4TH QUARTER 2012
Introducing a revolutionary lead generation tool exclusively for Great Plains Producers! (See page 6)
800.710.1115
www.greatplainsannuity.com
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800.710.1115
www.greatplainsannuity.com JUST the FACTS | 3RD QUARTER 2012
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INSIDE 6
THINK OUTSIDE THE BOX
Today’s rate environment is making annuity sales increasingly difficult. Help clients overcome low interest rate concerns with solutions that address their biggest financial fears in retirement. Your ability to ask the right questions and listen to their needs positions you as a trusted resource rather than another product peddler.
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BECOME AN ANNUITY HELP CENTER
Great Plains is launching an exciting new lead generation tool designed to give you instant credibility and the opportunity to create your own internet leads. Read this article and lay the groundwork to better serve your clients, painless referrals and more sales. Great Plains will be offering a host of additional benefits and resources for our producers that enroll in this lead generation program.
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SOCIAL SECURITY INCOME PLANNING
DOES YOUR GLWB RIDER MULTI-TASK?
In today’s fixed annuity market, there are over 300 fixed annuity products and over 70 insurance companies offering some variation of product/rider combination. How does a consumer even begin to know what is best when agents themselves are trying to understand nuances of so many products?
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POLICY REVIEWS CREATE SIGNIFICANT LIFE SALES OPPORTUNITIES
Various industry sources cite the number of Orphan Policyholders may be as high as 50%! Knowing the right questions to ask can create an appreciative new client and sales for you.
JUST the FACTS | 4TH QUARTER 2012
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• Rich Hellerich • Robb Edwards
ANNUITY MARKETING • Brad Allen • Brian Dixon • Carlos Rojas • Cindy Nelson • Jane Plumberg • Kara Jones • Scott Andrew
• Dick Reynolds, CLU • Jeff Bregovy
ADMINISTRATION • Cris Larson • Christine Moore • Kathy Putnam • Mackenzie Oakley • Naomi Mayekawa
LIFE INSURANCE: A PERSPECTIVE ON THE INDUSTRY
Dick Reynolds, CLU, reviews some of the current challenges in the Life industry that will create opportunity and change in the coming months. Be informed on these important issues that can impact your life sales in the coming months.
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PRINCIPALS
LIFE MARKETING
Social Security benefit planning is a hot topic in today’s retirement arena. Clients are looking for education and assistance in determining the best time to trigger benefits and understand what happens when one spouse passes away. Learn how our IncomePLUS presentation can help you highlight Social Security benefits and opportunities for more sales.
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4TH QUARTER 2012
10901 W 84th Terrace., Ste. 125 Lenexa, KS 66214 Toll Free: 800-710-1115 Local: 913-492-9994 • Fax: 913-492-9998 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.
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JUST the FACTS Improve your sales prospects by staying in front of your prospects! I think most producers will agree that 2012 has been a challenging year. In the past year, our Just the Facts magazine has covered items such as increased suitability requirements, the introduction of many new products and riders, the low interest rate environment, and lead generation, just to name a few. Our staff is well equipped to help you with all aspects of the actual sale, issue and commission payment for your annuity and life cases – from helping find the best product solutions to shepherding your business through the home office suitability and administrative maze to confirming your commission check hit your EFT account. That said I’m still amazed after nearly 30 years in the financial services industry that seemingly successful agents constantly worry about generating leads and appointments. Growing up on a farm, I cannot remember ever hearing a farmer complain about a crop that he never planted. I also know that when conditions or market prices dictated a change in plans, successful farmers were willing to adapt to the circumstances in hopes of showing a profit. While certain things, like the weather, were beyond their control they still put the groundwork for success in place. How serious are you when it comes to your lead generation efforts? Do you have a marketing plan and budget? Do all your leads come from one source or method, or do you take advantage of several? I work with a number of producers that depend on seminar marketing. Several are ready to abandon seminar marketing altogether because their results have declined over the past year. Their focus is on the prospects that actually show up at the seminar and book appointments, AND THOSE PROSPECTS ONLY. PAGE 4
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Rich Hellerich, Principal
But what about those reservations that failed to show up? And what about the demographics of the list you paid for and mailed? Is that seminar the only way to book an appointment? Gee, I wonder if there are other ways to generate appointments using this information. Most of you know my passion for fishing, so here is my analogy of fishing to lead generation. While I love going after a trophy bass with my rod and reel, I’ll sometimes set a trotline while I’m fishing. A trotline is a heavy fishing line with baited hooks attached at intervals by means of branch lines called snoods. Set across the width of a river or stream, I have a greater chance of catching because of my multiple lines in the water. Your lead generation efforts should also include MULTIPLE lead generation tools. Great Plains is launching a new lead generation tool with our exclusive Annuity Help Center. While I’m not the most technical guy in the room, I made it clear that this tool had to be more than just an “electronic business card”. Annuity and life producers contracted through GPALM that create a custom lead generation web site using our exclusive Annuity Help Center tool will automatically become members of the Annuity Help Center User Group. These members will have access to additional methods of lead generation and branding themselves for success in today’s marketplace. Contact your GPALM sales specialist today for details on how we can help you create a lead generation and marketing program designed just for you. We will have ongoing education, implementation and support for a variety of lead generation programs.
