I regularly read financial articles before I start my workday, or late at night when I can’t sleep, which occurs more and more as I grow older. And why not? Is there a better remedy for insomnia than a boring financial advice article?
What is disappointing is when I see an article that I feel that I absolutely must call out, not as much for the inaccuracy, but for the oversight. The most recent example of this is an article titled “6 Types of Retirement Income That Aren’t Taxable” by John Csiszar which appeared on GOBankingRates.com on December 10, 2022. Mr. Csiszar is both a Certified Financial Planner (CFP) and a Registered Investment Advisor (RIA), and according to his bio in the article, is also a licensed life agent with experience in a Wall Street wire house and has his own investment advisory firm. He manages over $100 million of client assets “while providing individualized investment plans for hundreds of clients”.
The author’s intentions and, frankly his guidance, are great as he spells out and discusses his list of tax-free retirement income options as follows:
In item number 6, Mr. Csiszar states that “like an inheritance, waiting for a life insurance [death benefit] payout isn’t an ideal strategy for funding a retirement plan” and I could not agree with him more. HOWEVER, using tax-free distributions from life insurance policy account values is NOT even mentioned as an option in the above list!
There is no other asset like life insurance as part of a well-thought-out financial plan and yet, many financial advisors, such as the author of the aforementioned article are loath to mention it. Why?!
I could pontificate and make a whole list of objections such as:
Let’s get over these objections, because at the end of the day, as highlighted in the Ernst and Young (EY) study from October 2022, life insurance, as part of a holistic financial plan can provide meaningful benefits to young families, mid-career men and women, pre-retirees and retirees. The earlier that individuals start with their planning to include life insurance, the more effective their plans will be.
Please contact AgencyONE’s Marketing Department at 301.803.7500 for more information or to discuss a case.
A quick policy review might be just the gift that your clients (and you!) are looking for this holiday season. Take just a couple minutes to read how a brief inforce policy review turned into two applications for over $250,000 of premium for our AgencyONE 100 Advisor.
Mr. and Mrs. Snow both had indexed annuity contracts crediting a fixed rate of 1% for the upcoming policy year with an S&P 500 cap rate of 1%. In other words, policies that are not competitive in today’s marketplace. With fixed annuity rates more competitive than they have been in many years, there is no reason for your clients to be missing market upside with a policy that credits only guaranteed minimum rates. The AgencyONE 100 Advisor presented two alternative options for his clients to consider:
Mr. and Mrs. Snow ultimately chose option two and submitted applications for policies that will significantly improve their position heading into the new year. Because they are still in the accumulation phase of their retirement journey, a new 5-year surrender period was an acceptable tradeoff for moving to a more competitive policy; the decision to 1035 exchange their current policies was an easy decision to make and the ultimate gift to themselves!
If you have clients with inforce annuity contracts, (old Genworth policies or maybe those with a carrier who has pulled out of the market in past years) take this opportunity to contact them now. If you do not, you may be leaving money on the table, and more importantly, leaving your clients in contracts that are not competitive. Give your clients – and yourself – a gift this holiday with this easy annuity replacement opportunity.
Please contact AgencyONE’s Annuity Department at 301.803.7500 for more information or to discuss a case.
Did you know that AgencyONE can help you with your life settlement cases? As a result of a strategic relationship AgencyONE has with a premier life settlement broker, AgencyONE is uniquely positioned to help underwrite your client’s medical file and help the life settlement broker build the case to try and achieve the most value for your client. This ONE Idea will discuss what is happening in the life settlement market and how AgencyONE can provide value.
The early years of the Life Settlement markets were plagued with inefficiencies and poor regulatory oversight which resulted in a Wild Wild West environment of pricing and manipulation. State insurance departments stepped in to institute the much-needed regulation which has helped to increase transparency and the ethical handling of such transactions. As the industry has matured, so has its efficiency and its reputation. In fact, insurance commissions nationwide now believe that a financial advisor should consider a life settlement option as part of the due diligence process before a replacement, lapse or surrender. It is in the client’s best interest to consider all options!
