Our business Partner Ben Ward has been an innovator and designer of products for many years. He has a long history of product creation dating back to the old Delta Life days and most recently was instrumental in helping Forethought design and deliver their Forethought Bonus Advantage product and several others. Now with his help, we will have access to a new and exciting product from Forethought which until recently was only available in the bank channel. I asked Ben to write something for the blog to help us promote this great opportunity. So…let me introduce Ben Ward, the owner of The Leaders Council and an innovator in the product design world.

Forethought Makes Banking Product Available to Us

by Ben Ward

Forethought launched the ForeCaresm Fixed Annuity in banks over a year ago. It is, “a fixed annuity with important long-term care benefits.” It is the essence of simplification, there is a 3-step process:

STEP 1

Pre-Qualification: Client signs the HIPPA Authorization Form and then completes the Medical Questions – 11 questions, but the first 6 questions all have to be answered “no”.

So what are the questions? Typically:

• Confined to a nursing home…?

• Require assistance with daily activities…?

• Use or been medically advised to use a walker, scooter…?

• Been diagnosed or treated for Alzheimers, stroke, Parkinsons, MS, ALS, AIDS or HIV?

• Applied for LTC in last 3 years and been declined?

The next 5 questions are more general and can have a “yes” with explanation and medication list. (I did them all and at 76-years-old could qualify for this product.)

This is just a summary of the type of questions, but you can see they are not hard and you as an agent will know if your client/prospect would have to answer “yes” to any of them before even starting the process.

STEP 2

Qualification: You and the client call Forethought to begin a client interview. A decision will be given the Agent either Standard, Premium or Decline.

STEP 3

You pull the cost of insurance factor from the Facts and Factors brochure or call Sales Desk for illustration with the factor. Complete the application, get signatures, and submit paperwork.

But, what is it?

It is a simple fixed rate annuity with a 9-year surrender scale and a 1-year guaranteed rate, reviewed each year (currently 2.5%) to be competitive with a CD.

What is the LTC benefit? There are two:

1) The Accelerated Benefit is basically the cash value before surrender charges in the account, and 2) the Maximum Extended Benefit which is a multiple of the account value (two or three times depending on underwriting). The Monthly Benefit is the sum of those two, divided by the number of months the benefit will be payable, which differs by the age of the client — at age 50 it is 90 months and at age 70 it is 72 months.

This is a real simple solution to the “I don’t want to pay for something I might not use” answer to buying LTC.

But here is the KICKER in this product:

One of the chief reasons people do not buy LTC is because they do not want to go into a nursing home, they want to stay home — this product lets them do that! The client can use the monthly benefit for Home Care, Adult Day Care, Hospice, Nursing Home, Assisted Living, Respite, Bed Reservation, Nurse and Therapist, Home Health Aide & Personal Care, Homemaker Services and Chore Services — WOW! To my knowledge no other combination product allows such a wide range of use of the payments. It starts if/when they have certification from a health care professional that they cannot do two of six activities of daily living.

Of course there are some problems. You have to be licensed for Long Term Care and have all the CE credits. You have to fill out new paperwork for Forethought (oh no!). And right now, not forever, you can only be “licensed only” not contracted in the normal hierarchy. Why? Because it was solely a bank product and they don’t need levels. But the company is working on it. Commission is 5%.

Interested? Want to run some illustrations for prospects? Call ISN at 800-338-1892, Brad or the Sales Support Team will get it done! There is also a complete kit available with everything you need to know – even a sample policy and the illustration tab if you want it.

This product will open doors! Get on board now.

Cal-PERS – the California Public Employees Retirement System has a public relations nightmare on their hands. For years CAL-PERS has been promoting their own privately funded Long Term Care policies to its rank and file. Many of us who sell these types of policies were always surprised at how low the premiums seemed compared to our traditional polices from carriers like Genworth, Transamerica and John Hancock. And, as noted in previous blog articles, most of the big name carriers are repricing or raising rates to adjust to the current economic environment. But, at the end of 2012, CAL-PERS announced to their over 140,000 policy holders a rate increase that is shocking to all of us. The average hike for every policy holder will be 85%…that is right…an 85% increase! I can’t imagine how the employees in the State are taking this news. Below is an article from the Sacramento Bee that explains the history of CAL-PERS and their long-term care policies. The questions remains…who is to blame?

http://www.sacbee.com/2013/02/28/5223864/the-state-worker-did-calpers-lie.html

If you are in the teacher market in CA, or if you work with any State Employees – call us today to hear about our state-of-the-art LTC workshop that may help you get in front of these groups and educate them on what their real choices might be.

