Set Proper Expectations and Place Your Cases

Mia Dempsey, Manager New Business


Life insurance is about protecting the things that are important to your clients. When considering life insurance, you must think about the health of the applicant. An initial review of any adverse risk(s) will help determine insurability and allow you to set proper expectations for your clients.

Want to show a client instantly what carriers may be able to offer based on their build, blood pressure, cholesterol, tobacco use, family history, and/or driving violations? Visit the Life Department page on the Producer Portal and Run a Term Quote. At the bottom of the page select ‘Enter Health Profile’ to access this quick and easy tool.

Have a client with more a complicated risk or multiple risks? Use our Health Screening Questionnaire to complete the initial review to uncover those risks. We have 125+ specific health questionnaires to then assist you with getting all the answers the underwriters will need in order to provide a tentative offer for your client. This is completely confidential for your clients, so if a carrier determines they cannot offer coverage there is nothing added to the clients MIB. The response rate for this deeper dive is only 48-72 hours.

Contact your dedicated case manager today for more details and let us help you get those hard to place life cases approved (888-303-8755)

Why Doesn’t Every Person Own One of These?

Josh VerHoeve, VP Annuity and Life Distribution


What savings and income investment vehicle exists where you are able to save $1,000 a month for ten years, and have that investment pay you back $1,000 a month in income  for the rest of your life, 100%  tax free?* Fixed Indexed Universal Life (FIUL) is the one product that can do that for you. I ask myself constantly, “Why doesn’t every single person own one of these?”

In addition to tax-free income, FIUL as a savings and income vehicle also provides you with a death benefit which would pass on to your heirs 100% tax-free. It also provides additional tax-free living benefits if you get sick with a chronic or terminal illness.

The average top tax rate in the United States the last 100 years, is nearly 60%**. We’ve had periods of time in history with tax rates over 90%. Yes, you read that correctly…90%!  Government spending and the National Deficit have grown at a rapid rate in the year 2020. Given our national debt and our current historic low tax rates, we would be ignorant to not think about taxes increasing in the near future. However, for same reason, savers in America continue to max out their 401(k) contributions. 401(k)s currently hold over $5.5 trillion in assets and make up almost 20% of retirement assets***. This leads me to believe that we are acting differently than we believe. Yes, 401(k)s allow you to save on taxes today, but by doing so you are taking serious risk on taxes in the future. The only time you know how much of your 401(k) belongs to you is when the government tells you how much belongs to them.

So I circle back to my question, “Why doesn’t every single person own one of these”? First, FIUL is not liquid in the early years. You do need ten years or more to make it work well. But, aren’t 401(k)s generally even longer term investments? A 35 or 40 year old saving in a 401(k) cannot access funds until age 59 ½.  Maybe the other answer is that you have to qualify medically. Yes this is true, but with streamlined and accelerated underwriting, medical requirements have become less of a tedious process for an advisor or client. I think the answer to this question is quite simple…Education. Not enough savers are aware of FIUL. When you start your first job out of college, there is a pretty good chance you are introduced to a 401(k), but a much smaller chance that you know what FIUL is. This means it’s our job to educate prospects and clients on how FIUL can secure their retirement income. And since we find ourselves here in September, which is Life Insurance Awareness Month, if there was ever a good time to educate, now is that time. Finding an IUL prospect is the easiest prospect to find. Ask your client one simple question, “Do you contribute to a 401(k)?”. If that answer is “YES” then you are looking at your next sale.

Don’t forget to ask for a Planning Compass tutorial from one of the Asset Life Team Members, which helps you compare 401(k) benefits to that of an FIUL.


*45 Male Std NT saving $1,000 per month for ten years projected tax-free income of over $1,000 per month from age 56 for the rest of their life. Note that at younger ages, the income benefit can be higher, assumes a 6.00% rate of return during savings years and 5.50% during income years, both less than any 10-15-20-30 year historical.

** TaxFacts.com

*** Source www.ici.org

Limited Time!! CARES Act Sales Opportunity

Bruce Beaty, RICP, VP Asset Business Consultant


It’s interesting how Life Insurance has evolved into a “multi-tool”.  Most of what we see this month is focused around the most well-known feature of life insurance, which is the death benefit.  However, we have seen life insurance used in a plethora of other applications. Deferred compensation, tax-free retirement, an alternative solution to traditional long-term care, a college funding vehicle, a get-out-of-debt strategy, a store of value, and a creditor protected safe haven.  We have seen uses that allow it to act as a proxy for disability and a wealth transfer vehicle.  We see parents pay premium on kids’ policies and the other way around.  Corporations buy it, business partners buy it, and banks buy it too. We used to even see strangers owning life policies on others.  We see banks lending the premium and companies being the beneficiaries.  So not to beat a dead horse but….

