How to Avoid Litigation & Policy Valuation Richard L. Harris, CLU®, AEP®, TEP, Managing Member, Richard L. Harris, LLC

Getting Sued Is No Fun It will take an emotional toll It may affect your business It may affect your life You will not be happy with the result

How to Get Sued Be greedy Large case Client from hell Do the wrong thing Rely on someone else who is an "expert"

Lawsuit Issues Premium finance Replacement Equity index universal life Part of an estate plan

Premium Finance Candidates Wants or needs the insurance Is very very financially sophisticated Has an exit strategy (usually short-term financing) Client's advisors are part of the process

Premium Finance Problems Someone worth $5,000,000 or more is automatically a candidate Just because you can doesn't mean you should Does not have need for the amount of insurance or for permanent insurance Comparisons inappropriate or not done at all Client lacks financial sophistication Client's advisors not in the loop Exit strategy involves renewing the loan and having it paid off either from policy values for at death of insured

Premium Finance Problems Don't know yourself Haven't established the need Don't get detailed illustrations both of other insurance options and what can go wrong Rely on premium finance "expert" Some people see lawsuits as a cost of doing business

Equity Index Universal Life Few understand it It is NOT a way to get equity upside while avoiding downside Carrier illustrations have been misleading and/or wrong – make assumptions that won't happen Carrier options re cap rate, participation rate, floor rate, expenses and cost of insurance John Hancock Rate Translator or SFSP Software

Replacements Make sure all comparisons are apples to apples and accurate Make sure you have shown ALL the relative comparisons Make sure you understand the client's goals Have client's advisors involved

The Carriers It's not a question of whether the carrier will do something they tell you they won't do It's more a question of how much premium is involved for the carriers to become more "understanding" Because the carriers have "approved vendors" they recommend doesn't mean that the carriers have really vetted the people and/or the program If a carrier wants an insured to sign a "hold harmless" agreement – BEWARE

How to Protect Yourself Do the right thing If you don't know find an independent expert who does If you can't get a satisfactory explanation that you understand don't do it Beware the client from hell – walk away If it sounds to good to be true…

Thank You Richard L. Harris, CLU®, AEP®, TEP, Managing Member, Richard L. Harris, LLC