Addressing the Mid-Market Challenge PAGE 4
Making the Life Sale Easier
PAGE 6
The Future of the LTCI Market
PAGE 8
NEWS
BROK
E
RAGE
IN THIS ISSUE
PJ’s Picks 2
What About Your Financial Future? 9 Unique Opportunity for the Unique Producer 10 Carrier Listings 11
YEAR END EDITION 2 0 1 3
YOUR FINANCIAL SERVICES PARTNER — FOR LIFE AND ANNUITIES
Single Premium Life: Not All Are Created Equal
By definition, all SPL products havecertain characteristics in common – one single premium payment, guaranteed cash value, dividend growth…
But not all SPL’s are created equal. Here is a quick introduction to two mighty noteworthy, simplified-issue single premium life products that pay you 9% and 15% commission.
Both products go above and beyond by providing:
• Competitive Compensation • Accelerated Death Benefit Rider • Simplified Underwriting - No Exam • 5% Free Withdrawals
Option One features 15% street-level commission, interest-sensitive returns, and an increasing death benefit.1
Option Two features a 12% premium bonus, 9% street-level commission, return of premium and index-linked returns.2
In most cases, underwriting decisions are made within 48 hours of the telephone interview!
By adding these two products to your portfolio, you will have tools
available to address these three very common wealth-transfer goals:
• Immediately increase estate value • Easily pass assets to
beneficiaries’ income tax-free while avoiding probate
• Maintain accessibility to assets in the event of certain health conditions
Call the Life Team at 800-491-0697 today for your complimentary Producers Guide to the products and pre-qualification plus underwriting guidelines.
1. Street level through applicant age 8O; 11.5% ages 81-85. 2. Street level through applicant age 75; 8.5% ages 76-80; 6.5% ages 81-85. Not available in all states. Policy may vary by state.
CASE STUDY 1
Female age 70 thinking about placing $100k into an annuity
No income need - solely legacy planning
Results:
• Tax-free death benefit of $208K
• Living benefits for nursing home & chronic illness • 9% commission
CASE STUDY 2
Male age 84 w/$200k in a CD
Doesn’t need income and would just like to pass the money on to his favorite charity
No return of premium necessary
Results:
• Guaranteed DB $222K (a significant increase over the 1.5% he was earning on his CD)
2
2
5
TIPS
FROM
THE TOP
PJ’s PICKS
H
ello to All! It is unbelievable that we are in the last quarter of 2013. We had a little bit of a slow start, but we are seeing very nice numbers as we enter the home stretch for 2013.I will be focusing on “What’s Trending Now.” We have seen a lot of gloom and doom in the area of rates and caps for, quite frankly, the last 24 months. We are starting to see some slow and steady movement, in a positive direction, of those caps and rates. This movement seems to be triggering some room for new product development. The shoptalk is promising as a result. We had some phenomenal cap increases in September that we have been told will stick around.
Another area of promise is the enhancement of riders that are currently
offered on many of our fixed indexed products. More carriers are getting involved with the impairment and confinement benefits associated with lifetime income riders. This allows us to offer more benefits with our core carriers. With that said, let me define “core carriers.” A core carrier provides the greatest benefit to both the client and the agent. Factors considered are product diversification, renewal rate integrity, fair commissions and exceptional service. We are all in this business to make money, so efficiencies are critical for that to happen.
Suitability continues to be a “pebble in the shoe,” but I believe that most agents have become more familiar/educated on what a carrier wants to see as far as a suitable sale. So let me congratulate you on adhering to suitability and learning what looks good and what does not. In the long run this will hopefully keep everyone out of the commissioner’s office.
We continue to look for “Value Add” tools for your business. At times we have to market test a potential opportunity. This allows us to either scratch the program or provide testimony to the success of the testing process. Keep in mind that we have to spend money to make money. You have to do the same. It is not unusual for us to get the request for leads in our day-to-day conversations with agents. It is a valid request, but the core element to grow your business is creating a client base and developing those clients. Like our firm, you cannot be everything to everyone, but you can tap into us for reputable providers for products in which we do not specialize.