JUST the FACTS | 4TH QUARTER 2012
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ELIMINATE
THE UNCERTAINTY! BE READY WHEN YOUR CLIENT NEEDS YOU.
Current economic instability, coupled with changing life circumstances, can create the need for clients to re-evaluate their financial situation. There are many reasons why clients might choose to sell their existing single premium immediate annuity income streams or annuitized annuities. Some inherit these policies and find they would rather have a lump sum than monthly payments. For others needs change requiring a different type of insurance/investment product. Some choose to change their investment or estate planning strategy, while still others find that their original decision to buy the SPIA no longer applies. With the money received, clients pay off debt, start new businesses, pay for school, buy homes or save their existing home from foreclosure. They have the freedom to apply their existing financial resources to best serve their family and changing circumstances.
CONVERT ANNUITY INCOME STREAMS TO CASH Learn how you can be ready to assist clients and prospects if changing financial circumstances force them to seek a lumpsum payment for an existing single premium immediate annuity or annuitized annuity. JUST the FACTS | 4TH QUARTER 2012
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800.710.1115
www.greatplainsannuity.com PAGE 5
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On your next sale,
think outside the box. In today’s financial environment, creating annuity sales can be difficult. Clients, reluctant to consider lower interest rate products, think and hope the market will recover, so why tie up my premium? The problem is many Wall Street “talking heads” believe that market recovery will not be an overnight fix, but rather a 4-6 year turnaround or longer. Suggesting this scenario to the client who always seems to know something you don’t may be difficult … which brings me back to my opening statement: creating sales in this environment can be difficult. Why is it difficult? Are you acting in, and proposing solutions that are in the best interest of the client? Based on my conversations with agents across the country, I’m becoming more convinced that many have become more order takers than financial consultants. I mean no disrespect, but I frequently see producers taking the path of least resistance to make a sale. The client(s) tell the agent what they want, and the agent completes the order. This results in a quick sale, and the client gets what he asked for, but was that product what he really needed? Did the agent fail to see additional needs (and sales opportunities) for lack of asking a few additional questions? Here’s an example: Client asks the agent, “What’s your best five-year fixed rate?” Agent replies, “3%.” Client says “O.K.,” deal is closed and agent walks away with a 2-3% commission and starts looking for their next transaction. Asking a few more questions might have not only put the client in a better position, but also provided extra income for the agent. Wouldn’t you rather ask “why”, than ask “would you like fries with that?” Asking a simple question of “why?” creates a dialogue between client and agent, and that conversation can reveal their true intentions and concerns. The client states he wants a fixed annuity to grow his money, but during the interview he shares the he hopes to pass this assets to his heirs and worries that he may need access to the funds for potential health care issues later in life. Learning this, you now have additional solutions for your client to consider. You know you have access to an annuity that offers a chronic care benefit to help cover any type of facility costs and ease the financial and physical burden on their children for extra care. This product also includes an enhanced death benefit in case you do not use the LTC benefit. This solution effectively addresses the
client’s real concerns, and the agent is now perceived as an advocate and advisor rather than an order-taker. Deal closed, and our agent walks away with an additional 4% commission with a happy client. What is another option available if that same client wanted to simply grow the money for their beneficiaries, and does not need to touch it? How about asking 12 knock-out questions to determine if the premium could be placed in a Single Premium Life product? If the prospect qualifies, this presents a solution that may outperform any annuity in the market in terms of return, and maximize their legacy to their beneficiaries. The client receives a better result than what they asked for, the agent earns an additional 6% to10% in commission, and everybody is happy. Asking these additional questions can put to rest potential suitability concerns that might come up. If your client purchased a fixed annuity, and suddenly becomes incapacitated, the additional funds to cover the cost of chronic care are not available. Long term care is more a reality than clients want to agree with. You do not want to be answering questions from the client’s family regarding why their parent(s) do not have any coverage in place to cover these escalating costs, and why you as the advisor did not address this need. That is one conversation no one wants to have. Thinking outside the box can not only help your clients, it can help your practice grow and gain more referrals by providing what the client needs, not what they think they want. Your Great Plains Annuity and Life Marketing Specialist offers you the tools, the questions, and the products to help you protect your clients’ financial goals and position you as their advocate and trusted advisor. Call us today to see how we can help take your practice to the next level.