Yes…I know…this is a Blog for insurance professionals so what is the tribute idea? Well I did say this would get “Bersonal” and for me the events that took place in Newtown, CT were very personal. The events at Sandy Hook were earth shattering to say the least. I have two children ages 7 & 4 and since I am originally from CT I was overwhelmed with grief as the news of what happened there hit me. I read everything I could get my hands on. I was determined to do something, to find some way to help. I found the Sandy Hook Promise website and I was inspired. I decided to take action.  I collaborated on this song with my friend Jayson. He does the singing and the music while I provided the words.  My brother Evan  added the photos and images and a tribute was born. Here is the latest version of our tribute to Sandy Hook….inspired by the website set up for the Promise of Sandy Hook.

Please, if you are so inspired…post it on your site…we plan to send this too as many people as possible to help support their cause.

A New Promise- A Tribute to Sandy Hook

As I mentioned in previous articles, AG38 and the ongoing low-interest rate environment have forced some carriers out of the No-Lapse Guaranteed (NLG) UL business.  Others have repriced theirs and in some instances introduced premium caps. However, a couple of these same carriers have come up with dramatically new product models to try to preserve NLG UL’s strengths but at less risk to the carrier than old models had.

Transamerica’s introduction of “Real Time Pricing” earlier this year was the first example of this thinking outside the box.

https://jeffreyberson.com/2013/01/31/transamerica-responds-to-ag-38/

Now, Lincoln Financial’s Treasury IUL will be the second.  And it bears your attention.   They are very excited about it.  Let’s just say that, in how it works, Treasury IUL has elements of a dial-a-guarantee NLG UL, an IUL, and, believe it or not, par whole life.  Treasury IUL policy credits can be used in several ways that are similar to dividends.  There is one big difference, par whole life dividends are calculated in some black box no one outside the company knows.  Treasury IUL policy credits are stated in the policy as a function of the Treasury’s yields.  A client who tracks those will know exactly what he should get ahead of time.

There is an upcoming webinar scheduled for Friday…call our office if you want the scoop on this new innovative design.  This will be something new and different to discuss with your clients.

As I travel throughout the US doing workshops and seminars in support of our Reps I always hear the same thing. How can we get more people to talk to? Why can’t I solve the prospecting problem so I can do what I do best…provide solutions for my clients needs?

Every producer at one time or another has dreaded the idea of prospecting and has struggled with figuring out an effective system for building business. In studies of  successful people in our industry, it has become clear that those that reach the top-of-the-table have similar characteristics. First of all, they have discipline. They have a plan, and they work their plan. All of them have confidence and have overcome the fear of rejection that nags many producers. Confidence breeds success, success breeds confidence. So where do you start?

ISN Network has had the privilege of working with some of the best and most   prolific producers in the industry. I decided to reach out to our top reps and find out their best ideas for prospecting. Over the next few weeks I will share with you the best of their ideas.

#1  – Use Centers of Influence

Working directly with attorneys and CPA’s is the most effective way to build   your business. Most agents make the mistake of focusing their center of   influences on a wealthy prospect, rather than on the professionals who help them make decisions. The goal is to become a part of the decision-making   team. Our experts all agree, it’s difficult to create relationships with attorneys and CPA’s. This is a long-term strategy, but vital to long-term success. At least twice a month, try to take an attorney or CPA to lunch. Always be prepared with an idea to discuss. Always follow-up with a thank you, and continue to nurture the contact whenever a new idea or concept becomes available. Professionals like to work with other professionals.

#2 – Become an Expert

Regardless of whether it is long-term care, tax-sheltered annuities, estate   planning, or disability insurance, you must know your topic cold! Establish   yourself by studying your subject, getting the proper credentials and writing   articles that have depth. Knowledge is a confidence builder. According to one   of our top-of-the-table producers, “There is nothing better than   standing in front of a room of prospects and knowing there isn’t a question they can ask that you don’t know the answer to.”

#3 – Demand Referrals

The most cost-effective way to build your business is through the referral process. But, most producers do not ask for referrals. Do not overlook this area. Some of our top-of-the-table producers do not have to prospect at all anymore because they get all the business they can handle from referrals. This is a problem we should all have to deal with. To get started, try a simple change in the way you run your meetings. Try using an agenda that outlines all of the topics you will discuss with the prospect. Include an area for “other ideas” in case the prospect wants to add a   suggestion. However, the last item should be simply stated: “referrals.” This simple idea will help you to develop the discipline to ask for the referrals, as it is part of your agenda. At the same time, your prospect will see it up front, and not be surprised when you ask for the referrals. Remember, you cannot get a referral if you do not ask for one.