There will be a lot of activity in the last quarter of this year. I challenge you to reach out to those clients you have sold in the past. They need your help and they need to know what is available that may better their financial health. Watch your emails for rate changes and product changes/ introductions, call us for case design, or just call to pick our brains.
PJ DUNCAN
Director of Annuity Marketing 800.747.5612
PJ@DavisLife.com
1
Engage customersSuccessful relationships are a two-way street. Loyal customers and clients want to be actively invested in the relationship..
2
Become the first callIdeally, customers should view your company as a Trusted Adviser, which means that you are the first person they call when they pursue a new line of business or launch a new project, or if they need help.
3
Solicit feedbackIn addition to offering useful and relevant information, regularly solicit feedback and advice from customers.
4
Think individuals,not numbers
Customers are not homogenous. Rather, every account has its own unique needs and preferences
5
Maintain open communication Healthy relationships thrive on communication Excerpts from Five Tips for Creating Relationships That Drive Sales by Tom Cates, president of a Boston-based consulting agency. As it appeared on www.marketingprofs.comWealthMax Bonus Life
™
and WealthSure Life
™
Two Exciting Wealth-Transfer Life Products
from EquiTrust!
FEATURING:
Accelerated Death Benefit Rider
Simplified Underwriting —
NO EXAM
15% FREE Withdrawals!!!
WealthSure Life
™15% Street-Level Commission
3Interest-Sensitive SPWL
4.9% Current Rate
Increasing Death Benefit
4WealthMax Bonus Life
™12% Premium Bonus
Return of Premium Feature
Index-Linked Returns
9% Street-Level Commissions
2These GREAT products give your clients the opportunity
to:
Immediately increase their estate value, easily pass assets to beneficiaries income-tax free while avoiding probate, and maintain accessibility to assets in the event of certain health conditions.
Call 800.747.5612 TODAY!
1Issuance of policy may depend on answers to health questions in application. 2Street level through applicant age 75; 8.5% ages 76-80; 6.5% ages 81-85. 3Street level
through applicant age 8O; 11.5% ages 81-85. 4Increasing Death Benefits based on currently illustrated non-guaranteed values. Agent compensation is subject to change.
WealthSure Life is a single premium whole life insurance policy. WealthMax Bonus Life is a single premium index universal life insurance policy. Not available in all states. Policy and riders may vary by state. Policy issued on form series ETL-ISWL-2000(01-10) and ETL-IUL-2000(08-10). Both products issued by EquiTrust Life Insurance Company, West Des Moines, IA. For Producer Use Only.
4
The Mid-Market Challenge
M
ore Americans are underinsured now than they were a decade ago, and nowhere is the coverage gap larger than in the middle market. LIMRA defines the middle market as households that have between $35,000 and $100,000 in annual income. This is a significant problem for the life insurance industry, but it also represents one of our biggest opportunities going forward. Billions of dollars in potential annual premiums lie untapped. The challenge is to create flexible, innovative ways to reach middle-market customers and help them get the kind of financial security and peace of mind they need.The benchmark that everyone seems to come back to when lamenting America’s underinsurance problem is LIMRA’s 2010 “Trends in Life Insurance Ownership” study, which is conducted every six years. The 2010 study revealed that ownership of individual life insurance hit a 50-year low, with only 44% of U.S. households having coverage. The number of U.S. households that have no life insurance whatsoever grew from 22% in 2004 to 30% in 2010, meaning 95 million Americans had no coverage whatsoever in 2010. The industry issued 1 million fewer life insurance policies in 2010 than in 2004.
Why Target the Middle Market?
1. One important reason is that life insurancesales often prove to be a bridge to sales of other financial product offerings, such as annuities. 2. Another reason relates to ease of sale and return
on time investment. Less customer scrutiny and simplified issues make for a quicker turn around. 3. The use of Internet technology makes approaching
this market not as face-to-face oriented, especially with term insurance sales. (Market surveys show middle market consumers use the Internet to educate themselves on life insurance products.)