That being said, the Capital Markets have taken notice of the improved efficiencies and tighter regulatory oversight. The investment community has embraced life insurance settlements with fixed premiums and guaranteed death benefits as a non-correlated asset that we know will ultimately pay a claim. While the stock markets may go up and down, the life insurance policy is a stable asset within any investment portfolio. More investment capital sources have realized the true value of a non-correlated asset block so demand for policies remains high. This in turn translates to a customer service value proposition.
Clients over age 65 with face amounts of $150,000 or more generally fit into the basic guide for life settlement consideration. The INFORCE illustration guidelines should be shown to “run” to age 105 with low-level premium payments. This structure helps the Provider/ Buyer (the guys with the checkbook) determine cash flow needs and expected returns on their investment in the contract.
1. Policy premiums are too expensive and/or contract not performing
2. Policy is no longer needed
3. Liquidity needs
4. Revisions in tax laws or ultimate purpose of the protection have changed
5. Business Insurance needs changed
6. Existing Term is approaching maturity and conversion is too expensive
7. A 10-35 replacement is being considered and trustee is obligated to consider life settlement exchange option as a fiduciary of the trust value
The reality is that if you do not talk to your clients about life settlement, he or she may find someone else, possibly through a basic internet search or TV commercial, that is marketing directly to consumers. Please note that in this situation the policy buyers’ interest is rarely aligned with your client’s.
Through AgencyONE’s strategic life settlement relationship, we are able to work on behalf of the advisor and client to find the RIGHT buyer offering the best possible price for the policy. In this case, the policy buyers’ interest is in direct alignment with the client or the seller of the policy.
The full-service life settlement brokerage firm that AgencyONE has a strategic relationship with has over 20+ years of industry experience and delivers innovative planning solutions and unparalleled value to your clients. This firm understands that clients’ needs evolve over time and that an exit strategy using a life settlement is a very valuable tool to use when warranted. They also maintain important ties with the nation’s largest and most reputable life settlement funds and are considered experts in the field.
Lets look at a few life settlement case studies and the extraordinary value that has been provided to AgencyONE’s advisors and their clients recently:
The client was a 95-year-old male in perfect health with a Second-to-Die contract and a wife who predeceased him. The policy was a $1M UL with a cash value of $139K and a $286K cost basis. The policy was initially funded with a lump sum 10-35 and was only expected to last another 2 years.
The gross offer for the policy was $545K and it was ultimately sold using a fund that did not require life expectancies. The expectations of the client and the advisor were well exceeded.
The client was a 65-year-old male with 3 policies that totaled a $6M death benefit. The client intended on surrendering the contracts until his advisor explained that a better and more profitable way to dispose of the policies might exist. AgencyONE confirmed that the client “fit the box” and met the basic criteria for a life settlement consideration.
The case required a complete medical file which was quickly gathered by AgencyONE and included HAPI records (those gathered using Human API). Life expectancy reports were ordered by our strategic life settlement partner in Philadelphia on a rush basis and the bidding war began.
The initial $1.6M offer was ultimately negotiated UP to $2.52M gross and the proceeds were transferred to the client within 7 days of signing the closing documents. This case took a little less than 3 months from start to finish and again, the client and the advisor expectations were far exceeded!
The VALUE (what the policy is worth) is based on a number of factors, but client Life Expectancy calculations are the most important. A shorter life expectancy translates to less premium payment outlay for the buyer and a shorter-term investment in the policy overall. For the most part, the investment community is primarily interested in life expectancies of less than 15 years. Basic math would tell you that if the client is currently age 75 with a normal life expectancy of age 90, then a 15-year premium payment period should be expected before the maturity (the death claim) might occur. This is a long time period to tie up investment capital so shorter life expectancies generate higher interest and more competitive bids. It is extremely important to realize that PREMIUM PAYMENTS must continue to be made by the BUYER of the contract. From the CLIENT perspective, this policy remains INFORCE and must be reported by the client on any future life insurance application.
Whether the case involves building medical files or working closely with our strategic life settlement relationship to negotiate a maximum settlement price, AgencyONE is uniquely positioned to help you with your life settlement cases. We are also happy to host webinars or team calls to discuss life expectancy importance and how life settlements work.
