Community Webinars Sales Opportunities in Life & Annuities - An Introduction to Quick Life Presented by: George Fraser Director of Annuities Quick Life

 Presents Monthly Webinars Free to Community Members  Community webinars are archived on the Community homepage under the right hand tab titled: Webinar Archive  Community University provides webinars that qualify for CE in several states.

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 George Fraser has over 40 years of Life and Annuity sales experience. In that time, he has acted as an agent, General Agent and Vice President of Retail Sales for leading Insurance providers.  George has served as National President of GAMA International, Chairman of the Board for AMTC as well as committee work for LIMRA. He also serves as a Director for Rainmaker Advisory LLC a leading consulting firm within the retail insurance broking sector.

 Sales Opportunities in Life Insurance  Sales Opportunities in Annuities  How to Sell and Increase your Profits in 2012  How you can be in the Life Insurance business without having to set up a support structure

Protect Families with Dependent Children Estate Planning Gifting Programs Wills and Trusts For the More Sophisticated Client

Challenges:  Most employer based group programs only cover 1 x 2 times annual income  Most families today relay on two incomes  Average employee changes jobs 7 times, no continuity of coverage  Conversion plans very expensive  Most families have no emergency savings

Solutions:  Costs for life Insurance are one half of what they were 20 years ago  To replace a 60,000 a year income would take 1,000,000 at a 6% withdrawal rate  The cost for 1,000,000 of 20 year term for a 35 year old male is $485

 Individual coverages are not employer dependent  Two income families require coverage on both spouses  Automatically include low cost term coverage as part of the renewal process

1. To provide liquidity to pay potential federal and state tax obligations  Starting in January of 2013 under current law tax rate will be 55% on estates In excess of 1,000,000  Many estates have assets tied up in real estate, business interests and fixed investments that are not liquid and would incur investment loss under forced liquidation

2. To provide estate equalization  Allows families to divide estate assets equally without having to liquidate the asset  Allows families to target specific family members without endangering a business 3. To provide income to a family while estate is being settled 4. To pay off estate liabilities outside of taxes

 Allows families to make specific gifts to endowments or charities  Allows families to make gifts to grandchildren or other relatives  Allows a family to set up a foundation to direct money to charities helping to reduce estate tax liability

 Helps eliminate double taxation of estate assets  Allows purchase of Life Insurance to be kept out of gross estate  Can provide ongoing income for successor generations

Two types of funding agreements Cross Purchase and Entity Plans 1. Cross purchase agreements are typically used for partnerships that do not exceed three partners or in situations where the business may be sold at a later date and cost basis becomes important 2. Entity Plans are used with multiple ownership beyond three or In situations where the estate is going to redeem stock to pay estate settlement costs

Cross Purchase Plans  Each partner agrees to purchase the other partners interest at death or retirement  Purchase price can be agreed on at time of agreement or a evaluation method can be established  The agreement can be funded or unfunded

Cross Purchase Plans 1. Unfunded agreements are paid out of current earnings at the time of death and are a taxable event 2. Unfunded agreements can cause a strain on cash flow 3. Funded agreements with life insurance provide tax free funds to execute the agreement 4. Funded agreements can provide an accumulation to retire a partner

Entity Plans  Corporation purchases the decedents interest at time of death or retirement and retires the stock leaving the remaining partners as holders of all outstanding shares  Commonly used when you have multiple partners

 Under section 303 has some estate tax advantages to estate of deceased partner  Remaining shareholders do not get a “stepped up” basis on the decedents share

Entity Plans Can be funded or unfunded 1. Funds may not be available for the future purchase if unfunded 2. If unfunded money for purchase is after tax funds 3. Funded agreements with life insurance provide tax free money for purchase

 This is coverage written to indemnify a company against the loss of a key employee. There are several reasons for this type of coverage  Loss of the employee would incur a loss of revenue  A bank may require this in return for certain types of lending to the company  Used to provide funds for replacement of a key employee

 A key employee is part of an long term succession plan and their loss would undermine the plan  A life Insurance policy is used to provide tax free funds to the company