The Value Proposition
Despite the mid-market gap, remember that the value proposition of life insurance has not declined. In fact, you can make the case—and we should all be making it—that hard times make life insurance protection more valuable than ever. Nothing can push a family into a financial crisis
faster than the unexpected death of a breadwinner with little or no life insurance to provide support.
To close the underinsured gap in the middle market, you need to concentrate on affordable life insurance options that can get middle-market families the kind of coverage they need to weather financial uncertainty. To do this you must overcome dangerous misconceptions of a typical mid-market prospect.
One misconception is how consumers greatly overestimate the cost of life insurance coverage. A recent joint LIFE Foundation/LIMRA asked Americans to name the annual premium for a 20-year, $250,000 level-term policy for a 30-year-old policyholder in good health. Americans estimated $400—or more than twice the actual $150 annual cost.
To demystify life insurance, we need to be able to have a conversation with a client where we say, “You may not need life insurance for your whole life, and your needs are going to change.” A policyholder with a young family may need a certain level of coverage that can provide enough support for income replacement, college funds for the kids, and other expenses
down the road, but not necessarily last to 120. The industry is coming out with new products to reflect this changed emphasis. These products often provide coverage up until retirement and may include premium waivers in the event of unemployment or disability. Incorporating these kinds of safeguards against financial reverses is really what life insurance is all about, and this is the kind of approach that drives home the point that coverage has to be part of sound financial planning.
The way to crack the middle-market is simple but not easy: know your customer, find the right message and delivery method to resonate with different segments, and come up with products that address new financial realities.
We at Davis Life Brokerage are here to help you with this under tapped market. Call us and we will work with you to provide your mid-market prospects with a solution to meet their unique needs.
ANN LEWIS-JACOBSON CLU
Life Account Executive 800.747.5612 Ann@DavisLife.com
Contracting with Davis Life Ensures Smooth Sailing
Our highly skilled underwriting team gets your cases approved
with fewer surprises — which means quicker compensation for you!
MEET OUR UNDERWRITING TEAM:
Bob Pedigo, BS, CLU, FALU, FLMI, Vice President of Underwriting with over 30 years of expertise, Bob works closely with all our companies and their underwriters. He can fully underwrite the case before we send it to a company so we know exactly what to expect.
Danni Pedigo, BS, FALU, MSW, Chief Underwriter has 28 years of underwriting experience, was past president of the Indiana Home Office Underwriters’ Association, and is certified to read electrocardiograms.
Becky Uskert, RNjoined us in 2006 from US Financial. She brings a valuable background as an RN for more than 10 years specializing in telemetry/cardiology.
Karen Padrucco, BS, FLMI, FALU has 30 years of experience as an underwriter with both direct and life reinsurance carriers. She comes to us from AIG where she was an Associate Director.
Sheree Shipp, CLU, AALU, FLMI, ACS has 15 years underwriting experience, and came to us from New York Life as an Underwriting Consultant. Sheree is certified to read EKGs.
Nancy Harvey, BA, FLMI, ACS, HIAA, ICA has 20 years underwriting experience and came to us in 2009 from Aviva USA.
Robin Terrell has 24 years of life and disability experience and comes to us from Foresters Insurance as a Senior Consultant.
Galip Elgin, BA has been underwriting for 15+ years, came from AIG in 2009 and can interpret EKGs.
Cathie Morgan, BA, FLAU, FLMI, HIAA Cathie has 30 years of underwriting experience and came from American United Life as a Senior Underwriting Consultant.
Chris McKeehas 25 years underwriting experience and worked briefly with Allianz, after working several years with Prudential and Metropolitan. Responsible for underwriting applications from US and European offices, she had an approval limit of 5 million, working cases up to 15 million. She helped to develop and implement a more efficient underwriting system.
Lori Ammons, FALU, FLMI, ACS, ARA Lori has over 14 years experience in the industry and a management background. She is actively pursuing her BS from WSU in Genetics.