Pick up the phone…give us a call….and please remember, a life settlement today can offer a RETAINED death benefit component instead of a 100% sale of the death benefit protection. It’s all about the price!
Please contact AgencyONE’s Marketing Department at 301.803.7500 for more information or to discuss a case.
Now that Q4 is in “full swing” and getting cases done for year-end is just 8 weeks away, we’d like to emphasize the importance of two aspects of the underwriting process.
SECOND—Client Education: Drop tickets are great tools but also relieve the advisor of filling out forms and obtaining data….and educating their clients on what to expect. Preparing your client for an Online underwriting experience, or telephone interview, or preparing properly for the insurance exam are STILL VERY IMPORTANT steps even with the accelerated process opportunities.
This week’s ONE Idea will focus on these two areas and how they help AgencyONE position your client’s case for the best possible underwriting consideration.
Securing the necessary facts early in the case evaluation process saves time. Your advance prep work also improves the chances for a successful outcome. Armed with ALL the necessary information upfront, AgencyONE can help minimize requests for additional underwriting requirements from the carriers and eliminate the “back and forth” that invariably causes delays AND negatively affects your client’s experience. AgencyONE knows you want to provide a seamless and uncomplicated experience for your clients. EDUCATING YOUR CLIENTS ON WHAT TO EXPECT engages them and results in a much smoother process for everyone.
AgencyONE has recently updated our Informal Inquiry to better obtain the information needed from your client to get them matched up with the right solution and carrier. Our revamped Informal is more specific, better organized, and easier to understand (find a copy of the Informal on your AgencyONE website’s personal Dashboard under “For Client Use” or contact AgencyONE for a copy). Your client’s Informal is very important, and its accuracy is crucial! Remember, we are happy to brand our Informal for your company – just provide us with your company name, contact info and high-resolution logo.
If your clients are prepared upfront about what to expect, the entire process will go much smoother for you and them and AgencyONE will be in the best position to advocate on behalf of your client should something unexpected occur.
Now that your client has “perfectly” completed the AgencyONE Informal package and you have a signed HIPAA, it might be time to just pick up the phone and CALL THE UNDERWRITING HOTLINE at AgencyONE. It may be that you can go right into a formal application, drop ticket or e-app instead of starting with an INFORMAL INQUIRY.
We’ve created helpful underwriting videos (check out and subscribe to our YouTube channel) entitled:
These videos were prepared as CLIENT FACING for your use. Viewing these videos, hearing the explanation of the process, and reading the corresponding print material in the Informal package will go a long way in preparing your clients. Statistics show that client engagement increases with the use of videos over the printed word, so please try to engage your clients.
Whether it’s your client’s medical records from their Doctor’s Patient Portal system or accessing lab results from the insurance exam, the information necessary for AgencyONE’s underwriters is literally a “click away.” AgencyONE created a one-pager that outlines how your clients can make ALL of their medical records easy for AgencyONE to access using the Human API (HAPI) Patient Portal. Our Informal package (page 5) also includes a step-by-step explanation on how a client can access their own carrier exam results. Both can be very helpful in possibly cutting down on APS record requirements and the copy service delays, both of which can affect the time it takes to process your client’s case.
Your education and encouragement will help your clients to be proactive in this process. Appeal to your client’s competitive nature. Tell them what they need to achieve – a cholesterol level of “X”, or a ratio of “Q”, or an A1C of 6.2 and an amazing thing happens. Because your client has a target – a goal – they are likely to engage in the underwriting process. Studies show that individuals who have access to their own medical records, including lab results, are more likely to actively participate in decision-making and protocols that promote positive outcomes. Communicating with your clients that they will pay less in premiums for their policy if they do well on their labs will very likely engage them further. The pocketbook is a driving motivator for most. Your clients recognize an economic impact through engagement!