Scott Andrew Annuity Specialist Scott@gpam.biz
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The Magic of 6.67
Do you know clients or prospects with existing Guaranteed Lifetime Withdrawal Benefits? Many people fail to recognize the financial disaster that could result from a chronic health issue or their need for nursing home care. Some may consider traditional product solutions too expensive, or decide to “self-insure�, not fully appreciating the impact of associated costs and higher income needed if a healthcare event occurs. These expenses could impact their other financial assets, radically changing their hope for a comfortable and secure retirement. Could you present a sales concept that offered your prospect the opportunity to multiply their current GLWB by 3, 4, or 5 times its present value for five years in the event of a nursing home confinement need?
Call now for details and learn how you can magically grow your commission income by 20%, 30% or more before the end of this year!
800.710.1115
www.greatplainsannuity.com JUST the FACTS | 4TH QUARTER 2012
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Great Plains Annuity and Life Marketing (GPALM) is launching a new lead generation program called Annuity Help Center. We have executed an agreement with Bruce Sankin, the owner of Financial Help Centers for the rights to offer this unique marketing tool to GPALM producers exclusively. Mr. Sankin is a consumer advocate and has been interviewed by Money Magazine and The Wall Street Journal and also appeared on national television networks such as NBC and CNBC. He is the author of “What all stock & mutual fund investors should know! – Special Retirement Edition”. Annuity Help Center is best described as an “annuity lead generation tool disguised as a web site”. This marketing tool offers you the opportunity to build your own custom web site, branded to you and your agency, in just a few minutes online using the internet. It positions you as the expert resource for consumers looking for information and education on annuities and retirement income planning. THE PROBLEM: Most agents understand the importance of having a web site branded to their practice, even if it is little more than an “electronic business card”. In today’s internet world, where millions of consumers research retirement information daily, you must have a web site for credibility if nothing else. Producers often express frustration with the expense and time involvement in having a web site, their lack of expertise in this area, and poor results in building meaningful contact with clients and prospects using this medium. They don’t feel their web site is contributing what it should to their overall marketing program in terms of building their credibility, and the lack of a “call to action” leaves them wondering if the web site is accomplishing any marketing purpose. PAGE 8
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The GPALM alternative: ANNUITY HELP CENTER More than just a web site, Annuity Help Center will become your complete lead generation and marketing system. GPALM’s vision for Annuity Help Center members is to provide the following: • Your own web site, branded to you, which can be built in a matter of minutes online. • Your initial lead generation effort reaching out to existing clients offering valuable consumer education to create a “painless” stream of referrals. • A cost-effective solution for web site marketing that also positions you as an annuity resource and creates more appointment opportunities. • Additional content in the future to ensure you are offering more tools and resources to help clients and prospects looking to protect and preserve their financial assets. • Membership in our exclusive Annuity Help Center User Group for best practices, education, and access to other lead generation activities such as seminars and direct mail, as well as discounted special offers, branding, marketing and advertising ideas and programs. We want Annuity Help Center to not only grow your bottom line, but give you the tools to create and achieve your vision for your business. (Continued on page 10) JUST the FACTS | 4TH QUARTER 2012
10/19/2012 9:37:17 AM
Introducing a new lead generation tool disguised as a web site available exclusively from Great Plains Annuity & Life Marketing!
Become the Annuity Expert and the trusted resource to your clients and prospects with this top level annuity domain name and your own custom website! Your Name and Agency displayed here to brand you! You do not have to be computer-literate to create your entire Annuity Help Center website, branded completely to you, in 10 minutes (or less) online. Easy to use! You become an automatic member of our Annuity Help Center User Group with access to additional training, best practices, webinars and other lead generation tools!