Ken Turscak, BA, FALU, FLMI, ACS Ken comes from Lincoln Financial, where he was most recently Senior Underwriting Director. He brings more than 23 years experience in the insurance industry with approximately 20 of those years in underwriting and underwriting management.
Will Walker, BS spent 6 years underwriting with two San Diego based BGA’s, where his primary respon-sibilities included packaging, underwriting and negotiating offers on large cases. Prior to that,
he spent 6 years underwriting with Standard underwriting disability and life insurance applications
Top Carriers - Case Design (satisfied client = satisfied agent!)
Call 800.747.5612 with Your Next Case!
Why Write Life Business
Anywhere Else?
Why Write Life Business
Anywhere Else?
6
Making the Life Sale Easier
I
think most of the people reading this article know the value of life insurance, but many may struggle to convince clients of that value. That is not to imply that an agent is not a good salesperson, but there is reluctance that comes from a client when the topic comes up. Struggles may also come from getting them to upgrade from term. Fortunately, some of the additional benefits available in life insurance now increase the value of that life insurance policy. Here are a few key things to keep in mind when discussing life insurance:• Accelerated Benefits! The customer does not have to die to see the benefit.
3 Chronic Illness/LTC benefits gives clients access to the Death Benefit to cover the costs related to long term care
3 Critical Illness allows clients access to the Death Benefit for issues such as a heart attack, stroke, cancer or organ transplant 3 Terminal Illness benefits let clients take
advantage of opportunities to spend quality time with family and cover extra expenses • Cash Value Accumulation
3 With Indexed UL products now offering full No Lapse Guarantees and cash accumulation, clients can not only get long term guarantees,
but also have the benefit of accessing the cash build up for emergencies
3 Max funding life insurance for future tax-free distributions is more popular than ever. This is the latest vehicle to offer tax-free build up and tax-tax-free distribution • Single Premium Alternatives
3 For those older clients that don’t want to go through full underwriting
3 Living Benefits, Return of Premium, No Suitability, Premium Bonus
The alternative options for Life Insurance are ever changing and expanding. Keep these alternatives in mind when talking with clients; you never know when one of these options will be the catalyst to making the sale. If you are using products without these added benefits, give us a call to discuss the possibilities.
AL STOCKWELL MBA, FLMI
Life Marketing Director 800.747.5612
Davis Life Brokerage – What’s
Happening Now and What’s Ahead?
If
you have been paying attention to the Long-Term Care markets for any period of time, you know that more than a few carriers have either left the business or the carriers still standing have made dramatic policy changes that are not for the benefit of your clients. From 2009 thru 2012 the Long-Term Care market saw Unum (2009), Allianz (Nov. 2009), Guardian (Feb. 2011), MetLife (Dec. 2010), and Prudential (March 2012) all exit the traditional Long-Term Care marketplace.Added to the carriers exiting the marketplace, there is a very serious issue of rate increases on already in-force policies. Typically, claims experience is the culprit for rate increases, and that has certainly been a valid reason. However, a major factor for rate increases in today’s marketplace is not just claims. The historically low interest rate environment that our country has been experiencing for an extended period has made an impact on the reserves for Long-Term Care policies.
How bad can these rate increases be? A 90% increase was proposed by a prominent carrier in Texas. Can your clients afford to pay up to 90% more in premium costs? Alternatively, would your clients be interested in options that provide guaranteed premiums for the life of the policy and flexibility on how the benefits can be used?
That brings up the question, aside from self-funding, what options are still available in the marketplace? Linked Benefit products on the life and annuity side of the business to the rescue! Whether clients are seeking flexible premium or single premium, guaranteed issue or simplified issue, or fully underwritten policies, these products offer the peace of mind to your clients that what they are purchasing today will be there tomorrow.
With the rest of the Long-Term Care market as a backdrop, the Linked Benefit options are simply brilliant and available as single pay or flex pay:
• Total Outlay – Clients spend what they will
spend. Once they have completed the scheduled premium payment period, the carrier cannot come back to your client for more money, period!