When I was growing up I was a big baseball fan. Every morning I would study the box scores to see how my favorite players and teams were doing. I had two players who I liked the most. Carl Yastrzemski and Hank Aaron. I got caught up in the YAZ excitement in 1967 when the Red Sox had the “Impossible Dream” season and YAZ won the triple crown. I was barely 7 but I could read a box score. I knew what YAZ did every day and from that excitement a baseball fan was born.

When I could read for real, I started reading biographies of Sports Stars. The book I read on Hank Aaron was written well before he was even thought to have a chance at the home run record. Most felt Willie Mays was the guy who had the best chance. But when I read the story of Hank, of how he had first learned to hit with his hands on the bat backwards (ie: he held his left hand on top like a left-hander would do) and how from that beginning in the Negro leagues he forged an amazing career…a Hank Aaron fan was born.

And Hank stood the test of time. He was never flashy, just a consistent force in the middle of the lineup. A 5 tool star who was often overlooked. It wasn’t until Willie faded in his pursuit of the Babe that people began to think…maybe Hank could do it. And as that possibility became a reality I was Hank’s #1 fan. I was only 13 when he broke the record but I remember it like it was yesterday. It felt like I had discovered Hank. As if my belief in him and my faith that he could beat the Babe had been a key to his success. His success was my triumph. As he circled the bases on April 8, 1974, there was no happier kid in the US of A.

I write this today because I just finished reading the biography “The Last Hero – A Life of Hank Aaron” by Howard Bryant. Reading about Hank as an adult was a different experience but for me his greatness still stands the test of time. And his life can give inspiration to us in our business. His work ethic, his faith, his consistency, his principles, his ability to stay strong in the face of incredible adversity. All of these attributes helped define Hank but can also be lessons for a Financial Advisor who also wants to stand the test of time.

In our business there is no “easy way.” There are no “get rich quick” schemes. It is consistent hard work and doing right by our clients that will stand the test of time. I have worked with many different types of financial advisors. The flashy ones come and go. The “one-trick ponies” never last. The best understand the need for consistent activity, for reliable advise and balanced thinking. I appreciate the hard work necessary to be successful in our industry. When times and the economy are tough, our consistent message is what shines the brightest. And a consistent balanced method will bring success and a long career. Just check the record book.

I suppose I should write a future article about Pete Rose and why we should not be like Pete…LOL. But until then, enjoy this Super Bowl Ad from a few years back:

http://www.youtube.com/watch?v=bDyQcnJrQL8&feature=player_embedded

Over the last part of 2012, we saw many dramatic changes in the Long Term Care Insurance world. Specifically, some carriers left the market place, some carriers eliminated certain benefits and plans and other carriers repriced their policies to bring them in line with their actual experience.

The latest big change concerns rates and underwriting; carriers are looking at moving to gender-specific rates (rates for women will definitely be higher as they live longer and are more likely to use the insurance.)  Insurability is changing to more life-based underwriting.  Genworth is the first to announce these changes with the launch of Privileged Choice Flex 2, April 2013. It will most likely launch in the Interstate Compact states first, then in the other states as it is approved.  When it is launched in a particular state, it will be the only Genworth LTCI product available.

 The good news is that with this new product, Genworth will be returning to the higher first-year agent compensation which was reduced last July.

However, there will never be a better time to insure your single female clients.  Act now!

Here are some other changes Genworth is making with this new product:

• Adding 4% Compound Inflation
• Eliminating 7-yr. Survivorship Option
• Reducing maximum age from 79 to 75
• Lifetime benefit multiplier will be discontinued
• Redefining ‘couples’, eliminating relatives and restricting to 2 people
• Applying claims offset on all compound benefit increase options
• Informal care available for homemaker and chore care services only

Underwriting changes:

• Will require paramed for all applicants (this could be a good thing as it may reduce the need for phone interviews and medical records at younger ages.)
• Will require family history (insure your clients with family history of dementia, Alzheimers, Parkinson’s and other genetic diseases now!)
• Four new underwriting categories:
  • Preferred Best
  • Preferred (10% higher premiums than Preferred Best)
  • Select

We have given you all the information available at this time. Genworth has promised more next month. So stay tuned

To most of us who understand the insurance world and the real choices available for our clients, the advice that Suzy Orman gives is at best irritating and at its worse negligent. It is virtually impossible for one piece of advice to be the answer for millions of people all at the same time. In our world of financial decisions, each client is like a snow flake, no two are alike and no set of circumstances are the same. In Suzy’s world everyone is the same and everyone should just do what she says. Black or white. No gray.