If you don’t currently have a web site, you know you need one in today’s electronic-media world. If you do have a web site, you may be frustrated by your costs and time involvement necessary for a site that amounts to nothing more than an “electronic business card”. Great Plains has completed negotiations for exclusive rights to a new lead generation tool that is both cost-effective and designed to generate leads and appointments, not headaches.
Upload your logo or use the Annuity Help Center Logo Give away unlimited copies of this valuable consumer education e-book, “What all stock and mutual fund investors should know” by consumer advocate Bruce Sankin, and receive im-mediate notification when requested at your website. Give clients and prospects hard-copy books to create referrals and appointments. Excellent giveaway for client appreciation events and seminars! Ridiculously low cost for this easy-to-use referral and web lead marketing system!
ability to also generate prospects from the internet and painless referrals from existing clients by providing information and education. All it takes is your ability to consistently apply the marketing practices for Annuity Help Center lead generation into your current practice and pro-mote your new web site. If you have an existing web site you can still take full advantage of the system. Call your Annuity Marketing Specialist now for more information.
Annuity Help Center works seamlessly with your existing lead and marketing programs, and offers the
800.710.1115
www.greatplainsannuity.com JUST the FACTS | 4TH QUARTER 2012
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BECOME AN ANNUITY HELP CENTER
(CONTINUED FROM PAGE 8)
We have designed the Annuity Help Center web site to give it a contemporary look and with a unique ‘call-to-action’ to create response. This ‘call-to-action’ is the offer of a free online edition of Mr. Sankin’s book, “What all stock & mutual fund investors should know! – Special Retirement Edition”. When a prospect requests the book, you are notified via email of their interest. When you follow up with them, you can offer a hardcopy edition in return for setting an appointment to meet, or reply with a web site link to allow them to download the book. The offer of this book positions you as an educator, an expert resource that consumers can use to learn how you can help them achieve their retirement dreams, desires and goals. Another effective and proven use of the book is to offer copies to existing clients. For example, you give the paperback version of the book as a “thank you” to clients during their annual review, or offer the paperback edition in a holiday message thanking them for their business (see our special introductory offer on the next page). In your communication, you simply let your clients know that you would be happy to forward additional copies of this valuable consumer education book to their friends and loved ones with their compliments. This one idea alone has resulted in agents enjoying up to 50% in referral response according to Mr. Sankin.
Again, Great Plains will help you with ongoing ideas, success stories and support to help you see more prospects, create more clients, and increase your commission income. Visit www.annuityhelpcenter.net for more information and create your custom web site, or our GPALM web site: www.greatplainsannuity.com for additional details on becoming a member of the Annuity Help Center User Group.
Other methods of generating leads are included in the marketing ideas that come with the system, such as giving the book out at seminars, when you deliver a policy, and more.
Our special introductory promotion is good until November 30, 2012. Don’t miss this opportunity to brand yourself as an Annuity Help Center at a ridiculously low cost!
The key to success with this program, as with any lead generation effort, is your persistent efforts to promote the web site and brand yourself as the expert resource for annuity education and information in your community.
Give your GPALM Annuity Marketing Specialist a call now to help you create your ANNUITY HELP CENTER today!
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JUST the FACTS | 4TH QUARTER 2012
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EVERY AGENT’S NIGHTMARE... I don’t know you. I don’t know your company. I don’t know what you offer and I couldn’t find your web site... now what did you want to sell me?
TAKE ADVANTAGE OF A NEW LEAD GENERATION SOLUTION AND BRANDING SYSTEM EXCLUSIVELY AVAILABLE FOR GREAT PLAINS PRODUCERS Your Annuity Help Center system comes with complete marketing guide and ongoing support from Great Plains. Annuity Help Center Members will also have access to other lead generation resources, tools, and vendors to create new clients and sales! Call for details on our Special Holiday Introductory Offer and how to create your own lead generation tool disguised as a web site in minutes! Discounts good for contracted producers until November 30, 2012... Act Now!
800.710.1115
www.greatplainsannuity.com JUST the FACTS | 4TH QUARTER 2012
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Visit www.your.annuityhelpcenter.com to view a sample web site and content. Your GPALM Marketing Consultant can assist contracted producers in creating their custom web site.
