3RD QUARTER 2011
Become the Big Fish in your Small Market! (Page 15)
100% Independently Owned Rates available 24/7
TWO ways to protect your clients’ retirement savings regardless of how the market performs... • Return of Premium Guarantee At NO COST!
• A fixed-indexed annuity with Return of Premium and Bailout
• Premium Bonus for first 5 years
• features not found in a CD
• Income for Life Rider Available
• Return of Premium At Any Time No Charge!
• Full Account Value at Death— Annuitization NOT Required • 10% Penalty-free Withdrawals for all issue ages
• Guaranteed Lifetime Income Option 10% Rollup Credit • Bailout Cap For Indexed Strategies
• Variety of Strategies with Competitive Rates
• 10% penalty-free withdrawals in the first year & each year thereafter
• Flexible Premiums
• No MVA / Available to Age 85
Team up with Great Plains for access to these and over 60 insurance carriers and hundreds of products. We’re 100% INDEPENDENTLY OWNED to guarantee you access to the fixed annuity and life products you need!
800-710-1115
Call today or visit www.greatplainsannuity.com
PAGE 2
JUST the FACTS | 3RD QUARTER 2011
INSIDE… 6
3RD QUARTER 2011
WHAT’S THE BEST ANNUITY?
How can you separate yourself from your competition and become the trusted advisor? Show your clients and prospects annuity solutions tailored to meet their needs and goals instead of predetermined, one-size-fits-all products.
10
USE MARKET LINKED CDS TO ENHANCE ANNUITY SALES
PRINCIPALS Rich Hellerich Robb Edwards
ANNUITY MARKETING • Andy Amborn • Brad Allen • Brian Dixon • Cindy Nelson • Jane Plumberg • Kara Langdon
Consider this new product offering for clients focused on safety and their comfort level with CDs to open the door to more fixed and fixed index annuity sales.
12
WHAT’S HOT AT GPALM?
A quick overview of news items and ideas to help you write more business.
15
SMALL MARKET SEMINARS EQUAL’S BIG OPPORTUNITY
16
FISH’N WITH RICH – GPALM’S NEW AGENT INCENTIVE
Small markets can produce big results, and Great Plains “Rural Agent Marketing” is turn-key system that can help you become the big fish in your small market! If you haven’t considered the rural market you could be missing out on steady sales and more commissions!
LIFE MARKETING • Dick Reynolds • Tim Edwards
ADMINISTRATION
• Cris Larson • Kathy Putnam • Mackenzie Oakley • Naomi Mayekawa
If you love to fish, don’t miss this opportunity for the experience of a lifetime. Join Great Plains for a fishing trip you’ll never forget!
18
LIFE / ANNUITY ARBITRAGE
Some of the best insurance marketing concepts have been around a long time.
20
REAL LIFE CASES WITH A TWIST IN PLANNING
Two actual life case examples show how to use life insurance to offer clients planning alternatives that make sense to their situation.
22
JUST A THOUGHT
What’s your attitude towards your existing client database? Are you missing the opportunity to increase your production with less effort, money and time?
JUST the FACTS | 3RD QUARTER 2011
11900 W. 87th St., Ste. 115 Lenexa, KS 66215 Toll Free: 800-710-1115 Local: 913-492-9994 • Fax: 913-492-9998 http://www.greatplainsannuity.com JUST the FACTS is published quarterly for the benefit of independent insurance agents and brokers contracted with Great Plains Annuity & Life Marketing. Great Plains assumes no responsibility for the professional training or continuing education of agents. This publication is for agent use only, and not to be used to solicit sales from the general public. Products noted may not be available in all states. Great Plains does not offer tax, investment or legal advice. While every effort is made to confirm accuracy, published rate and product information is subject to change. Material herein may not be reproduced in any form without permission.
PAGE 3
JUST the FACTS Fishing is one of my passions, and I have been known to share fishing stories with producers that share my love of the sport. I’m excited to announce a new GPALM production incentive that begins on September 15th of this year and runs through December 31, 2012. If you love sport fishing as much as I do, you’ll want to learn more about our Great Plains’ “Fishing with Rich” incentive. I’m going to take a limited number of our top producers on what will be the “fishing trip of a lifetime”, guaranteed. See page 16 and contact your Annuity Advisor for details. We are delighted to help you qualify for the various trip incentives offered by the carriers we represent, but this is something that will be an experience you will never forget. If you don’t like to fish, know that we will be offering other unique opportunities for “experiences of a lifetime”. (Robb is already working on the “Golf Trip of a Lifetime”) I was recently invited to participate on an industry panel discussing marketing annuity products to Baby Boomers for Broker World magazine. The questions centered on: • What annuity products should brokers consider when working with Boomers? • What annuity product or marketing trends offer significant potential for the Boomer market? My simple answers are Fixed Indexed Annuities and Income Planning, based on sales activity here at Great Plains.