Life insurance is very flexible and can be used to fulfill many visions and goals.  Today we have a new option available designed to help clients get through tough times.  The Cares Act allows our pre-59 ½ clients to pull money out of an IRA or other qualified account and forego the pre-59 ½ ten percent penalty (excise tax). They can also spread the tax impact over three years (or pay it back).  This reminds me of when we could do a Roth Conversion and spread the taxes over three years.  I’ll bet many who didn’t take advantage of that opportunity wish they would have. 

The article, “Have You Opened your Gift from the CARES Act Yet,” by producer, Jay Beattey, explores a new resource that may be available to your clients for a limited time only.  Perhaps it’s time to rectify an overfunded 401(k) situation for your clients, to create a tax-free bucket, and/or to create leveraged death and living benefits?  Looking for a source of funding for a Kai-zen?  This may be your solution.  Ed Slott is calling Life Insurance the new Stretch IRA.  Maybe it time to explore the full range of diverse applications  that the “multi-tool”, known as life insurance, offers, and also time to check out the power of de-funding the over funded 401(k).  You have until 12/31/2020 so don’t wait!  Make sure you explore the Asset Exclusive Planning Compass to assist in comparing your options, or give our knowledgeable life team a call to discuss options and case design for your clients (888-303-8755 x2160). 

New Rules for Illustrations vs. the Real World

Jeffrey Stemler, Sr. VP Advanced Planning


The NAIC has long been charged with providing regulations regarding illustrations that project Life Insurance policies’ potential outcomes. The NAIC is very concerned that illustrations show realistic assumptions as to possible/likely outcomes. For those of us who have been in the industry for a while, we’ve experienced numerous changes and modifications to the illustrations we present. More changes will be going into effect November 25th of this year.

It should be noted that the changes have no effect on how the policies function, just how they are illustrated.  The changes are contained in AG49A and can be summarized as follows:

  • The current spread between illustrated crediting rate and policy loan rate will be decreased from 1% to .50%.
  • All riders/options will still be available including those that provide multipliers, however they will not be taken into account for creating the illustrations.

At this time, these changes will not apply to inforce illustrations.

What does this mean?

For the consumer, anytime you make illustrations more conservative you increase the chances that the projection of possible returns are understated and actual results will be greater.

For the producer, the answer varies. If the producer’s only approach to making a recommendation is to highlight the rate of return, he/she will be disappointed. The projected results for income will be reduced.  How much is not confirmed yet, but a reduction of 45% would seem possible – this is without companies coming out with new products or riders. We know through discussion with carriers, policy changes are on the way that are designed to show increasing payouts, while complying with the AG 49A regulation.

The real question is, how will IULs fit into the real world with other investment choices when we take into account the real threats to our retirement funds.

First we have to identify the key issues:

  • Many economists agree that taxes must be increased because of the National Debt. What is the impact on our retirement due to increased taxes and how do we prepare for this possibility?
  • A standard investment portfolio often contains a mix of stocks and bonds which are subject the gains and losses in the market. Economists point out the sequence of returns has a huge impact in the first few years of retirement. The exposure is not if the market goes up but if it declines. The reason declines can be so devastating is that if you need a “constant” withdrawal amount to meet expenses, you’re cannibalizing your account with no way to replenish the funds because you aren’t working.
  • Another issue that is raising its’ head more often is, the most popular qualified plans – 401(k)s and IRAs cannot accept enough contributions to fully fund a high income earners retirement.

Since illustrated rates are going to decrease significantly, will overfunded IULs still be viable compared to other investment alternatives? The answer is “YES”.

Remember, the product is not changing just the illustrations. Allianz, for example, is working on how to explain the impact of purchasing the 40% multiplier on future income payouts from the policy.

However, to begin the decision process for determining investment choices, this discussion needs to start with comparing each investment’s attributes.

Whole Life InsuranceNon-Qualified Investment PortfolioQualified 401(k)Overfunded IUL
Tax-Deferred GrowthYNYY
Tax-Free DistributionYNNY
Competitive ReturnNYYY
High ContributionsYYNY
Additional BenefitsYNNY
Collateral OpportunitiesYYNY
Safe HarborYNYY
No Loss ProvisionsYNNY
Guaranteed Loan OptionsYNNY
Unstructured Loan PaymentsYNNY
Liquidity, Use and ControlYYNY
DeductibleNNYN

Overfunded IUL is the only investment choice that covers all three of the key elements affecting a successful retirement:

  • Taxes upon distribution
  • Losses due to the market
  • Contributions based on how much you can afford

Bottom line, if we stay focused on the issues to be solved, overfunded IUL will continue to be an integral part of retirement income planning.