OFFER UNLIMITED COPIES OF THIS RETIREMENT PLANNING E-BOOK AT YOUR CUSTOM WEB SITE TO CREATE REFERRALS AND NEW PROSPECTS! PAGE 11
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WHAT’S HOT AT GPALM? MAKE YOUR HOLIDAYS MERRY! The feature article in the July issue of InsuranceNewsNet magazine focused on a new LIMRA Research Report exploring the various reasons people purchase deferred annuities. We strongly recommend you take the opportunity to read this study to better understand what motivates your clients and prospects and their ultimate decision to include annuities in their retirement plan. Contact your Great Plains Annuity Specialist to receive this report by email. Call 800-710-1115 now.
CREATE YOUR OWN INTERNET LEADS!
If you are contracted with Great Plains, you may qualify for access to a new and cost-effective lead generation tool—for more information visit...
www.annuityhelpcenter.net Using this program, you can: • Create a branded, custom web site in less than 20 minutes • Position yourself to prospects as the resource to assist them in assessing their retirement income and financial planning needs
STOP MISSING EASY SALES! If you work in the senior market, learn how to find a client’s “LEAVE BEHIND” money and earn up to 15%!!
• Grow your business without become a computer programmer, spending hours looking for content and updating your website • Receive instant e-mail notification when a prospect requests information or access to your material • Become a member of our Great Plains AHC User Group with access to additional lead generation programs, ideas and presentations
Ask for our Agents Guide to Senior Market Sales
Separate yourself from your competition while generating new leads and referrals. Call now!
Call 800-710-1115 and ask for the Great Plains Life Department
800-710-1115
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800.710.1115
www.greatplainsannuity.com
JUST the FACTS | 4TH QUARTER 2012
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“One Size Fits All” Retirement Income Solutions Don’t Suit Most Prospects... can help you research the industry’s leading annuity, life insurance and income rider solutions in a matter of minutes, reduce your planning, case development and suitability headaches. Instead of cramming your prospect’s unique financial objectives into a “one product” answer, show them your custom-built plan tailored to meet their personal needs and desires today, tomorrow and as a legacy for their loved ones.
IncomePLUS helps you do a better job of understanding the client’s total financial picture. This leads you to the opportunity in offering better financial solutions for reliable lifetime income, health and legacy issues.
Working with your GPALM Annuity Specialist and using our IncomePLUS client presentation, you can provide them with retirement income solutions designed to their specific situation and needs. We
Find out how we are helping producers help their clients and close more sales. Speak with a GPALM Annuity Specialist today.
800.710.1115
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JUST the FACTS | 4TH QUARTER 2012
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Social Security Income Planning... Social Security continues to be a hot topic among today’s pre-retirees and retirees. One of the hottest topics surrounding Social Security is helping clients determine the best time to trigger their SS benefits. There are many companies out there touting software that claims to make you the expert in this arena. Beware of taking liability for recommendations you are not qualified to offer. Great Plains is currently working on a solution that may give you the ability to refer clients to a true Social Security expert and CPA to help your clients consider several scenarios regarding their unique situation and when to trigger their social security. We hope to announce this option in the very near future, and set you apart from your competition, making you a valuable resource to those building their retirement roadmap. From there, we can help you present a custom retirement income plan incorporating social security benefits to provide for a comfortable, guaranteed retirement. Ask your GPALM Annuity Specialist for details and a sample of our IncomePLUS presentation. Social Security started paying out monthly benefits in January of 1940, and since this time has become a major source of income for retirees. How much someone can receive from Social Security depends on a JUST the FACTS | 4TH QUARTER 2012
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number of factors, including lifetime earnings and how old they are when they elect to receive benefits. Below is an example of a typical client’s benefit amounts:
Social Security benefits triggered
Monthly Benefit Amount
At age 62
$1,287.00
At age 67
$1,890.00
At age 70
$2,370.00
As you can see, the longer someone waits to trigger their benefit, the more income they will receive. The ideal situation is for someone to delay starting their benefits until at least age 67, but preferably until they are 70. But the reality is there are many clients who are unwilling, or unable, to wait this long to start receiving benefits. This creates a planning opportunity for you and your client to sit down and work together on a comprehensive lifetime income plan. The first step would be to do a cost comparison between several different options. (Continued on page 16) PAGE 15
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Social Security Income Planning
(Continued from page 15)