AgencyONE’s Underwriters were presented with a Male, age 72, who resided in New York City and had medical records for retrieval at 3 different institutions. We utilized the Human API (HAPI) Patient Portal and received a total of 1136 pages of records in LESS THAN 24 HOURS! Record retrieval the traditional way WOULD HAVE TAKEN AT LEAST 6 WEEKS using a copy service and getting the necessary special authorization! Your clients can get their necessary coverage faster and you get your compensation quicker. TRY IT…. YOU AND YOUR CLIENTS WILL LIKE IT!
AgencyONE’s Underwriters received a phone call asking us to create a template of questions for the client to address. These answers gave us merit to proceed. Using a thorough and complete informal inquiry, AgencyONE received a combination of HAPI portal records, direct responses from physicians about the patient/ client, and requested physician clarification letters where necessary. The client was prepped for the exam which was completed with SUPERB blood and urine results. As a result, the client placed $5 million of protection inside a trust.
Encouraging your clients to be proactive in the underwriting process, including preparing for the insurance exam AND obtaining their records, will help AgencyONE show them in the best possible light AND distinguish your services from a competing advisor.
AgencyONE has the necessary resources and knowledge to assist you in preparing and engaging your clients for a smooth underwriting process that will result in achieving their insurance planning goals.
Please contact AgencyONE’s Underwriting Department at 301.803.7500 for more information or to discuss a case.
Have you ever had business owner partners or shareholders who varied in age and health? Have these business partners or shareholders ever asked you to explain why, for the same amount of insurance to fund their buy-sell agreement, the premium was so dramatically different? It happens all the time. If you have never heard of a Cross Endorsement Buy-Sell Arrangement (CEBS), read on because it presents an incredibly elegant solution for this otherwise inequitable situation.
Imagine a male, non-tobacco user, business owner who is 55-years-old and his 40-year-old female partner, also a non-tobacco user. They are both in excellent health. They are 50% partners in a successful $10MM business and, at the recommendation of their attorney, have asked you to quote life insurance to fund their Cross-Purchase Buy-Sell Agreement. You quote $5MM of 10-year term at Preferred Best rates as follows:
Female, 40, Pref Best NT = $1,123 per year
The younger female partner asks why she must pay so much more premium out of HER pocket to pay for the insurance on her partner – almost 6 times more; she does not see it as equitable to their partnership. But the story does not end there.
After underwriting the case, it is discovered that the male partner is not in very good health and the underwriting is negotiated at Standard NT. The premium is now $13,800 and the female partner is REALLY not happy. They need the insurance to fund the buy-sell agreement for their successful business. The female partner is now faced with the reality that her business partner’s health is fragile, but she wants a more equitable funding arrangement.
(If the male 55 owner were Table 2, the premium would be over $20,000, if Table 4, over $28,000 and if a standard nicotine user, over $40,000. The inequity can grow very quickly and exponentially!)
The Cross Endorsement Buy-Sell Arrangement requires the use of permanent insurance. In full disclosure, additional cash flow will be required, but the partners, especially the younger partner, will benefit greatly from this solution in the form of cash value growth. Let’s unpack this.
The typical cross-purchase agreements is most often used to benefit the surviving partner with a step-up in basis of the re-purchased shares after the death of a partner. This contrasts with a stock redemption buy-sell agreement where the business owns the insurance and redeems the stock of a deceased shareholder. However, a cross-purchase agreement presents several problems, including:
If a partner’s health deteriorates and the insurance is critical to personal financial objectives, the policy is owned by, and the beneficiary is, the other partner.
The Cross Endorsement Buy-Sell Arrangement is unique in that it allows each partner to own the needed insurance on their own life and always retain complete control of the policy. However, under the agreement, the owner of the policy endorses or “rents out” a portion of the face amount of the policy sufficient to meet the buy-sell obligation to the other partner\shareholder. See diagram below:
The rental charge/ premium is based on the economic benefit cost as measured either by the government or the insurance company rate table. This table is an increasing annual amount and is completely agnostic to:
With a Cross Endorsement Buy-Sell Arrangement, the premiums for each of the partners will be simply based on the difference in age – a far more equitable solution that does not penalize an otherwise perfectly healthy woman.
In the first year of a Cross Endorsement Buy-Sell Arrangement, the premium differential is just less than double (purely age based) as can be seen in the diagram below:
They immediately endorse the needed portion of the face amount/death benefit that is required to meet the agreed upon amount of their buy-sell agreement over to the other partner.