Yesterday, driving in my car…I was listening to a financial talk show and the caller said “but Suzy Orman says I should just buy term and invest the difference.” To his credit, the host asked the caller several questions to see if that strategy made sense for that individual. The whole exchange got me thinking. Why do so many people like Suzy think that buying term and investing the difference is a good idea? And more importantly, why do they not understand the power of permanent life insurance the way we do?

In my experience, people who say they will “buy term and invest the difference” (BTID) rarely do that exactly. Instead they buy term and spend the difference. The truth is people don’t always understand the savings element of the BTID idea. Initially they may have had the thought of investing the difference, but typically life gets in the way and this is where the BTID idea usually fails, leaving the client with no insurance and no investments.

But, for the sake of this article, lets assume that our client does invest the difference and does stay true to the BTID idea. There are still several problems with the concept that Suzy and her pals tend to brush over or minimize. Perhaps the biggest risk other than the actual investment that the client might choose is the insurability risk. We often say that people are never more healthy than they are right now. This is true in a lot of cases but what it points out is a possible risk that can happen in the BTID strategy. Insurability may be lost in between terms – in other words a client must “re-qualify” for the new term policy each time the term period runs out. If they can’t qualify or if the new policy might be rated, then costs for the term can be significantly higher or worse the insurance could be lost.

Another problem that is often overlooked by the proponents of BTID is the investment risk. And within the investment risk there is also another risk and that is the risk of the tax implications. One of the myths of the BTID strategy is that somehow the investment will always grow and will magically be there when you need it. Unfortunately, and recent history bears this out, investments can be volatile and inconsistent and there are no guarantees that the funds will be available and at their peak when you need them most. In addition, the tax implications of the investment are not often factored in when making the decision. With cash rich life insurance, the tax advantages are simple. The cash value is tax deferred (ie: no taxes due on money as it grows) and the funds in a policy can often be accessed tax-free via policy loans.

The BTID idea needs to be flushed out for each individual and compared side by side to a permanent life solution to determine if it is a good idea for our clients. There are several softwares that do this well and we can provide you with a valid comparison that can help your client make a “good informed” decision. I wonder if Suzy and her friends have ever done this type of analysis?

In our IMO, we are firm believers in the power of cash rich life insurance as part of a long-term plan. But, and this is an important distinction, we would never say that it is right for everyone. Term insurance does have a place and can solve a specific need. But to simply eliminate the idea of permanent coverage as an option discounts the true value of a permanent plan. Financial gurus like Suzy Orman who make blanket statements with no regard for the individual set of circumstances are short-sighted and irresponsible. So yes…STOP! Don’t take Suzy’s word for it…call us and let us help you investigate your next case. You may be surprised what you find out.

As 2013 begins, we have seen a seismic shift in the Guaranteed UL world. Each carrier has responded differently to the new regulations depending on how they priced their product prior to 2013 and how they interpret the new regulation.

(https://jeffreyberson.com/2012/11/16/morgan-stanley-report-ag-38/ )

As an IMO, we are on top of the price and product changes and can provide you with the most current up-to-date data. Our marketing team stands at the ready.

One carrier, Transamerica has taken a much different approach. Using a system that they call “real-time pricing”. Joe Aitro, Sales Vice President at Transamerica describes it this way:

“To help us all get to work building a successful 2013, Transamerica has rolled  out new TransACE^® and TransACE Survivor^® guaranteed
no-lapse UL products, with rates based on our patent-pending Real Time Pricing platform. Remember to ask, “What does greatness really look like?” when evaluating GUL products and their respective carriers. If the lowest premiums on a spreadsheet today leap out at you, you should also ask, “But what about next month, or next year?” And “Who is going to be able to maintain stability and sustainability in this market?” Real Time Pricing from Transamerica makes a commitment to do exactly that on our portfolio of ACE products. And did you know that with our ability to adjust the ACE interest rates on a weekly basis, we have reduced the cost of the no-lapse guarantee on both our TransACE and TransACE Survivor products three times? No other carrier in the industry has that ability to react to changes in market conditions without filing a new product. Add to this our flagship endorsements and Flat Extra Equivalent, and you can confidently tell your agents what greatness looks like: TransACE from Transamerica.”

Hyperbole aside, Joe and TransAmerica have a unique approach to AG 38. Here is a link to a full explanation of Real-Time Pricing.” Give it a listen and give us a call. We can help.

http://pages.transamericainsurance.com/realtimepricing/