Option 1: Trigger Social Security at age 62 and make up the difference with a lifetime income rider. To produce an income of $603/month for the rest of their life will cost approximately $138,000. Option 2: Trigger Social Security at age 67, but start income immediately with a 5 year period certain SPIA. To produce an income of $1,890/month for the next 5 years will cost approximately $112,000. Option 3: Trigger Social Security at age 62 and make up the difference with a life-only SPIA. This will cost approximately $111,000 to produce the $603 for the rest of their life. The cheapest of these options is Option 3, using a Life Only SPIA. However, there are many pitfalls to using this approach, the main one being that if the client passes away too early, they forfeit their balance. The cheapest option and still protecting the remaining balance is to use a period-certain SPIA to cover the gap between when they want to retire and maximizing the benefit from Social Security. This is also true if they decide they would like the income amount for age 70, although it will cost a little bit more for them to accomplish this. Discussing these different options with your client can show that you are trying to maximize their retirement income while limiting their out of pocket expenses. Another way to build an income plan around Social Security is to provide your client with income insurance when one of the spouses passes away. When a spouse passes away, the surviving spouse is able to choose the higher of the two Social Security payments. However, expenses may only decrease a little when one spouse dies. This potentially leaves the surviving spouse trying to make up the difference in income from other sources. For example, Mr. Client, 72, is receiving $1,500 per month from Social Security and Mrs. Client, 70, is receiving $1,000 per month. If Mr. Client passes away at age 77, Mrs. Client will start to receive Mr. Client’s benefit of $1,500 per month, but she will lose her $1,000 per month benefit. To provide “insurance” for Mrs. Client in this situation is have her purchase an income rider to provide $1,000 per month at an estimated time in the future. It would cost her approximately $127,000 of premium today to provide $1,000/month 5 years down the road. For every year that Mr. Client lives past 77, they can withdraw PAGE 16
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a portion of the annuity to reduce the benefit, or let it ride and receive a higher income when he does pass away. If Mrs. Client passes away before Mr. Client, he can choose to accept the annuity payments on her behalf or cash in the annuity for a higher payout. Obviously, Social Security benefits should not be overlooked in the income planning process. Addressing this head-on, using our IncomePLUS presentation can help your clients maximize their benefits, protect them in the future, and position you as their ally and trusted advisor. Call your GPALM Annuity Specialist for details and a sample.
Brad Allen Annuity Marketing Consultant brad@gpam.biz
JUST the FACTS |4TH QUARTER 2012
10/19/2012 9:40:10 AM
OPPORTUNITY HAS ARRIVED... PACKING LIST:
Importa Careful nt! commiss ly open ion pack age with yo ur gpal m market ing speciali st!
“A” RATED A.M. BEST CARRIER 5-YEAR SURRENDER COMPETITIVE INTEREST RATES COMPETITIVE COMMISSIONS ON ALL PREMIUMS FOR LIFE AVAILABLE FOR QUALIFED MARKET: 403(b), ROTH, SEP AND IRA!
800.710.1115
www.greatplainsannuity.com JUST the FACTS | 4TH QUARTER 2012
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Does Your GLWB Rider Multi-Task? In today’s fixed annuity market, there are well over 300 fixed annuity products and over 70 insurance companies offering some variation of product/rider combination. How does a consumer even begin to know what is best when agents themselves are trying to understand nuances of so many products? The evolution of Fixed Index Annuities products has occurred rapidly since 2005 when Guaranteed Life Time Withdrawal Benefits (GLWB) also referred to as ‘income riders’ first emerged. Since that time, carriers have evolved their offerings to provide varying degrees of flexibility. Today’s consumers know that even the most solid planning is still susceptible to life’s unforeseen events. At the end of the day, your clients may have more than one single objective. Carriers understand the challenges clients may face in meeting future circumstances whatever they may be. In response, carriers have evolved their riders. While the number of available variations is overwhelming, the range of options creates a better ability to customize a plan for your client. Today’s ‘Income Riders’ can offer more than just income options. Today’s riders can offer protection against future chronic care expenses, death benefits, or even both. Hybrid riders with customizable benefits are expected to be on the marketplace as early as 2013. When premium dollars “multi-task”, purchasing additional benefits and protections, powerful sales opportunities are created for you. So how should you begin to incorporate some of these products into your repertoire and meet client PAGE 18
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objectives? Let’s take a look at one example where a client is able to incorporate a hybrid annuity rider with a more traditional fixed index annuity. Client, 65 year-old male currently has $500,000 in an annuity he purchased years ago. The renewal on the current annuity is not attractive and he JUST the FACTS | 4TH QUARTER 2012
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is seeking your assistance in getting something better than a 1% renewal rate. You know at the time of meeting that your client has at least two objectives: protect his principal and get a rate better than 1% on his money. During the meeting, you ask your client what his goals for his hard- earned money are. He explains that he plans to use his money to meet his future expenses and pass whatever is left to his heirs. He explains that he wants to use what he needs, but hopes that he can pass as much to his heirs as he can.