This amount can be modified on a year-by-year basis should equity ownership in the business change, including the addition of partners.
Depending on the funding desire, ability, or commitment of each individual owner, the cash value will grow accordingly. That is a personal decision as to how each partner wants to fund their own policy. It can vary greatly, depending on the product chosen, and range from the minimum guaranteed premium to the maximum non-MEC (Modified Endowment Contract) premium.
As an example, the 55-year-old male owner could fund his policy up to the maximum amount of $442,965 each year for 7 years. This would be offset by the “rental income” from the other partner each year, and result in a very meaningful cash value growth at age 65, 67 or age 70. Lower premiums could also be paid depending on the objectives and cash flow of the client.
Similarly, the 40-year-old female owner could fund her policy up to the maximum of $335,469 annually for 7 years, which would again be offset by the “rental income” from the other partner.
Another important benefit of a younger partner setting aside funds in this manner is that it provides for liquid cash to help her fund a lifetime buy-out of her partner should he decide to retire or sell a portion of his shares to her. For example, as seen in the adjacent table, the female partner’s cash value growth using an Index Universal Life product for illustration purposes, would be $3,765MM in year 15, her partner’s age 70.
Each partner also has the ability to terminate the endorsement as needed and enjoy the cash value as part of a tax-free income stream during retirement.
AgencyONE’s Case Design team gets quite a few requests to illustrate Whole Life solutions. Short pay Whole Life (ten pay) is the most requested option followed by level pay and then projected vanish options. Advisors who sell Whole Life recognize its value but also register objections about its price as compared to other solutions such as UL, IUL or GUL. Sometimes clients make a choice based on price alone which can be a mistake if they don’t understand the values that a Whole Life product provides and how the product solution works. This is precisely why it is so important to have an AgencyONE case design advocate working with you and your client.
AgencyONE believes in the value of Whole Life. A managed Whole Life policy with a premium that is paid as scheduled can build a well-valued policy that can provide benefits in the future. Preset short pay periods (10-pay, 15-pay, 20-pay, pay to 65) tend to perform better than a level pay and have higher dividend rates as compared to level-pay Whole Life products. AgencyONE is not a fan of blending Whole Life with Term since that can create an issue in the future if the policy is not properly managed.
This ONE Idea will discuss a case that involved an advisor who advocated for Whole Life but then could not meet the client’s budget limit. The advisor requested a Whole Life design and Whole Life benefits but when presented with the design then requested a much lower premium than was available for the product.
The advisor presented a male age 52, preferred client, who initially wanted $2,000,000 of Whole Life. At the advisor’s request, AgencyONE illustrated a solution paid to age 65:
The Whole Life paid-to-65 solution met the advisor’s initial request and provided great projected cash value and an increasing death benefit. However, upon review the advisor stated that the premium was beyond the client’s acceptable range.
AgencyONE’s next step was to find a solution with a lower cost. We reviewed a variety of lower cost GUL options:
These scenarios were also paid-up at age 65 and provided a lifetime guarantee for about 50% of the Whole Life premium! While this was a positive, the advisor was dissatisfied that the solution did not show any accessible cash value or an increasing death benefit. Since cash value and dividends were now identified as a priority, we needed to find a different solution.
For the third round of options, AgencyONE illustrated a 50-50 split design using $1MM of the Whole Life 65 and $1MM of GUL. The $1MM of Whole Life would provide the growth and cash values for future performance. The GUL product would be a permanent blend to decrease the overall cost.
This split design dropped the premium by about 25%! This design would provide the client with:
The premium, however, was still beyond the comfort level of the client. Could AgencyONE possibly find a way to lower it still? Remembering how the advisor liked cash value and the dividends that Whole Life offers, AgencyONE redesigned the case for a fourth time.
