Friday, April 24, 2015

Facts of Life Insurance - Diabetes

Diabetes comes in 2 forms.

Type 1 - diagnosed in children and young adults, and is known as juvenile diabetes. It is the rarer of the 2 types.

Type 2 - considered as adult-onset or noninsulin-dependent diabetes.  It is the more common of the two.

With good control and normal A1C score life coverage is attainable.  An A1C score under 7 is better for getting approved.  It is tougher with scores beyond 8 but, it is still possible.


40yr. Male looking for 1 million of 20yr. Term

Less than $1,800/yr

40yr. Female looking for 1 million of 20yr. Term

Less than $1,500

You may be able to get a better deal on a permanent policy.  Many insurance carriers offer underwriting credits.  Individuals with diabetes would qualify for those credits.  It could result in a substantial reduction in premium.

You should always try to obtain coverage going through normal underwriting channels.  Premium wise it should make a big difference in cost.  If that method doesn’t work then a client can look at a guaranteed acceptance policy.  That should be used as a last resort.

Enjoy our video....

Tuesday, April 21, 2015

Facts of Life Insurance - Professional Designations

Why do business professionals get professional designations?  Is it to enhance the quality of your work and improve the client experience?  Is it simply to make you appear smarter?  What have you been doing since you put those letters after your name?

As an advisor who clients put their trust in there should be an ongoing quest to learn and get better at your craft.  Many professionals have blinders on and want to meet and talk to as many clients as possible so they can focus on their specialty.  Sales.  If you aren't taking the time to learn in this dynamic business world how can you give your client the best experience?  There is no virture in ignorance.

The good news about a designation is that they come with some amount of learning.  I spent quite a few hours slaving over those CFP books.  If you stop learning and challenging yourself what was the point in getting the designation in the first place?

We strive to work with partners that excel.  They are proponents of lifetime learning.  They wouldn't sleep at night if they didn't think they were doing their best work.

Don't hide behind the letters after your name.  Don't use them as a crutch.  Prove how good you are with the quality of your work.

An example we have seen in the life insurance industry agents that manipulate target premiums in order to receive a higher payout.  The client may not even realize the difference.  In the end it is going to have an negative impact on the amount of insurance or premiums.  It is just not the best plan the client could have received.

Enjoy our video....

Sunday, April 19, 2015

Stockholm Syndrome in Captive Agents

I have recently realized something about a captive agent friend of mine in the life insurance and financial planning business.  Over the 10 years I have known him, I have heard him complain about how some of his clients and even friends of many years have been taken away from him by independent agents.  Some of these times were when he was expecting a six figure premium case from wealthy clients and because he did not have the best product or quote, his long time clients went with the other guy.  He thinks it's the clients' fault or they were misled by a polished salesman.  Of course, neither of these assumptions are true. But I think I know what's going on....

He has Stockholm Syndrome!  Stockholm syndrome is the psychological condition in which hostages form a positive bond with their captors.  Those being held captive empathize and sympathize with their captors to the point that they even defend their motives. 

Many insurance companies such as Mass Mutual, MetLife, Nationwide, American General, AXA, Lincoln, etc., have captive agents.  These agents are not allowed or are highly discouraged from doing business with other companies.  But here's the rub, there is a double standard.  The companies above and many more are available for independent agents to use.  The carriers have support teams just for the brokerage channels who compete with the agents on the captive side.  So what would motivate a prospective insurance buyer to work with a Lincoln or Nationwide captive agent, when that consumer could have access to those companies and more through an independent?  A relationship, Maybe, but when you're talking about 10's or 100's of thousands of premium dollars over the life of the insurance contract, the smartest shoppers use independent agents.

Thursday, April 16, 2015

Whose Hours are the Most Valuable?

The answer is.. The person who knows the most.  A smart friend of mine once told illustrated this to me in this example:  A guy calls a mobile computer technician to fix his computer after trying everything he knew to solve the problem himself.  The tech shows up, hits a couple of keys, flips the computer around, pulls out a screwdriver and turns a screw half a turn.  Immediately, the computer starts working again.  The gentleman with the newly repaired computer says "Wow, that was quick work.  How much do I owe you?"  The tech says, "that will be $100."  Surprised, the customer says, "A hundred bucks for turning a screw!?" the tech responds "No sir, that would be outrageous.  I charge a dollar for turning the screw.  The other $99 is for knowing which screw to turn."

The real story is that the folks who know the most have already put in thousands of hours of time.  This is how they acquire the knowledge it takes to earn the seemingly outrageous (to some people) sums of money for each actual hour on the job.

Developing and Maintaining Partnerships

Folks, we can't do it all... But we know the kind of excellence our clients deserve. 

As a financial professional, it is important that you do not abandon your clients to the waiting wolves when your job is complete.  If you consider the wellbeing of your friends and clients, the responsibility is upon you to make sure that all the right people are in place to keep the wolves at bay.  How do you do this when you know what you're good at but your focus is narrow?


The right people are rare, which makes them hard to find and valuable.  I'm talking about bankers, independent property and casualty brokers, independent life and health insurance brokers, wealth managers, CPA's and attorneys, etc..  You get the picture.  The partners I am talking about are the kind who are as good at what they do as you are at what you do.  That isn't all.  There has to be a similar business culture and philosophy, client bases and complimentary selling styles.  It will probably take you a couple of years to build these relationships.  Some of these people may be licensed as you are, so commission or fee splits will be involved.  In those cases, the MDRT guidelines are a good starting point for figuring out  percentages.  These relationships, if done right, are mutually beneficial and end up adding extra revenue to both sides.  Referrals come more frequently because of all the extra lines of business that your "group" handles.