Since January 1st of this year, statisticians report that more than 10,000 Baby Boomers turn age 65 everyday, and this trend will continue for the next 19 years. If we add existing consumers aged 50 to 65 to our prospect list, we have the largest potential annuity market in history. Great Plains offers over 60 carriers and hundreds of annuity products to help you meet the needs of your clients and prospects. Our internal annuity marketing advisors can help you not only with case development and product selection, but lead generation and marketing tools as well. Call us today and learn more about the following GPALM programs: • After Market Annuities – Open the door to High-Net-
Worth Clients • IncomePLUS – our proprietary laddered income
planning client presentation • Rural Agents Marketing Program – discover BIG
opportunities serving small markets • Lead Generation Tools – seminars/e-marketing/direct
mail and more Frustrated with the current low interest rate environment, or looking for a way to get in front of prospects with something that will start a conversation and set you apart from the competition? Call your GPALM Annuity Marketing Advisor now regarding our Market Linked Certificates of Deposit. See page 11 for additional information on how you can offer this new asset class and give CD customers the security of principal protection and safety with the opportunity for higher interest credits.
PAGE 4
• Marketing Reimbursement –use your GPALM
production to reduce your marketing expense The value you provide clients is created by meeting their needs, not the specific carrier(s) or product(s), and current economic conditions have consumers more concerned than ever about financial safety. Call your GPALM Annuity Advisor now to learn how we can help you take advantage of the biggest fixed annuity sales opportunity in history – the Boomer Market!
JUST the FACTS | 3RD QUARTER 2011
- After-Market Assignments -
5.00% - 6.75% Guaranteed All Years! (Not an Income Rider)
After-Market Assignments offer guaranteed future payments from highly rated insurance carriers but with a significantly higher rate of return than found with a new direct purchase.
e the t a t i l i c Fa our y r o f e s purcha urchase rp client o account! n your ow
• Priced to yield 5.00% to 6.75% Guaranteed All Years, Regardless of Duration • Originally Issued by Highly Rated Insurance Carriers A - AAA
(800) 710-1115
www.greatplainsannuity.com JUST the FACTS | 3RD QUARTER 2011
PAGE 5
WHAT IS
THE BEST ANNUITY? This question tends to be the most asked during my first conversation with a producer. My answer sometimes frustrates even the most experienced agent even though the answer is pretty simple: “For what?” I think we, as producers and marketers, tend to forget that the “best annuity” for our clients is the one that that solves their needs and goals, not one that we have pre-determined is the best one for the masses. And with the new riders and features available on annuities, this Calvinistic view to financial planning has become more prevalent, sometimes to the detriment of the clients we are trying to help. Allow me to clarify my position: • First, in my opinion, there is no such thing as a bad annuity, only one that has been inappropriately sold. A client who wishes to put money away for 5 years to earn a higher interest rate than the CD at their local bank probably shouldn’t be shown a 15 year product with a 10% bonus. This is typically what is called an unsuitable sale. • Second, annuities have many purposes that they can be used for, but mainly these purposes are centered on retirement and/or estate planning. • Third, there is a reason why there are hundreds of different annuity products in the market place. Different clients require different solutions. Identify the needs/goals of your client and find the product that fits their profile. • Fourth, the simplest solution is not always the best. Sometimes a little extra work on your part will make a world of difference for your client and for you. PAGE 6
GUARANTEED MINIMUM INCOME BENEFIT RIDERS – INCOME PLANNING OVERSIMPLIFIED GMIB Riders - you either love them or you hate them, and both opinions have their merit. I have found that many times, the reason you love them is the reason why you should hate them, and vice-versa. There are many misconceptions surrounding these mysterious riders, both pro and con. The simple truth about income planning is to provide your client with the greatest amount of income for the lowest amount of premium. POP QUIZ: Your client wants the greatest amount of lifetime income and has $100,000 to spend. Company A provides a lifetime income of $1,000/month for $100,000 of premium. Company B provides a lifetime income of $1,100/month for $100,000 of premium. You should offer: a) Company A b) Company B c) Combination of A and B d) Hope that your client develops Midas-like abilities and can then avoid touching their loved ones. Good, every one answered correctly with Company B. Notice that there was no discussion of commissions, fees, caps/interest or rollup rates. All of these tend to confuse and distract from the solution that should be staring you in the face. The only thing that matters to your client is to provide the greatest amount of income for the amount of premium they have. JUST the FACTS | 3RD QUARTER 2011
amount of income early on provide some of the lowest payouts if started in later years. The ones that generate the lowest income if started early can be the ones that produce the greatest amount of income later on. For those clients with larger amounts of premium dedicated to generating income, more advanced planning comes into play. Laddering multiple annuities to generate income at different points in time not only generates more income, but also charges them less when it comes to fees on the income riders. TABLE #2 (SHOWN ON PAGE ??)
