareness
Content collections to pull resources from
Social media posting and analytics to see what’s working and what’s not
Calculators for just about anything your client would like to see

The trial is for 15 days, and after that you can keep the outreach rolling for only $32 dollars per month. We endorse them because we use them. It’s that simple and it will help take your marketing to a new level.

podcasts for life insurance marketing

Have you ever been on a podcast?

Consider creating a podcast that you can link to your website. Your clients aren’t in the industry, but that doesn’t mean that they don’t want to know more about what’s happening in life insurance. A monthly podcast can be a great way to keep your content fresh while discussing the job you love.

Or be a guest on someone else’s podcast

You can also search Spotify, Itunes, and other podcast libraries for existing podcasts about life insurance. Content creators are always looking for new people to talk to and interview. Reaching out to the owner of the podcast with some topics that you’d like to talk about is another way to get your message across. This has the added benefit of connecting with a pre-existing audience and could help with lead generation.

life insurance digital marketing

Use life insurance statistics: bring the receipts

Statistics can be a great way to illustrate the importance of life insurance on your website, social posts, blogs, and public appearances. Lifehappens and LIMRA are your go-to sites to find the latest studies and stats about the industry. Showing your visitors the current trends in the market can amplify their understanding while giving you targeted content to present in all of your marketing campaigns.

Reach out, follow up, and carry on

Ultimately, marketing outreach is something that you should prioritize if you want to grow your business. It’s important to maintain regular contact with your client. The marketing Rule of 7 states that a prospect will take action after hearing or seeing a message 7 times. While that may seem over the top, the implication is clear: If you aren’t reaching out and presenting clients and prospects with consistent messaging, very little will move them to take you up on the opportunities you are offering. Make outreach a small part of your daily routine and follow up on your success.

Term life insurance is used for a variety of different reasons. At its core, however, it offers inexpensive coverage in the event of the unthinkable, providing your clients’ families and businesses with a large payout for a specified duration. These durations are most commonly 10, 15, 20, 25, and 30 years. Those durations, coincidently, also correspond with common loan amounts people would use for either their mortgage payments or their small business loans. Let’s explore a creative and cost-effective way to help your client pay off their house in full should anything happen to them during the course of their mortgage agreement. Let’s take a look at term life layering.

Simple Term Insurance to Protect Your Client’s Home

Mortgage loans are often either 15 or 30-year notes. Mortgage protection insurance (not to be confused with primary mortgage insurance, or PMI, which is often required by the lender in case of default on the loan) is voluntary and covers the outstanding mortgage amount in the event that the homeowner dies.

What would happen if the primary wage earner died and the spouse suddenly had a mortgage payment due next month without the additional income? In today’s hot real estate market, the spouse could probably sell the home quickly and take the equity in the home to live off of for a while, but is this the best option? What happens in the future when the real estate market cools and it takes 6 months to sell the home? Will that spouse and the kids get evicted after a foreclosure? These are the types of questions that your client might not think to ask themselves. This is why they look to you for guidance and consultation. Fortunately, for the savvy broker, there is an intelligent way to layer term life so that addresses these concerns in an equitable way.

In the most obvious approach to solve these various crises, a client with a 15-year mortgage on a $500,000 home that they already put $200,000 down on, could use term life insurance to protect the remaining $300,000 balance by purchasing a 15-year term insurance policy for that amount. This way, should something happen to your client during the mortgage term, the death benefit would allow their spouse to pay off the house, not disrupt the kid’s daily lives any more than is already happening, and provide the breathing room necessary to make it through this difficult time.

Layering Term Life: Protect Your Client’s Mortgage Without Mortgaging Their Pocketbook

Layering (sometimes referred to as laddering) is accomplished by utilizing multiple term insurance policies, with various durations, to cover the mortgage loan. If your client took out a $300,000 mortgage, as in the example above, they would be paying down the mortgage over time. In this case let’s say the mortgage was a 30-year mortgage, instead of a 15-year. As they’re paying down the principal on the loan, they don’t need as much insurance in year 20 as they did in year 5 because they’ve been paying down the loan for an additional 15 years. So…they need to get three insurance policies: a $100,000 10 year, a $100,000 15 year, and a $100,000 30 year term life insurance policy that adds up to the same $300,000 in coverage on day one. Here’s where the math gets fun and where we can really save some money while protecting our clients. If a reasonably healthy, but slightly overweight, 45-year-old man buys a 30 year, $300,000 term policy to cover his $300,000 30 year mortgage, it will cost him about $1150 per year, or about $100 per month. If he were to instead layer the 10, 20, and 30 years, $100,000 policies, it would cost a total of $980 per year, or just over $80 per month. That’s almost a 20% savings each month! And it doesn’t end there!