Through your fact finding you find your client has not planned for chronic care expenses that could arise. He mentioned he has considered purchasing traditional LTC in the past, but found that premiums were costly for something he may never need. You respond that you realize that two-thirds of men 65 and older will likely never spend a day in nursing care, but of course the other third will. Although he is concerned about the cost of such expenses, he is willing to take the bet.
You explain to your client that chronic care expenses could erode his savings, therefore not meet his principal objective of protecting and passing on his money! However, you agree that throwing premiums into benefits he is more likely not to need than to need may not be the best option. Indeed these premiums will have no cash value to his heirs. What if instead, your client could allocate just a small portion of his $500,000 into a product that offers principal protection, growth via several index
strategies AND chronic care AND a death benefit if chronic care is never needed? Would your client be interested in allocating just $150,000 into an annuity that could result in his $150,000 providing up to $375,000 in available chronic care benefits by his age of 75 or even $600,000 in available chronic care benefits by age 81 covering a stay as long as five years? This small allocation would make his $150,000 go a lot further than it would on its own in the event of needing chronic care while
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preserving the other $350,000 he puts into another annuity. And, what if your client is among the two-thirds of males 65 and older who never need nursing care? Would he be interested in passing to his heirs a death benefit worth $202,500 by his age of 75 or $225,000 by his age of 81? Great Plains Annuity & Life Marketing can assist you in meeting client needs by helping you navigate the sea of carriers, products and riders. Certain products can make a difference for your clients and serve as a way of building credibility and referrals among your client base. Allow us to assist you in comparing your existing menu annuity products to some of the newest riders on the market so you can present your clients the best solutions.
Carlos Rojas
Senior Annuity Specialist Carlos@gpam.biz
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LIFE INSURANCE A PERSPECTIVE ON THE INDUSTRY...
In my 30 plus years in this business, I can honestly say these are some very unusual times. The life insurance industry is facing some major challenges. We will see both changes and opportunities in our industry during the next several months. Many carriers will re-position products to meet their financial demands as well as develop new choices for future clients. Newly Revised Actuarial Guideline 38 - This requires revising reserves for those companies, both domestic and foreign, who decided some time ago to play in the No-Lapse Guarantee product space. These higher reserve thresholds will cause premiums to significantly increase and I suspect more carriers will withdraw their No-Lapse Guarantee products thus potentially spelling the end of these lower cost permanent plans.
Carrier Product Portfolios - I suspect we will continue to see more products launched that give flexibility to policy owners as well as the agent and company. ABR’s such as chronic and critical illness on UL as well as Term products should continue. More UL products with built-in death benefit guarantees out to mortality or for some significant period of years. Carriers may get creative to get their market share.
Distribution Choices - Who will be selling our products and how much will be sold 5 or 10 years from now? This is a serious question carriers are looking at for a couple reasons. First, there are fewer individuals entering this industry coupled with ongoing retirements of industry veterans. Secondly, there are few career channel carriers left who actively recruit and train new agents. So with the agent base dwindling, will some carriers switch to a Career channel, a PPGA channel or remain in the Brokerage channel? Would this be a driving force for carrier mergers or acquisitions? Will some foreign insurers leave the U.S. market? Only time will tell.
What did we learn about Universal Life? - If the NLG Universal Life’s still available for sale are now too expensive, more and more agents and clients will have to look at Index or Current Assumption UL illustrations. Agents who were in the business back in the early 1980’s when UL was introduced will re-live the similarities of seeing a current crediting rate plus a death benefit guarantee column that doesn’t go out far enough on an illustration. We know crediting rates fell and fell resulting in poor performance. However, the same decision back then will have to be made now. What crediting rate is too high and what premium to pay is too low?