To pick the best income rider for your client, you will need to know a couple of factors: How much money do they have set aside for income and when would they like it to start? How much they have for income is important because of the planning aspect. Someone who has $1 million to produce income is going to require different planning than the person who has $100,000. More on this a little later. The second part is to determine when they want to start income. Performing an Income Rider Comparison (available from your GPALM Annuity Consultant or our web site) helps the client to
see the effects of waiting to start income and also helps you as their advisor to find the product that fits perfectly. Not all income riders are created equal, and there are some major differences as to how it affects income down the road, as this chart shows. TABLE #1 shows the range of income for a 60 year old client with $100,000 and showing the minimum guaranteed income generated. There are four different carriers represented in the “Greatest Income” column and another 4 in the “Lowest Income” column. The riders that generate the greatest
TABLE #1 YEARS DEFERRED
AGE
GREATEST INCOME
LOWEST INCOME
DIFFERENCE
0
60
$5,850
$4,500
23%
5
65
$8,415
$5,500
35%
10
70
$14,249
$6,050
58%
15
75
$20,936
$6,050
71%
20
80
$35,889
$6,600
82%
JUST the FACTS | 3RD QUARTER 2011
shows the difference between the single Income Rider scenario and using a laddered annuity approach for a 60 year old with $1,000,000. As you can see, laddering produces a higher income level than using a single annuity, charges the client significantly less in fees, and makes it easier to pass suitability scrutiny. There are many more benefits to the laddering approach that I am not covering here, but these are the main points. GUARANTEED MINIMUM DEATH BENEFIT RIDERS– LIFE INSURANCE SHORTCUT The newest addition to the FIA rider family is Guaranteed Minimum Death Benefit Riders that have recently hit the annuity market. Originally, the GMDB was established to provide beneficiaries a death benefit equal to the greater of the amount invested or the most recent account value prior to income benefits being received. Now, the beneficiaries are able to take the Death Benefit Value over 5 years as a death benefit if they choose. (Continued on Page 8) PAGE 7
WHAT IS THE BEST ANNUITY?
Continued from page (7) Let’s take a look at this from the beneficiaries stand point. Your parent has passed away and you find that they purchased one of these Death Benefit Riders 10 years earlier for $100,000. The annuity itself has performed at a modest 3.00% on average. The annuity company gives you the following options: • Option 1: Receive a lump sum of $134,392 • Option 2: Receive 5 payments of $32,578 annually Which option would you choose? In my experience, most beneficiaries would choose Option number 1. The reason for this is the differential between the Account Value and the Death Benefit Value. The greater the Account Value performs, the less value the Death Benefit Value has. Therefore, in having your client purchase this rider, you are saying that the annuity is not likely to perform at the rate of the Death Benefit rider, typically 5%. So what do you do if your client has money they wish to maximize to leave to their beneficiaries? In most cases, there is no cheaper way to generate a death benefit than having your client purchase life insurance. Table #3 lists different death benefit options for a male, age 70, standard health rating, with $100,000 Non-Qualified:
TABLE #2 SINGLE INCOME RIDER APPROACH
LADDERED APPROACH
INCOME GENERATED
$58,500/YEAR
$62,252/YEAR
INITIAL FEES CHARGED (50-100 BPS)
$5,000-$10,000
$1,375-$2,740
As you can see, the Death Benefit Rider does not even come close to comparing with the Death Benefit provided using the Annuity/Life Arbitrage concept. However, there are some benefits to the Death Benefit Riders, especially for those who no longer can qualify for Life Insurance, or Life Insurance is just too expensive. But for those clients who are in better health, the extra effort of going through underwriting can provide a substantial benefit for them. Plus, if your client structures this correctly, not only would it be income tax free, but possibly estate tax free as well. CONCLUSION: Solution based planning is not a new concept, but seems to give way to simple solutions. Sometimes taking the extra steps can produce a better result for the client, and for you. Not only does this produce a very loyal and happy client, but their friends and colleagues end up hearing a lot more about you than they would by giving them a one product solution. Showing them that you worked diligently to find
the best solution for their needs instills confidence and that you take their planning seriously. Your GPALM Annuity Marketing Advisor can help you determine the best solution for your clients and their income planning needs. Our IncomePLUS presentation shows clients how they can generate reliable lifetime income and helped advisors provide better planning and close more sales. Call us at 800-710-1115 for more information.