Term Layering Presents a Tremendous Savings Over Time

Since mortgages are paid out over time, your client doesn’t need $300,000 in coverage in year 15, as they have already paid some of that down. By layering term policies, not only do you save them on the monthly cost of the insurance, but, in the example, we’ve used here, after each 10 year period, one of the term policies drops off, and they no longer need to pay for those, again lowering their monthly cost. In the first 10 years, they need all three policies in place, but after year 10, the 10-year term insurance policy drops off, lowering their monthly payment on the two remaining (20 and 30-year terms) to about $780 per year. And, 10 years after that, the second policy drops off, leaving them only with the remaining 30-year policy (which at this point still has 10 years to go), and again lowers their monthly payment to under $500 per year! Take the total premiums for 3, $100,000 policies that we layered and the total over 30 years would be about $22,500. A more than 35% savings compared to paying for a $300,000 30 year term!

Let’s check out some actual numbers to drive the point ‘home’.

Layered Premium Schedule for Male, age 45 Standard Non-tobacco

Year	10-Year/$100,000	20-Year/$100,000	30-Year/$100,000	Total Premium	30-Year/$300,000
	Annual Premium	Annual Premium	Annual Premium	Annual Premium	Annual Premium
1	$198.92	$290.51	$487.88	$977.31	$1,158.02
2	$198.92	$290.51	$487.88	$977.31	$1,158.02
3	$198.92	$290.51	$487.88	$977.31	$1,158.02
4	$198.92	$290.51	$487.88	$977.31	$1,158.02
5	$198.92	$290.51	$487.88	$977.31	$1,158.02
6	$198.92	$290.51	$487.88	$977.31	$1,158.02
7	$198.92	$290.51	$487.88	$977.31	$1,158.02
8	$198.92	$290.51	$487.88	$977.31	$1,158.02
9	$198.92	$290.51	$487.88	$977.31	$1,158.02
10	$198.92	$290.51	$487.88	$977.31	$1,158.02
11		$290.51	$487.88	$778.39	$1,158.02
12		$290.51	$487.88	$778.39	$1,158.02
13		$290.51	$487.88	$778.39	$1,158.02
14		$290.51	$487.88	$778.39	$1,158.02
15		$290.51	$487.88	$778.39	$1,158.02
16		$290.51	$487.88	$778.39	$1,158.02
17		$290.51	$487.88	$778.39	$1,158.02
18		$290.51	$487.88	$778.39	$1,158.02
19		$290.51	$487.88	$778.39	$1,158.02
20		$290.51	$487.88	$778.39	$1,158.02
21			$487.88	$487.88	$1,158.02
22			$487.88	$487.88	$1,158.02
23			$487.88	$487.88	$1,158.02
24			$487.88	$487.88	$1,158.02
25			$487.88	$487.88	$1,158.02
26			$487.88	$487.88	$1,158.02
27			$487.88	$487.88	$1,158.02
28			$487.88	$487.88	$1,158.02
29			$487.88	$487.88	$1,158.02
30			$487.88	$487.88	$1,158.02
Total Premium Paid	$1,989.20	$5,810.20	$14,636.40	$22,435.80	$34,740.60

Term Layering is a Strategy with Wider Applications

I used mortgages as an example here because the term durations offered by the insurance companies align well with mortgage loans. This strategy of layering can be used to fit many financial plans and objectives. Essentially any time-based asset that requires protection can be handled well and affordably with layered term policies. Your clients count on your expertise to help them protect their families and their assets. Thinking outside the box can reveal new strategies that save them money while still offering the peace of mind they need. It is always worth taking a look at how to use any insurance product to make sure that they get the most out of their coverage. Insurance products aren’t one-use propositions. Depending on the carrier, the budget, and the need, there are many ways to use any product to best fulfill the goals of your valued clients. Feel free to reach out to Rocky Mountain to see how you can provide the best possible opportunities for your client.

should you spread out your clients death benefit over time

The Pros of a Spreading Out Your Client’s Death Benefit

Have you ever been in a competitive situation with another agent and wish you could knock down the premium on a life insurance product while keeping the death benefit the same? Have you ever had a client come to you and as part of their overall financial plan you helped design, needing a certain amount of death benefit associated with their life insurance within a specific budget? How about a client who looks at you when you mention life insurance and says “I don’t want Mama/Papa to run off with a boyfriend/girlfriend with a whole bunch of money after I die!”? (This last one is one I’ve really heard!) There is a rider that comes free of charge, which can solve all of these issues.