 Deferred Compensation plans are an agreement between an employer and employee to pay out funds at a future date  Deferred compensation plans are typically used in C corporations  Deferred compensation plans do not offer current deductibility to company, but employee money is tax deferred  Company can be discriminatory on who it covers in the plan and how much they contribute

 Plans do not require 5500 annual filings or ERISA filings although an initial letter of notification is required  Plan must have substantial rights of forfeiture  When paid out funds are deductible to the employer and reported as income to the employee  Deferred compensation plans have substantial balance sheet advantages to an employer  Can be funded or unfunded

A Section 162 Bonus Plans is a non-qualified plan in which an employer gives a bonus to an employee as a supplement for their retirement. The bonus is tax deductible to the corporation and reported as current income to the employee. The employer can also bonus the tax amount due.  Almost always funded with Life Insurance  Funds accumulate tax deferred  Can be taken out tax deferred at retirement  Can be discriminatory  No ERISA filings  No 5500 annual filings

An annuity is a contract between an Insurance company and an annuitant to accumulate funds which are paid out at a later date either in a lump sum or in periodic payments  The money accumulates on a tax deferred basis. No current income tax is paid on the earnings  When the money is taken out the first distributions are considered gain  If annuitized the annuitant can receive a lifetime income even if the initial funds are depleted  Modern riders allow for withdrawals with the potential of protecting principal

A fixed annuity where the annual crediting rate is pegged to a stock index  Does not require securities licensing  The value can go up, but never down  Some products pay a bonus to the annuitant up front. These bonuses range from 5-10% depending on the carrier. The bonus is immediately credited to the cash value of the annuity

 This product is particularly attractive to individuals approaching retirement who want a hedge in their portfolio  Individuals who have accumulated money in an IRA who are concerned about conserving principal with a return that could keep pace with inflation  People who do not have large sums of retirement funds and because of age or other factors want to avoid market risk

The Reasons are Many!  Everyone recognizes the value of cross selling to increase top line revenue from their existing book of business, yet in most agencies this does not happen.  How do you get company appointments.  Who are the competitive carriers?  How do I create a back office to assist me in quoting and underwriting these products.

 What are some common problems that individuals and business owners face that these new products would provide solutions.  How am I going to find the time to sell and service these new products.

The Quick Life platform creates an instant back office for a producer with no cost  Quick Life will help facilitate all company appointments needed to sell the top carriers products  The Quick Life quoting platform illustrates and compares all of the competitive term products in the state a producer does business in  If a producer has knowledge ahead of time that a prospective client has a particular health issue it will only quote those carriers who have competitive underwriting for those conditions and the possible rates they will charge

The Quick Life platform eliminates underwriting time and producer involvement in the application and underwriting process  Part one of application can be taken over the phone and downloaded to the Quick Life website  Quick Life arranges the medical exam and orders all attending physician statements  Quick Life secures all client signature requirements through the paramedical examiner  If underwriting issues arise Quick Life will shop the coverage to other carriers  When a policy is issued Quick Life will send the policy directly to the client or to the producer

This user friendly platform lends itself to cross selling programs that do not involve large time commitment on the part of the P&C producer  Eliminates time on the part of the producer to travel to client to sell and secure applications  The platform could be operated by a CSR in a producers office eliminating need to find an outside producer to sell and service business  Could become an automatic part of the agencies renewal process

 Through Quick Life concierge program clients could be driven to a website that requires no producer involvement, but will still receive a commission  Quick Life director available to work with agency to customize a marketing program for them

Insurance forms and endorsements vary based on insurance company; changes in edition dates; regulations; court decisions; and state jurisdiction. This instructional materials provided by Insight is intended as a general guideline and any interpretations provided by Insight do not modify or revise insurance policy language. The authors of these materials are Quick Life and Insurance Community Center. In providing these materials neither Quick Life nor, Insurance Community Center assumes any liability or responsibility to any person or business with respect to any loss that is alleged to be caused directly or indirectly as a result of the instructional materials provided. Copyright 2010 – 2012 All Rights Reserved

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