BRAD ALLEN ANNUITY MARKETING CONSULTANT
TABLE #3 DEATH BENEFIT RIDER
TRADITIONAL ANNUITY/LIFE ARBITRAGE
ENHANCED ANNUITY/LIFE ARBITRAGE
IMMEDIATE DB
$100,000
$242,736
$297,154
DB @ LIFE EXPECT.
$45,840 FOR 5 YEARS
$242,736
$232,372
GAINS ARE TAXABLE AT DEATH
TAXABLE PORTION WHILE ALIVE, DB IS INCOME TAX FREE
TAXABLE PORTION WHILE ALIVE, DB IS INCOME TAX FREE
INCOME TAX CONSEQUENCES
PAGE 8
JUST the FACTS | 3RD QUARTER 2011
Don’t be an annuity “product peddler”! Introducing a concept that helps you become the trusted advisor…
If you are interested in showing clients and prospects how YOU can help them create reliable retirement income, preserve their assets and leave a legacy, call your GPALM Annuity Advisor today. Our contracted producers now have access to a presentation system that helps clients diversify their retirement savings, offers flexibility for changing economic conditions, and gives them strategies to meet their dreams, desires and goals!
(800) 710-1115
Call us if you want to increase your income! JUST the FACTS | 3RD QUARTER 2011
PAGE 9
Use Market-Linked CDs to Enhance Annuity Sales “It’s tough out there”... This comment is one we hear from some advisors whom have historically enjoyed annuity sales success with CD owners. If you have been frustrated by CD owner prospects reacting with a “deer in the headlights” mentality to your stellar annuity presentation, consider moving the conversation to your unique CD offering, Marketlinked CDs. “If you can’t beat them, join them”! Great Plains is offering access to this product to give you another opportunity to set yourself apart from competitors and open doors to more prospects. Like our After Market Assignments offering returns of 5.00% to 6.75% from highly rated carriers, Market-linked CDs can give you the opportunity to have a conversation with prospects who default to CDs, a product they are comfortable with even in today’s incredibly low rate environment. We believe this product will result in more annuity sales. Advisors can now engage a prospect enamored with the mentality of “FDIC insured”, or “I’ve owned CDs for years” with a product offering closer to their comfort level. This is something new that many prospects have not heard about, which opens the door to a presentation offering the benefits of a fixed indexed annuity with the comfort of a CD. If your prospect is receptive, you can expand the conversation to educating them about the benefits of fixed and fixed indexed annuities. Here is a sample presentation to consider:
Yield: Purchase premiums are guaranteed to earn a set rate of interest for a specific time. Lifetime Income: If customers select a life income option, they will receive income for life. Estate Planning: The accumulated value of an annuity is paid directly to the beneficiary, without withdrawal charges, generally avoiding the expense, delay and frustration of probate. The “Y” in STYLE is also an important reason “why” you may want customers to consider a fixed annuity during times of declining interest rates. That’s because purchase premiums are guaranteed to earn the same “fixed” rate of interest for the specified period of time. Plus, fixed annuities offer customers a guaranteed minimum interest rate after their initial rate expires, regardless of market fluctuations. Call your GPALM Annuity Advisor today for a copy of the STYLE presentation and CD vs. Annuity Comparison.
Robb Edwards, Principal
“STYLE”: An Easy Way for You to Remember Annuity Benefits... Present annuity benefits to Certificate of Deposit prospects using the acronym “STYLE”. Here’s the breakdown of the “STYLE” presentation. Safety of Principal: The insurer guarantees the return of premium. Tax Deferral: Taxes on interest are not due until customers withdraw earnings. PAGE 10
JUST the FACTS | 3RD QUARTER 2011
GET YOUR SHARE OF THE CD MARKET!