If we could lower the initial premium to keep costs down now AND use some of the later Whole Life values to catch-up the shortfall of the premium, AgencyONE could satisfy the premium objection AND keep both the cash values and the increasing death benefit in the design. To build cash and death benefit, we kept the Whole Life premium the same as in Step 3 ($54,080/year) but changed the GUL to a lifetime premium of $13,201 (instead of paid up at age 65). This premium also included a $500,000 long-term care benefit on the GUL policy. At age 66 when the Whole Life policy is paid up, the design uses distributions/dividends from the Whole Life policy to pay the GUL catch-up premium for 10 years. This final design lowers the client’s initial premium to age 65 to $67,281 per year – 38% less than Whole Life premium in the stand-alone Whole Life design set forth in Step 1!
The table above shows the transaction along with the premiums and death benefits. Even though the design used Whole Life distributions to pay the catch-up premiums on the GUL policy (years 14-23 or ages 66-75), the client still had over $850,000 of projected cash value in the Whole Life contract at age 75 with a projected dividend at around $27,000. Both contracts are fully paid-up at age 75 under this scenario.
AgencyONE satisfied the request from the advisor and successfully delivered the following:
While the final solution required multiple steps, AgencyONE’s willingness to collaborate with the advisor, work to identify the needs and goals of the client, and explore the various carrier solutions available, enabled us to successfully deliver a case that exceeded the expectations of BOTH the advisor and client.
Please contact the AgencyONE Case Design Department at 301.803.7500
for more information or to discuss a case.
A week doesn’t go by without the AgencyONE Underwriting Team encountering a file that includes a diagnosis of obstructive sleep apnea. We’ve all heard the Darth Vader jokes about wearing a CPAP mask, but what IS sleep apnea and why is it relevant to the underwriting process? In this ONEIdea, we will define obstructive sleep apnea, explain its diagnosis and treatment, and discuss the associated mortality concerns. There is more to that snore; preferred ratings for obstructive sleep apnea are possible assuming the client follows the recommended treatment and negotiations are successful with the targeted carrier partner.
Obstructive sleep apnea (OSA) is a breathing disorder that occurs during sleep. There is actually more than one type of sleep apnea, but the most common one and the focus of this discussion is obstructive sleep apnea. Obstructive sleep apnea is the result of blocked airflow (obstruction); usually caused by the collapse of soft tissue in the back of the throat (upper airway) and tongue during sleep. Some of the most common symptoms of OSA include daytime fatigue, loud snoring, witnessed episodes of stopped breathing, headaches, and elevated blood pressure.
It may come as no surprise that OSA is found to be more prevalent in men. The Mayo Clinic reports that men are TWO TO THREE TIMES more likely to have obstructive sleep apnea as compared to women. Some additional risk factors for developing obstructive sleep apnea include older age, obesity, smoking, and even alcohol or sedative use. The condition frequently goes undiagnosed and is considered a cardiac risk factor for sudden death…while you sleep.
OSA is traditionally diagnosed by a polysomnography (sleep study) completed in the comfort of your own home or at a sleep medicine facility. The at-home testing is obviously less involved, but still measures breathing, oxygen levels, snoring, and possibly even limb movements. A polysomnography at a sleep facility is more extensive and requires more sophisticated equipment. The equipment measures the breathing patterns, oxygen, limb movements, as well as the activity in the heart, brain, and lungs. In either testing environment, the sleep study generates a report that is interpreted by a physician to diagnose OSA and determine the severity of the condition. The physicians who analyze the results are ultimately looking for how many apneic events there were (pauses in breathing during sleep) and how significantly the oxygen levels decreased. Those results are then translated into an obstructive sleep apnea diagnosis of mild, moderate, or severe.
Once a physician has determined the severity of the obstructive sleep apnea, they can make treatment recommendations. Lifestyle modifications can be made if the OSA is related to weight, alcohol intake, and/or sleeping positions, especially if it is only mild in severity. In other situations, an oral device or surgery may help open the obstructed airway. However, the “Gold Standard” treatment for moderate and severe obstructive sleep apnea is PAP (positive airway pressure). The most commonly used PAP device is a CPAP (continuous positive airway pressure) system. The CPAP machine provides warmed and humidified air, in a continuous pressure, adjusted to the user’s OSA severity to effectively keep the airway open while sleeping. The CPAP mask covers your nose and mouth, which can take some getting used to, but it works…and can save your life….and your relationship!