• Return of Premium – Even if the carrier could
raise rates, the ROP feature in these contracts allows your client to walk away with all premiums paid to date, versus the nothing a client walks away with from a product such as the one with the 90% premium increase in Texas.
• Death Benefit – Somebody benefits from these
contracts, no matter what. The “life, die, or quit” feature is incredibly powerful in this marketplace. The obvious solutions for your clients that want to be self-sufficient, regardless of net worth, are Annuity and Life based Linked-Benefit contracts. The peace of mind that these contracts can provide is invaluable.
Give Davis Life & Annuity a call to get additional product information.
DAVID BIEDE
Life, Annuity & LTC Marketing Executive 800.747.5612 David@DavisLife.com
9
What About Your Financial Future?
While we all work to help people plan for their retirement futures, little time is spent on planning for our own. It is the age old story of how the cobbler’s kids have no shoes, and I wanted to help you spend a moment to ponder:
Have you thought of using a trailing commission option every once in a while to keep a stream of income flowing even when your monthly sales haven’t been what you wanted them to be?
Have you purchased enough annuity and life products for yourself and your family to ensure the health of your financial future?
Have you considered expanding your skill set to include other types of products or services
that can help to bring in more premiums?
Will the E&O coverage that you have cover you even after you retire? Remember, E&O coverage is about when the claim is filed, not when you wrote the case.
As your Financial Services Partner…for Life, We Can Help You With All This and More.
LUCY IRVING
Annuity Marketing Executive 800.747.5612
10
A Unique Opportunity for the Unique
Producer
At
Davis Life and Annuity, it is one of our top priorities to be consistently looking for new, innovative opportunities for our producers to expand their business. We have recently collaborated with Fiduciary Partner Network (FPN) to bring a new, five-step trust review process to the market place. This process is specifically designed to identify and resolve policy issues on contracts owned by Irrevocable Life Insurance Trusts (ILIT). The policies owned by these trusts typically have a face amount of greater than $1 million with a first year target premium of $30,000-$50,000. This historically low interest rate environment combined with longer life expectancies has increased the need for the policies to be more carefully monitored. Additionally, the fiduciary responsibility the trustees possess with these policies makes it critical that a controlled procedure be in place for policies to be reviewed. Without this critical element, it opens the trustee to liability of the entire face amount of the policy. The majority of small community banks currently use an in-house, non-actuarial review process that widens the door for this liability. We have identified a problem and solution they may be unaware they have.“Between 1982 and 2006, carrier
non-guaranteed ‘current’ crediting
rates for in-force universal life
policies have declined from the
12% level to the 5% level.”
(Source: 2006 TOLI Portfolio Statistics, Fiduciary Advisor Series 5, January 2007.)
Resource Insurance Consultants (RIC)
performs step one of this five-step process
RIC is an independent, third party policy reviewcompany that has performed over 100,000 reviews since 2001. First, using an actuarial accredited review process to evaluate key performance indicators, RIC can determine if a policy is considered at-risk for underfunding or competitiveness. They currently hold contracts with 11 of the top 15 banks in the United
States to use this process. If a policy is considered at-risk or shows signs of deterioration, step two, Market Evaluation, is performed. FPN uses Davis Life and Annuity to determine if there is the possibility of modification or replacement. The Market Evaluation then rates the potential improvement of the policy through remediation by assigning a Market Viability Rating™ (MVR), step three. Polices with a “favorable” or “substantial” MVR are released to a trained FPN Member for completing step four, remediation. Afterwards, RIC completes a final third-party risk analysis so the trustee can document the exercise of their fiduciary responsibility, thus completing step five. What makes this process unique to competitors
out there offering similar services? After much market research, we found a majority of companies offer a solution to individual parts of the fiduciary responsibility for the trustees. They will either offer a review process or remediation services to modify or replace the policy, but not both. The RIC/FPN process offers a total policy solution for trustees to fulfill their fiduciary responsibility to ILIT policies.
So, how do I get involved and
where do I fit into this process?