GPALM EXCLUSIVE!
MARKET-LINKED CERTIFICATES OF DEPOSIT FDIC PROTECTION AND THE POTENTIAL FOR HIGHER RETURNS THAN TRADITIONAL CDS If you are not talking to your clients about this principal-protected product, somebody else will! • In 2010 over $25 Billion of MLCDs were purchased by retail clients. • MLCDs offer the same protection and safety of traditional “fixed” CDs with the potential to earn above market interest. Contact your Great Plains Annuity Advisor today for more information and your Agent Appointment Agreement (AAA)!
800 710-1115
www.greatplainsannuity.com JUST the FACTS | 3RD QUARTER 2011
PAGE 11
WHAT’S HOT AT G
Set yourself apart from your competition with the following presentatio generation tools from Great Plains Annuity & Life Marketing:
MARKET-LINKED CDS: Over $25 Billion of Market-Linked Certificates of Deposit were purchased by retail clients in 2010. If you are not talking to your clients about this principal-protected product, somebody else will! Market-Linked CDs offer the same protection and safety of traditional “fixed” CDs, with the potential to earn above market interest. Call GPALM for more information on this principal-protected, FDIC insured product now!
USE BOOK MARKETING TO GENERATE REFERRED LEADS! Are you uncomfortable asking for referrals? Learn how your existing clients will give you referrals using Financial Help Center’s revised book “What all stock & mutual fund investors should know!”. Call your GPALM Annuity Advisor for free marketing ideas to get your stream of quality referrals as well as new prospecting methods using FHC’s new Special Retirement Edition. call us today at 800-710-1115 or visit our website www.greatplainsannuity.com for details!
PAGE 12
INCOME PLUS:
Show your prospects how you can assist them in creating reliable retirement income and a flexible financial strategy for the future with our IncomePLUS presentation. Visit our web site for samples and access our Income Rider Comparison, then call your GPALM Annuity Advisor to create a custom presentation to help you become their trusted advisor! Successful producers today are more than just annuity “product peddlers”. GPALM’s IncomePLUS presentation will help you provide clients with better options and flexibility for their retirement assets while accomplishing suitability requirements painlessly. (See article on page 6)
JUST the FACTS | 3RD QUARTER 2011
GPALM?
ons, products, and lead
AFTER MARKET ANNUITIES: Turn High-Net-Worth Prospects into Clients! Take advantage of 5.00% to 6.50% rates guaranteed all years from A- to AAA Carriers to get in front of these prospects and help with their other annuity and life insurance needs. Call your GPALM Annuity Advisor for details...
SEPTEMBER IS LIFE INSURANCE AWARENESS MONTH A recent LIMRA study found that 30 percent of households (35 million) have no life insurance coverage. Today there are 11 million fewer American households covered by life insurance compared with just six years ago. Visit: www.lifehappens.org/liam-information for-producers/ for ideas and resources to promote the benefits of life insurance for your clients.
Life Insurance for... Seniors Many of you already work in the age 65 plus market selling annuities and Medicare supplement plans. This means you can already begin to increase your income by $50,000 or more by asking a couple of simple questions to your: • existing clients • future appointments with new senior prospects.
Learn more about their needs and the tools we can give to you for... • passing more of their assets to their heirs income tax free • alleviating their concerns on the high costs of long term care expenses • providing final expense insurance with no medical exams • provide possible solutions to existing life plans that are in danger of lapsing
JUST the FACTS | 3RD QUARTER 2011
The Middle Market—Prospects age 25 to 65, and tend to look for three things: • A very streamlined process. No required exams or labs are a real plus. • Being educated on products that best fit their wallets as well as their family situation • An Agent who establishes competency as well as one who they can trust
What Life plans are available that require no exams or labs? • Up to $350,000 of Term insurance through age 65. Length of plans are determined by current age. • Up to $250,000 of Universal Life or Whole Life through age 65. Add riders for Critical, Chronic and Terminal Illness. • Single premium products Call Dick Reynolds, CLU for details: (800) 710-1115
PAGE 13
Become the Big Fish in Your Small Market! We have two questions for you:
• Seminars
1. Are you missing steady sales and commissions because you think there’s not enough opportunity in your small market?
• Direct Mail
2. Would you like to be the BIG fish in your small market?
• Custom Marketing
• Telemarketing
We believe small markets can produce big results. That’s why GPALM has created a turn-key marketing system for annuity and life producers that find themselves serving smaller markets like rural America. Sound interesting? Invest a few moments to see if we can help you unlock the potential benefits in serving smaller communities. We can help you become a big fish! PAGE 14
JUST the FACTS | 3RD QUARTER 2011
Small Market Seminars — Doing seminars in rural areas where there are fewer prospects has been a subject of much discussion. They are feasible and can be very productive. After producing thousands of seminars for agents everywhere in America in virtually every state, I have learned of some very unique characteristics about different market areas. The agents in high concentration areas where there are a large number of prospects complain about competition and the frequency of seminars in their area. In low concentration areas the agents complain about fewer prospects. But they have less competition. So the bottom line is that there is plenty of opportunity everywhere if you know how to dig it up. In small markets, you can still do seminars. Whereas, I may be able to present multiple seminars in one month in Jacksonville, Florida, in a more rural setting you may do them less frequently, maybe once every three months in one area. Smaller Mailings At www.presentyourpractice.com, we can mail less than 5000 pieces so that smaller markets can be serviced. Move around You may want to take in other areas. We have agents in rural markets who travel to other areas to market and do business. Of course, in small markets where travel is necessary you will have to see the prospects in their homes. But, for most rural agents, they are very comfortable with home visits. Appointment settings It will be necessary to experiment with different appointment setting techniques. I always set appointments at the seminar and encourage others to do the same. Setting the appointments at the seminar helps to consolidate appointments. Demographics Start with what you do. When agents ask me whom they should mail the cards to, I always ask who their clients are. What are the demographics of the clients they already do business with? Take an inventory. If you want to change markets, working with products and concepts that are new to you, be careful how you spend your money. You will go through a learning curve in presenting, appointment setting, client presentations, closing, application of concepts, product selection and customer service. If you already do these things well with your current clients, then market to those demographics. My personal choice is to market to 58-70 year old prospects that are probably already retired or JUST the FACTS | 3RD QUARTER 2011
are making decisions about retirement. These folks have been the best annuity and life insurance prospects for my practice, Small markets can be reached with seminars. By being careful with the details you can be very successful. Let’s look at some numbers. Of course, these numbers aren’t perfect but I have found the percentages to be quite accurate depending on the agent’s experience and skills. A 3000-piece mailing should get around a .8% response or 24 people. Out of 24 people you should have about 16 buying units or households represented. If you get 30% kept appointments and sell to 50%, that’s two sales per mailing on average. Your costs will be below $3,000.00 with over $14,000 in commissions, netting over $11,000 per mailing. Once per month will net you over six figures on just $2,000,000 of annuity premium. As your skills increase so will the size and quality of your sales. Let’s serve those underserved small markets! Kim Magdalein Kim Magdalein has presented to over 1,000 audiences in the last 10 years resulting in over $150,000,000 of annuity production averaging $150,000 per presentation. His marketing company presentyourpractice. com has produced thousands of seminars for other producers nationwide producing over $2.5 Billion in annuity premium. Kim has written a monthly article for Life Insurance Selling magazine for 2 years.
PAGE 15
Go Fish’n with Rich! I’m excited to announce the first contest of what we hope will become a new series of travel incentives available from Great Plains Annuity and Life Marketing. My goal is to offer producers working with GPALM a unique experience that will become the memory of a lifetime for those that qualify. Many of our carriers reward consistent production with travel incentives for the writing agent. Our GPALM Marketing Advisors are delighted when they see a producer they assist rewarded with one of these incentive trips. We want to help you maximize your production and help each and every producer qualify when such a trip is one of their goals. Our inaugural program is centered on one of my passions, sports fishing. In working with many of you over the years, I know a significant number of our producers enjoy the sport as well. Please note that if this first offering is not on your bucket list, we are also working on other “trips of a lifetime” and will be surveying all our writing agents for ideas and suggestions for future experiences. I know Robb is pushing for a golf trip that qualifiers would never forget, and other contests we are discussing include attending championship sporting events or unique venues not offered with the other
PAGE 16
programs available. Be sure and let your GPALM Marketing Advisor know of your passions so we can make this program special going forward. If you love to fish, our first offering will be in your wheelhouse! We are offering a Canadian Fishing Experience that will be second to none! The contest period will run from September 15, 2011 to December 31, 2012 and will be conducted in a fishing tournament format. We will schedule the trip during prime fishing up North, and the accommodations and amenities will exceed your expectations. We intend to have fun helping GPALM’s interested producers compete to win one of a limited number of seats for this trip. Let your GPALM Marketing Advisor know if you would like to register for this exceptional contest. We will be running special promotions during the qualification period, and I guarantee that if you love to fish, you’ll want to join us.