benefits to spreading out the death benefit

A Rider to Spread Out the Death Benefit

A few carriers offer the ability to spread out the death benefit of a policy. The general idea is that instead of paying out the beneficiary a lump sum amount at the time of death, the owner of that policy can annuitize the death benefit, in a fully customizable way, to their heirs. Sometimes referred to as a “poor man’s trust”, these spread death benefit riders allow the owner to control the benefit paid from beyond the grave. If they have a spendthrift spouse or kid and are worried that they’ll take the entire $1 million death benefit and blow it in Las Vegas, they can dial in a smaller lump sum initially, provide a steady income for up to 30 years, and then also have a final lump sum payout at the end.

Spreading Out the Death Benefit Can Reduce Premiums and Raise Payouts

Let’s take a look at some examples here. Jeff and Stacy are 30 years old and have 2 young children. Jeff buys a term life insurance policy with a spread death benefit rider. The policy is applied, underwritten, and approved for $1,089,077. A few years later, Joe suddenly dies in an accident. His term insurance policy had been structured when it was purchased to pay out an initial lump sum to Stacy for $250,000, allowing her to pay off the house, cover his final expenses and wipe out the other credit card debt they had accumulated. Then, for the next 15 years, Stacy received a steady $3,000 per month, every month, until the kids finished school and at the end of the 15 years, she received a $500,000 final lump sum. The final lump sum was used to pay the kids’ college tuition and fees, and help fund Stacy’s retirement.

The total payout in this example was $1,290,000. The policy was a 30-year term policy and by structuring it with the spread death benefit option (at no cost) at the time of application, they were able to save $249 per year in premium. Remember, he only applied for $1,089,077, and that was what he paid premium on, not the $1.29MM total payout.

Here’s another example. Andrew is a 50-year-old male needing a $2,000,000 20 policy to make sure that his special needs daughter is covered if he were to die. At a standard rate, this will cost him $6,170.00 per year in our example. However, he has a budget of $5,000 per year. By structuring the policy to pay an initial lump sum of $250,000 to cover his final expenses, pay off the house, and providing a $250,000 final lump sum for her benefit, he is able to get to the same $2,000,000 payout and provide his daughter with a $5,002 fixed monthly payment for 25 years. And he did all that with only needing to be underwritten and approved for $1,586,916 at the time of application and the annual premium now fits his budget costing only $4,901.83 per year!

A Common Concern: Keeping Your Family Solvent for Years After Your Die

A fairly common objection to life insurance involves concerns about how a beneficiary will spend the death benefit. Some people really are against the idea of their spouses getting large lump sum payouts and “having a good time” without them at their expense. If Robert is 40 and in pretty good health. After filling out a needs identifier with you online, it’s determined that he needs $500,000 to replace his income for the next 15 years while the kids are still in the house. A 15 year, $500,000 term policy will cost him $45.58 per month, but he tells you that half a million dollars is way too much! “Why do they need that much money?! They’re just going to run off and vacation without me. They need only enough to cover my burial expenses.” By using one of these spread death benefit riders, you can now design a policy to have an initial benefit payout of $50,000 to cover the funeral expenses and pay off the car. Then for the next 15 years, while the kids are still in the house, we can replace his $2,500 per month income that “Mama” can’t get at while allowing them the same standard of living they were accustomed to. In this case, the monthly premium savings is minimal, now costing $44.93/month, but he’s accomplished his goal while still providing his family the protection that they need.

Rocky Mountain Can Help You Design A Case For These Clients

Each carrier’s rider is slightly different, but the one thing they all have in common is that they need to be selected at or before the time of issue. They can always be changed or canceled by the policy owner at any time prior to the insured’s death, but they cannot be added after the fact. We can help you with this case design if you have clients that fit these examples.

The current Guaranteed UL market is tumultuous to say the least right now. Everyone in our industry speaks to the “continued historic low interest rate environment”, and of course, they’re right. However, the fact remains that there are still options out there for low cost guarantees on permanent insurance to solve current (and likely even greater, future) estate planning problems. Indexed UL doesn’t have the same requirements as their GUL counterparts, and thus our carrier friends can offer lower premiums for equal death benefits.

Immediately though you think “but my client needs the guarantee in death benefit afforded by a GUL!” I’m amazed at the number of conversations I have with advisors that are unaware that IUL’s, specifically protection style IUL’s, offer guarantees to age 90, 95, 100 or beyond! Not only can we offer a death benefit guarantee to age 95, but we also have the advantage of indexing that can provide substantial cash value when designed correctly, often requiring less premium than its GUL cousin. The best of both worlds! The GUL, which still has its place in the planning world, continues to struggle. And yes… this is due to the longevity of the low interest rate environment that we currently experience.