We are actively seeking highly motivated, very experienced life producers who have ILIT or trust experience and looking to expand their business. The agent must have the ability to gain relationships with banks, trust companies, or anyone named as a trustee on an ILIT policy. If you meet these qualifications, want to expand your business and want to learn more call your marketer at Davis Life and Annuity today.BRIAN DAVIS
Annuity Marketing Executive 800.747.5612
11
Your Financial Services Partner … For Life and Annuities!
www.davislife.com
Home Office: 800-747-5612 | dlb@DavisLife.com | www.DavisLife.com
If you are in need of a company you don’t find on the list, please contact us. We are contracted with several companies that don’t appear.
caRRieR a.m. BesT RaTiNG* PRodUcTs
Allianz Life Insurance Company ...A Excellent ...Life, Annuities American Equity Investment Life Insurance Company ...A- Excellent ...Annuities American General Life Insurance Company ...A Excellent ...Life, Annuities American National Insurance Company ...A Excellent ...Life, Annuities Assurity Life Insurance Company ...A- Excellent ...Life Athene ...B++ Good ...Annuities AVIVA Life Insurance Company ...A Excellent ...Life, Annuities AXA Equitable Life Assurance-MONY ...A+ Superior ...Life Banner Life Insurance Company ...A+ Superior ...Life EquiTrust Life Insurance Company ...B++ Good ...Life, Annuities Fidelity & Guaranty Life Insurance...B++ Good ...Annuities Great American Life Assurance Company ...A Excellent ...Annuities Guggenheim ...B++ Good ...Annuities ING Life Insurance & Annuity Company /
ReliaStar Life Insurance Company / Security of Denver ...A Excellent ...Life, Annuities John Hancock Life Insurance Company-ManuLife Ins. Co. ...A+ Superior ...Life Lafayette Life ...A+ Superior ...Life Liberty Bankers Life Insurance Company ...B- Fair ...Annuities Lincoln Benefit Life Company ...A+ Superior ...Life, Annuities Lincoln Financial Group ...A+ Superior ...Annuities Lincoln National Life Insurance Company ...A+ Superior ...Life Life Insurance of the Southwest (LSW) ...A Excellent ...Life, Annuities Minnesota Life Insurance Company ...A+ Superior ...Life Metropolitan Life Insurance ...A+ Superior ...Life
Mutual of Omaha-United of Omaha ...A+ Superior ...Life, Annuities, Med Supp National Western Life ...A Excellent ...Annuities
New York Life ...A++ Superior ...Life North American Company for Life and Health ...A+ Superior ...Life, Annuities Phoenix ...B+ Good ...Annuities Principal Life Insurance Company ...A+ Superior ...Life, Annuities Protective Life Insurance Company ...A+ Superior ...Life, Annuities Prudential Insurance Company of America ...A+ Superior ...Life Sagicor Life ...A- Excellent ...Life, Annuities Savings Bank Life Insurance Company ...A+ Superior ...Life Standard Insurance Company of Oregon ...A Excellent ...Annuities Symetra ...A Excellent ...Life Transamerica Occidental Life Insurance Company ...A+ Superior ...Life Unity Financial Trust ...B++ Excellent ...Funeral Trust Zurich ...A Excellent ...Life
* All ratings reflect Financial Strength and are current as of 6-4-13. A.M. Best ratings for insurers’ financial strength and credit quality of obligations range from A++ (Superior) to F (in liquidation). ** A+ (Superior) by A.M. Best, the 2nd highest of 13 active company ratings for financial strength.
AMR211-0906 06-406 IIC241-0906 LM-1825 CNS107-0906 A85-0906
There Are More Solutions to Expanding Your Practice Inside!
What’s Inside
• A few key things to keep in mind
when discussing life insurance.
• Consider this: All clients
aside, how well do you know
your own financial future?
• LTCI Outlook:
What options
are still available in the
LTCI marketplace?
800.747.5612
dlb@DavisLife.com
DAVIS LIFE
B R O K E R A G E
3737 Woodland Ave • Suite 600 West Des Moines, IA 50266-1934
YEAR END EDITION 2013
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