JUST the FACTS | 3RD QUARTER 2011
LIFE / ANNUITY ARBITRAGE The best concepts are the ones that have been around for a long time. This tends to lend credibility to the concept, standing up to the test of time. Life-Annuity Arbitrage is not brand new by any means, but is a concept that most forget is in their repertoire. We have developed a one page presentation to help explain the concept to your client. return for your client, better if they are healthy! The Life-Annuity Arbitrage is a versatile concept This is significantly higher than what they that can be used in many different scenarios. could expect at the bank, or even a Multi-Year Substituting interest guarantee Annuity. only income from a CD or Fixed Annuity, Life/Annuity Arbitrage Another use for the Arbitrage is to maximizing $1,000,000 maximize the amount of money left to the the amount of money beneficiaries. For example, a client has left to beneficiaries money set aside that they are not wanting from a stale asset, or to touch, just grow as much as possible to efficiently funding for leave to their kids. You can take estate planning needs. all of the money generated Knowing where and by the SPIA to maximize Life/Annuity when to apply this Arbitrage the death benefit, and concept is where $1,000,000 making it an Income Tax we excel! free death benefit as well! The basic Arbitrage is There are many scenarios where you put a lump where this concept can add sum of cash into a life value to an overall plan. To only Single Premium Immediate learn how this can benefit Annuity, purchase a Life Insurance your clients and boost the policy to replace the initial lump value of their financial plan, sum at death, using the payments call your advisor at Great from the SPIA to pay the premiums Plains today! for the Life Insurance and provide a lifetime income for your client. In today’s low interest rate environment, you can expect the equivalent of between 5-6% rate of Valued Client, Age 70, Male
$400,000 Purchase Life Only SPIA
$600,000 Purchase Life Only SPIA
Generates $34,000 per year
Generates $4,310 per month
Purchases a $1,000,000 Life Insurance Policy
$4,310 per month Income Guaranteed for Rest of Life
$51,720 per year Income guaranteed for life with original principal paid to beneficiaries income tax free. This is equivalent to a 5.17% Rate of Return!
Valued Client,
Age 70, Male
$1,000,000 Purchase Life Only SPIA
Generates $85,600 per year
Purchases a $2,550,000 Life Insurance Policy
Maximize the This is equival Amount going to your Ben ent to earnin eficiaries. g 6.91% every year at age 85!
PAGE 18
JUST the FACTS | 3RD QUARTER 2011
GIVE YOUR CLIENTS GOOD-NIGHT-SLEEP INSURANCE!
UPSIDE POTENTIAL, with NO MARKET DOWNSIDE!
MarketValue Index® A Client-Friendly Index Annuity from EquiTrust Life Insurance Company® • Income For Life Rider Available • Full Account Value at Death – No Annuitization Required • 6 Competitive Crediting Strategies Available • Only One Moving Part Per Strategy! • Nursing Home Waiver for ALL issue ages**
6.50% MGA COMMISSION!*
10-YEAR DESIGN!
• 0-80 No Commission Reduction
Call Great Plains Now for Annuity Sleep Insurance!