Obstructive sleep apnea isn’t JUST snoring. It is the CAUSE of the snoring. The mortality risks are real and based on the severity of the condition. The potential physical side effects are sleepiness during the day which may result in impaired driving abilities and trouble concentrating. The potential medical side effects are significant and include heart attack, stroke, abnormal heartbeat, heart failure, high blood pressure, etc. Severe OSA is associated with an increased risk of every single one of these events/conditions and, if left untreated, can result in death. Often you hear of someone, “dying quietly in their sleep” without a known cause. Was the culprit undiagnosed obstructive sleep apnea?
When underwriting OSA, underwriters are mostly focused on the following factors to determine the risk class:
Mr. Vader is a 60-year-old non-smoking male seeking $4,000,000 of Variable Universal Life (VUL) insurance coverage for personal purposes. He stands 5’10” tall and weighs 240lbs. His medical history is significant for hypertension treated effectively with Lisinopril and hypercholesterolemia (high cholesterol) managed with Atorvastatin. He also has a mildly elevated fasting blood glucose but does not carry a diagnosis of pre-diabetes or type II diabetes. Last year, Mr. Vader’s wife complained about his snoring and mentioned that she witnessed frequent apneic events (stopped breathing) while he was sleeping. At the urging of his wife, Mr. Vader underwent a sleep study. His results confirmed a diagnosis of severe sleep apnea. The recommended treatment was a CPAP machine. A CPAP titration study was then completed to determine the appropriate CPAP pressure to effectively treat his severe sleep apnea. Mr. Vader has been fully compliant with CPAP treatment for the last nine months. Based on his complete medical history, AgencyONE targeted three carriers for informal consideration (Carrier X, Y, Z). Due to the recency of his OSA diagnosis and the severity, both Carrier X and Carrier Z assessed at Standard Non-Tobacco rates. However, AgencyONE successfully negotiated a Preferred Non-Tobacco offer with Carrier Y due to Mr. Vader’s well documented CPAP compliance. A formal application was submitted, and Mr. Vader placed, not $4,000,000 but, $5,000,000 of VUL coverage at Preferred Non-Tobacco rates. The outstanding offer AgencyONE negotiated was enough motivation for Mr. Vader to secure additional coverage!
$5MM VUL 10-Pay No Lapse Guarantee to Age 100
AgencyONE’s Underwriting Team consistently provides experienced and knowledgeable underwriting along with high-touch service to our AgencyONE 100 Advisors, all while delivering the best offers available in the marketplace.
Please contact AgencyONE’s Underwriting Department for more information at 301-803-7500 or to discuss a case.
If it has been a few years (or even a few months) since your last annuity case popped up, you may be surprised at how much the landscape has changed. Fixed annuity rates are more competitive than they have been in years, and both clients and advisors are seeing the benefits. According to ThinkAdvisor.com, fixed annuity sales are up an astonishing 45% since Q2 2021! Fixed-rate deferred annuities are seeing a large share of the action, with sales increasing 76% year over year.
If you are not actively marketing and considering fixed annuity solutions for your clients, you may be leaving sales on the table.
For clients looking for shorter-term guaranteed returns, three (3) and five (5) year guaranteed products are extremely competitive. They offer better rates than bank CDs with the additional advantage of tax deferral. MYGAs are a great option for your conservative/moderate risk client who is looking for a safe place to park their money for a few years with an attractive combination of risk and opportunity cost.
In fact, the cap rates for many S&P 500 account options are twice as high as they were at this time last year! More and more carriers have also added alternative indexed account options that can provide uncapped growth potential. Lifetime income riders are making a comeback as well, providing flexible options for guaranteed income regardless of underlying performance, while the client retains access to policy cash value.
Income annuities are also seeing the benefits of increased interest rates. The idea of a guaranteed income stream is likely appealing to many of your clients. Do your clients have:
Click here to see a snapshot of current MYGA, FIA and SPIA rates and please contact AgencyONE at 301.803.7500 to see how a fixed annuity could be the solution to helping your clients achieve their goals.