There will always be a place and a need for guaranteed death benefit policies. As carriers providing traditional GUL policies continue to increase rates due to the hardship of the unforeseen, prolonged suffering of their general accounts because of the historic low interest rate environment, there do remain a few that stand out amongst the rest. There are still products to be found that are positioned to take advantage of this need and continue to rise to the top, even in an uncertain world.

Whether your client is looking for a single pay, short pay or 1035 scenarios, one carrier comes to mind immediately. Protective’s Lifetime Assurance UL and Advantage Choice UL are uniquely positioned in the GUL/GIUL space still to help these clients! And remember, IUL with no-lapse guarantees, offer both the protection of a GUL as well as the potential cash accumulation of an IUL with higher target premiums! Have your cake and eat it too!!!

Let’s take a look at some Protective examples.

Level Pay Design
Male Age 55 Standard Non-Tobacco, $500k DB, Guaranteed thru Age 100

1035 Exchange Design
Female Age 65 Standard Non-Tobacco, $1M DB, $200k 1035 Exchange, Guaranteed thru A105

Short Pay Design
Female Age 45 Select Preferred Non-Tobacco, $1M DB, Pay to Age 65, Guarantee thru Age 90

May is National Disability Insurance Awareness Month, DIAM. It, coincidentally, is also ALS Awareness Month, Correct Your Posture Month, National Stroke Awareness Month, National Motorcycle Awareness Month, National Brain Cancer and Brain Tumor Awareness Month, National Moving Month and Older Americans Month.

If you ask me, we get a little carried away with all the National Awareness’s, but having no control over it, I suppose we ought to embrace it. The mentioning of all the latter awareness’s above is they all may cause one to become disabled. So, while risking continued awareness fatigue, perhaps it is prudent to celebrate May as National Recommitment Month, and take another look at Disability Insurance.

We’ve all heard the old sales tactic of “if you had a machine that printed money, wouldn’t you want to insure it?” The idea being that our incomes are our biggest assets needing protection and if we were suddenly to become disabled, breaking the machine, it would have behooved us to have protected it with insurance. We also know that we are far more likely to become disabled then we are to die. The reality is, it’s very difficult to get people to listen. If a dentist or surgeon develops carpel tunnel syndrome and they are no longer able to perform their duties, how’s that practice going to survive?

Let’s talk about something a little different today though, still related to DI. Let’s talk about a disability buyout in coordination with a “deathtime” buy-sell agreement. Many business owners have been approached on the importance of funding their buy-sell agreement with life insurance, but far fewer have been approached about funding a disability buyout. What if we could take care of both with one policy? By utilizing a cash value life insurance policy, like an Index Universal Life, with a guaranteed death benefit out to age 95 or 100, we can accomplish this.

A properly designed IUL will accumulate cash value over time and provide a death benefit that can be used to fund the death time buy-sell agreement. Many IUL’s now have the ability to dial in a guarantee on the death benefit anywhere up to age 100! In the event that that business owner becomes disabled (far more likely than dying prematurely remember), the cash value in the policy can be used to either partially, or fully fund a disability buy-out of that business partner. Add a waiver of premium rider to the policy will allow the business to free up some additional cash that can be used to complete the buyout. As long as the policy doesn’t lapse, the death benefit after the partner dies, can also be used to complete the buyout if it hasn’t done so already.

Choosing the right carrier and the right policy is the key to a successful buy-sell or buyout funding plan. At Rocky Mountain Insurance Network, we are here to help with just that type of case design.

It has never been more important to help our clients protect what they have from the volatility in the market. According to a new study from Allianz Life, more than half of Americans say the pandemic has had a negative effect on their retirement savings and nearly the same number say they don’t think the markets have seen their lows yet. 72% say that they are reevaluating their savings plan and thinking about how to protect what they have from market volatility.

This is a great opportunity to have a conversation with your clients about hedging their retirement savings with an Index Universal Life policy. Insurance companies have figured out a better mouse trap and we owe it to our clients to discuss it with them. If 72% of our clients are looking to hedge their market risk, we already have the solution and we can help them with that. The IUL story has always been upside market potential with downside protection.

The introduction to multipliers a few years ago threatened to destroy that story with asset based fees and other hidden “Black Box” charges associated with their bonus multipliers in an effort to win an illustration war. AG-49a has put an end to those games and we now have a level playing field once again, that is in the best interest of the client. We can once again confidently discuss the benefits of Index UL with our clients.