800-710-1115
*Commissions may vary by state. **Nursing Home Waiver not available in MA. Surrender of the contract may be subject to surrender charge or market value adjustment. Product and Rider not available in all states, and may vary by state. Contracts issued on Form Series ET-EIA-2000(02-05) with Rider ET-IMVA(07-09). Group Certificates issued on Form Series ET-EIA-2000C(01-07) with Rider ET-IMVAC(07-09). EquiTrust Life Insurance Company, West Des Moines, IA. For Producer Use Only. AC11-ET-EIA-1074
JUST the FACTS | 3RD QUARTER 2011
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Real life cases with a twist in planning! Case #1 A 70 year old female who owns an income producing farm valued at approximately $2million. She has 2 sons, one who works the farm and will eventually own it and another who is in sales in another industry altogether. Both are in their early forties. Her concern is she will not be leaving any other appreciable assets to this second son. It was agreed upon that the logical solution was to purchase life insurance on the Mother’s life for $2million to equalize the assets for each son. However, the annual premium to accomplish the plan was $51,000 and way too high to commit to. So instead of purchasing this $2million policy, I recommended the following approach on a life plan which was ultimately put in force: • Through the use of an income protection rider, we structured the death benefit to be paid out in annual increments of $66,667 for 30 years. This meant that only $1.2million needed to be applied for which lowered the annual premium from $51,000 to $31,000. A savings of $20,000! • As an option in the event (1) the Mother lives a long life and is no longer managing the farm or (2) the farm is sold or (3) the son not working the farm who has received nothing and is getting up in age, the original death benefit of $1.2million can be requested to be paid in a lump-sum. Case #2 Male age 45 just went through a divorce. As with most divorces where young children are involved, the divorce decree stipulates that the husband (and in some cases the wife) maintain life insurance for some period of years with their ex spouse as primary beneficiary. As well, most times a term policy is purchased for the needed amount. In this case the husband’s concerns with buying a $600,000 policy were as follows: • He felt that if he were to die in the next 10 or so years much of the $600,000 would be spent frivolously by his Ex and her boyfriend or husband and not just for his children’s expenses or future. • He also did not like plowing money into a term policy for many years and have nothing to show for it since he wasn’t likely to die that early.
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Typical with required life insurance in a divorce decree is that an amount is stipulated but there is no language that says the entire amount must be paid in one lump-sum nor all of it directly to the Ex Spouse. By using a trust to make payments to the ex spouse until the children reach ages 21 and then all balances to the children, we looked at the following 3 choices at Preferred non-smoker rates — 1. A $600,000 20 year term policy at $77.00 per month 2. A $600,000 UL policy for $350.00 per month 3. Client bought a $426,000 UL policy for $250.00 per month that pays the $600,000 over 20 years. • Divorce decree was satisfied • UL premium was lowered by $100 per month using the income protection rider • Once the children are 21 the annual payments go directly to them • Client had a policy he could keep the rest of his life and even add a new wife as beneficiary if he were to get remarried. All life insurance death benefits do not need to be paid in one lump sum. Offer your clients some alternative planning that will make sense to them. To discuss your life cases, contact Dick Reynolds, CLU (800) 710-1115 or dick@gpam.biz
Dick Reynolds, CLU
With over 30 years of life insurance experience, Dick not only provides product, medical underwriting and advanced sales expertise on life cases, but helps agents find the right solutions for their client’s particular circumstances by thinking outside the box.
Just a Thought... What’s Your Attitude about Your Existing Clients? “I have all of my client’s Money” is a dangerous assumption for an insurance advisor to make. USA TODAY reports it takes 40 times the money and effort to acquire a new client versus keeping a current one. Profitable businesses are not built on simply attracting new customers. Every business depends on repeat business – even your financial services or insurance practice. If it is smart business to keep your existing customers coming back for more, it stands to reason it is not smart to ignore them in favor of finding new clients. If I ask how much of your sales volume comes from current clients and you respond “very little”, you have given me the wrong answer. This is a warning signal that you are not doing something right. And if you think you have all their money or they can’t afford anything else, you are buying into a lie. Change this belief and you’re on your way to increasing your production exponentially. To double your current production, do the following.
The easiest and most effective way to grow your business is to do annual client reviews, and create fun and educational opportunities to meet with your clients and their friends.
1. Change your attitude about your existing clients!
Remember, anything will work if you do.
2. Implement annual client reviews, do a thorough fact-finding, and give stellar customer service to your clients.
Don’t miss opportunity because it is dressed in overalls and looks like work.
Four things to remember • No matter how good you are you aren’t going to get all your clients business on the first sale. There’s always more business to write.
Andy Amborn, Annuity Specialist
• Someone else is always trying to sell your clients and replace your business. • Your customer is not your client until they’ve bought at least three times. The more they buy the more loyal they become, and the more they buy the more often they will refer others to you. • Peoples situation change, jobs, children, marriage, divorce, homes, attitudes and concerns. All these add up to more sales opportunities, and the only way you’ll know about these opportunities is to stay in touch. PAGE 22
JUST the FACTS | 3RD QUARTER 2011
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Call your GPALM Marketing Advisor or Robb Edwards at: 800.710.1115
JUST the FACTS | 3RD QUARTER 2011
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Who’s pulling the strings at your current Marketing Organization? Great Plains Annuity & Life Marketing is proud to be 100% Independently Owned. We are here to help you find the best annuity and life insurance solutions for both you and your client. We offer you more than 60 insurance carriers to ensure you have access to what you need, when you need it.
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