Lower Investment Yields - Carrier investment yields lower than product guarantees can’t continue without remedies. Guarantees may be lowered on new issues, maximum first year lump-sum premiums may be even more restrictive and alternative investments other than bonds to back guarantees will need to be explored. However, this may also be the best time in the last 25 years to sell life insurance. Why? Because policies may actually outperform the illustrations shown at the time of sale if we are near or at the bottom on low yields.
Dick Reynolds, CLU V.P., Life Sales Dick@gpam.biz
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Assurity’s LifeScape® NonMed Term 350 & the Critical Illness Rider go together like peanut butter and jelly!
Med Ter m 35 n 0 No
C
al Illness Ri c i de rit r
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SIGNIFICANT LIFE INSURANCE POLICY REVIEW OPPORTUNITIES According to various sources, the number of Orphan Policy owners is as high as 50%. Many, if not most policy owners have either never had a policy reviewed by an agent and/or they do not really understand their annual statements. Given the fact that life insurance products do not come with an “automatic pilot”, many policies are vastly different when compared to how they originally illustrated. Many are headed for a financial disaster and policy owners need to know this. A simple question to ask is - Have you purchased any life insurance policies in the past 10 or more years that are still in-force? If the answer is yes then use the following as a track to run on. Policy reviews seek to answer 3 important questions: 1. Is the policy still suitable for the owner? Is the death benefit appropriate Is the premium appropriate Is the policy properly owned Are beneficiaries properly named 2. What is the financial condition of the policy today? What guarantees does the policy provide Have any loans been taken Are premiums plus loan interest and the loan being paid Is the policy convertible and to what age Are there still surrender charges in the policy if exchanged 3. How is the policy likely to perform in the future? How is it performing based on current assumptions How will it perform if crediting rate is reduced by 1% or 2% Is the policy expected to lapse prior to the insured’s wishes Is a change in the amount of premium expected Agents who consistently ask this question set themselves apart from others while benefitting from earning new commissions. We can help your client when solutions present themselves. Please contact our Life Department.
Jeff Bregovy Life Specialist Jeff@gpam.biz
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Dick Reynolds, CLU V.P., Life Sales Dick@gpam.biz
10/22/2012 2:09:46 PM
OUR LIFE DEPARTMENT EXPERIENCED. INNOVATIVE. FULL SCALE. INTERESTING LIFE PRODUCTS • No Lapse Universal Life with “Guaranteed Cash Value” • No Lapse Universal Life with NO-COST ROP • No-Med term with separate Critical Illness Rider • Survivorship Term • Turn IRA funds into Tax-free benefits to heirs • Church Legacy-Simplified issue life for Congregation
UNDERWRITING • Preliminary screening impaired risk cases- typically 48 hour turnaround time • Informal Shopping of Case • Managing Jumbo cases and avoiding total line issues with facultative reinsurance requirements • Direct access to underwriters • Associate in-house underwriter • Pushing for better offers from carriers
INDIVIDUAL & FAMILY SOLUTIONS • Term Insurance • Whole Life Insurance • No Lapse Universal Life • Current Assumption Universal Life • Index Universal Life • Survivorship Life • Critical Illness product
SALES SUPPORT • Quick Response on Illustration requests • We will suggest possible solutions • Best product for the client • Client Brochures • Product Guides • Applications
SENIOR MARKET-CLIENTS AGES 60+ • Estate planning • Creating a larger legacy with single premium life • LTC life Plans or LTC Riders • 1035 Exchanges • Pension Maximization • Final Expense Plans • Maximize IRA funds with life insurance • Simplified and Guaranteed issue plans • Turn IRA funds into Tax-free benefits to heirs
ADVANCED PLANNING • Estate Planning • 162 Bonus • Buy Sell Agreements • Key Person • 412(e)3 Plans • Charitable Remainder trust • Deferred Compensation • Family Limited Partnerships • Access to Attorneys
Call now for our FREE Agent’s Guide to Senior Market Life Sales!
• We’re happy to order exams
800.710.1115
www.greatplainsannuity.com JUST the FACTS | 4TH QUARTER 2012
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10901 W 84th Terrace., Ste. 125 Lenexa, KS 66214
800.710.1115
www.greatplainsannuity.com 100% Independently Owned! GPALM PRODUCERS ACCESS ANNUITY & LIFE RATES 24 HOURS A DAY!
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