Finally, there is no better asset class then a cash value life insurance policy when it comes to the tax advantages. A common objection we always hear is the underlying cost of insurance inherent in all of these contracts. A little known change in the IRS definition of life insurance, IRC sec. 7702, will make the cost of that insurance lower than ever. At Rocky Mountain Insurance Network, our motto has always been “The cost of insurance is significantly less than the cost of taxation.” Call us today so we can show you how we are helping our agents and advisors use IUL to hedge against market volatility and provide tax advantaged savings for their clients.

Life insurance is often thought of as the most effective way to replace a breadwinner’s income in the event of tragedy. Often overlooked however, is the need to cover the non-working spouse. Picturing life without your spouse is hard and most don’t like to do so, and for the advisor, it makes for a very difficult conversation about your client’s mortality. The fact is that a non-working spouse is as important to the family, if not more so, then the breadwinner. If, heaven forbid, the unthinkable does happen and a non-working spouse dies too early, the effect on the family will go far beyond the emotional grieving that ensues.

The financial ramifications of losing either spouse to premature death can be devastating. If that spouse is a stay at home parent, the ability to now pay for child care alone can crush a family’s budget. The working spouse, in order to continue the income stream they produced, will have to go back to work, but will likely want to do so only after they’ve had adequate time to grieve and console the kids. If that non-working spouse had coverage in the form of life insurance, they would be able to take the necessary time off before having to return to work allowing the family time to heal and plan for the future. Thus when the surviving spouse does eventually have to return to work, the affairs associated with the estate have been settled and planning for help with child care can be lined up.

There is no doubt that the cost of child care has skyrocketed in recent years. Ensuring there is enough life insurance coverage in place to pay for that necessary cost, will result in the family being financially secure and allow the other spouse to return to work. But the benefits don’t end with just child care. There are many things to consider if a non-working spouse dies. They were likely responsible for transportation, meal preparation, and other household activities that we take for granted in a one-earner household that would now need to be attended to, and if the breadwinner is to return to work, then those activities will need to done by someone else.

Furthermore, we haven’t yet discussed the real possibility that there may still be outstanding debt as well as medical bills that were accrued prior to the spouses passing. These medical bills can be huge! Life insurance doesn’t need to be expensive to provide the coverage a family like this needs, but the conversation must happen if we are to provide a holistic approach to the overall financial plan.

A good rule of thumb is to have a policy with 75% of the face amount then that of the breadwinner and this can be accomplished with an inexpensive 20 or 30 year term policy. Many of these policies today also include living benefit riders that may provide a portion of the benefit early if a major medical event occurs. This may very well allow a quality of life during the final months of an illness that would be unimaginable before. Stories of a terminal cancer diagnosis on a young father qualifies him to accelerate some of his death benefit so he is able to take his family on a memorable vacation to Disney Land are common with these types of policies. Imagine, as a financial advisor or insurance professional being able to bring the heroic news that that family will now get the money they need when they need it most!

There are real benefits for estate planning purposes as well. Whether a separate policy is used and placed in a trust for a family with a sizable estate, or a second-to–die policy is used, exceptions on the typical maximum of insurance allowed for a non-working spouse can be made. There is financial underwriting that occurs in each applied for policy. Insurance companies will make income exceptions for non-working spouses for a number of reasons. Knowing some of the guidelines, or having them at your fingertips when meeting with clients, will help you better present and explain the need for this insurance. We’re here to help. Let us know who needs this in your book of business, and we’ll leverage our resources to get these families the coverage they need.

Whether you agree with it or not, it’s our new reality and it’s not likely to change anytime soon. 11% of US adults say they have used marijuana in the last month and 48% of them have admitted to using it at least once in their lives. These aren’t just millennials either. These adults are fathers, mothers, grandparents and business owners and have no less need for the protection that life insurance provides then the non-user.

Historically it’s been difficult to find coverage for anyone who admits to drug use including marijuana. While it’s still a challenge finding coverage for the employee or owner of someone in the marijuana industry, insurance carriers have become more relaxed about the users of marijuana.

Depending on age, usage and whether or not THC is found in the lab results, we may be able to help clients get a preferred best, non-tobacco offer today. Download the file below to a list of some of the carrier’s requirements. For better or worse, Colorado led the pack in legalizing marijuana and at Rocky Mountain Insurance Network, we are here to help our advisors find the best possible coverage available for all of your clients.

Underwriting for Marijuana Clients

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