Enjoy our video....

Monday, April 13, 2015

Facts of Life Insurance - Policy Review

How different was your life 5 years ago?  How about 10 years ago?  Family.  Technology.  Job.  Investments.  Gas prices.  The only thing certain in this world is change.
We meet clients all the time that don’t want to think about reviewing their insurance situation or think everything is fine.  As an advisor you are doing a disservice if you aren’t asking those questions.
Reviewing your existing life insurance is something that should be done every few years.  You aren’t going to mess up your current policy by requesting an inforce illustration.  It may not be performing the way it was designed to run or there simply may be a better product available now that wasn’t before.  90% of People Have The Wrong Insurance

New surrender charges - That could be a factor but, if a new policy is still a better fit then that shouldn’t deter you from making a switch.  There are policies now that have a high early cash value option where your premium money is guaranteed available from year 1.

New contestable period – You weren’t worried about that when you first bought the policy so it shouldn’t be an issue.  If you don’t materially misrepresent(lie) on the application then you have nothing to worry about.  Even still the issuing company could come back and tweak the policy to represent what you should pay for the same coverage if they find out.  The insurance company really isn’t in the business of doing that.
Bad decision - Many times captive agents will use fear mongering to try and keep policies on the books to enhance their numbers.  Don’t let that sway you.  Get an unbiased perspective.

Analogous to mortgage rates – If you have ever refinanced your house then you realize how important the interest rate variable is to the equation.  There are interest rates in life insurance as well as mortality tables.  Back in the 1980’s when interest rates were drastically higher cash value projections were based on double digit returns.  Now 3-4% is more likely.  You wouldn’t keep paying a higher interest rate on your mortgage if you could drop your rate enough to reduce your payments or trim down your time period for paying off your house.
Along with interest rates mortality tables have changed with people living longer.  Insurance companies have updated their policies to reflect that which in turn lowers the cost of insurance.

Family Dynamics – As people age the amount of coverage changes as well.  When you are first married you may primarily be looking to replace income for the deceased spouse.  Fast forward 10 years later and maybe you have 3 kids to factor in along with a bigger house and college.  There is a need for more coverage.  Fast forward another 10 years and the kids are out on their own.  You have funded retirement accounts and good portion of your house is paid for.  Maybe now you need less coverage.
Conclusion – Reviewing your insurance needs just like any other asset shouldn't be ignored.  The insurance landscape is ever changing.  If you aren’t elbows deep in it(and why would you) then you wouldn’t know if you can improve on what you have or if it is just fine.  Beyond the insurance industry reassessing your own financial situation as it pertains to risk management is equally important.

Enjoy out video....

Wednesday, April 8, 2015

Facts of Life Insurance - Do As You Say Not As You Do

Why would you do what say you're going to do?  Is there any value to it?

People can recognize excellence.  It starts with doing what you say you are going to do.  We run across too many people that take this simple exercise for granted.

1. Client asks us for a term insurance quote and we tell them we will get them something before the end of day.  We better do that or we are starting off on the wrong foot.
2. Answering emails in a timely manner -  24 hours has been the status quo for a response even though now that is considered slow.  If we don't know the answer or can't solve the problem we pride ourselves on responding back the same day or the following morning if it was received late in the day.
3. Phone calls - We work with too many individuals that aren't great at returning phone calls.  The response is we'll call you back in 15 minutes or tomorrow.  Then....nothing.  Who does business that way?  We aren't cold calling.  We're calling because there is something we are working on that we need your help with addressing.  Next time just tell us you aren't going to call us back or better yet do so in a timely manner.

We partner with business professionals and bring an expertise to the table to help their clients.  We aim to enhance and broaden the experience the client has with their advisor.  We strive to assist that client as if they were our own and when we accomplish this that client's experience is top notch and the advisor has done even more to solidify their relationship.

It shouldn't be such a rarity that people you partner with do excellent work and do what they say.  It makes us stand out.  We have agents and advisors that come to us because of that very reason.  Even if you strive for perfection you can't expect it.  There are things we can't accomplish but one of our goals is to be upfront and explain everything.  What a concept!

Enjoy our video.....

Friday, April 3, 2015

Facts of Life Insurance - How To Handle A Decline

If you have been declined for life insurance all hope is not lost.  Insurance underwriters don't like uncertainty.  If a client has a medical issue the underwriting department would rather see a period of time between the occurrence and the treatment provided as well as successful follow-ups.  Any ambiguity and they always assume the worst.  No news is bad news.

Check out ways to avoid being declined. How To Avoid Being Declined

Ideas to Consider if You've Been Declined:
1. Pick A Better Company - If you worked with a captive agent then the solution that was presented to you at application was within whatever company that agent represented.  Clearly that wasn't the best fit.
2. Shop Around - Companies change their underwriting standards.  Some companies are more aggressive with certain health issues than others.  Sometimes depending on their existing portfolio a company could more lenient on diabetes or heart issues for example.
3. Avoid a Second Decline - Companies can view your history through the MIB.  One red flag like a decline that pops up is less than ideal but, a second would really sting.
4. Better Explanation of Your Situation - An underwriter just reviews the material that's put in front of them.  A conversation or a cover letter outlining your past declination may present your case in a better light and many times can change the mindset of the insurance company.

Enjoy our video.....