We’ve all heard about OSTEOPOROSIS but WHAT EXACTLY does this condition mean to underwriting life insurance protection or long-term care contracts? This ONE Idea will discuss bone health and why it is so important to mortality and morbidity when considering the purchase of insurance.
If you are over age 30, you are unfortunately on the downslope of bone strength. Whether male or female, your bones begin to remodel or change after age 30 with genetics, nutrition and exercise impacting the rate of decline in bone mass and bone strength. After menopause, women can have a marked decrease in bone mass and increase in demineralization. The statistics tell us that 1 in 3 women over the age of 50 will experience an Osteoporotic fracture in their lifetime. It’s not much better in men – 1 in 5.
Your bones are solid on the outside but have an interior that looks like rolled-up cheese cloth or sponge. Bone marrow occupies the center and is instrumental in manufacturing new blood cells. The bone MATRIX is a combination of spongy bone, compact bone, arteries/veins, and a protective sheath that contains a nerve matrix that generates pain when you injure or break a bone. Your bones are more than just a structural component of your body…. they are living things. Bone material is manufactured, reabsorbed, and manufactured again by your body – a process that becomes LESS efficient as we get older.
Osteoporosis is defined as the metabolic bone disorder that results in the reduction of bone material or bone MASS in the microscopic structure of the bone. It leads to microscopic fractures in the bone matrix that weakens the overall structure. Less mass means less strength. Less strength means the bone is more prone to fracture. AgencyONE’s underwriting team often sees bone studies on older clients that show fractures in the vertebrae of the back as bone strength decreases. Additionally, as we age our bones demineralize and we actually get SHORTER.
The standard test for diagnosing Osteoporosis is the DEXA scan (Double-Energy X-ray) which generates a SCORE. The underwriting of both LIFE and LONG-TERM CARE insurance are DIRECTLY impacted by your client’s DEXA score. The LOWER the DEXA score, the worse the condition. A score of -1 (minus one) is the lower side of NORMAL; a higher score like “0” or +1 would be excellent. A DEXA score between -1 and -2.4 would indicate Osteopenia (the precursor to Osteoporosis) or LOW BONE MASS. Osteoporosis is more severe and comes with a DEXA bone mass score -2.5 or lower.
DEXA scores play a MAJOR part in underwriting both life insurance and LTC contracts. Life insurance companies will evaluate your client’s ability to perform the SIX ACTIVITIES OF DAILY LIVING when assessing your client’s risk. Is your client having difficulties NOW because of deteriorating bone health? Is your client using a cane or walker to get around? Has your client had a fracture or fall within the past 5 years? These kind of MORBIDITY issues can certainly play a role in MORTALITY. The worse your client’s bone density the more likely your client could sustain an injury from a trip or fall.
Good Nutrition and regular physical exercise have proven to defer the negative effects of aging on the bones. Getting the RIGHT amount of Calcium and adequate Protein in your diet is an important start along with a taking a Vitamin D supplement which helps the body absorb Calcium more efficiently. Advise your clients to speak with their physician about nutritional support and exercise. Strength exercises are important but RESISTANCE exercises such as swimming, exercising with elastic bands, walking, playing tennis, hiking, and dancing may be even better. Strength exercises build muscle which assists with balance, movement, and stability and can help prevent a fall that could possibly result in a fracture, a break, or worse!
AgencyONE’s Informal Inquiry contains a LIFESTYLE information page that allows for you and your client to ADD this vital information for underwriting review. LIFESTYLE CREDITS for underwriting purposes can be gained with calcium supplements, vitamins, regular exercise regimens, good nutrition, and social interaction. This is VERY IMPORTANT INFORMATION to provide the life insurance underwriter in your cover letter and applications.
Ms. Summers is a 58-year-old healthy woman who is seeking $3,000,000 of permanent life insurance coverage with a long-term care rider. She would consider an underwritten chronic illness rider as a back-up option but securing a long-term care rider is the ultimate goal for the client. Ms. Summers is a very healthy and active individual with minimal medical history, but she was diagnosed with Osteoporosis in 2019 through bone density scanning (DEXA). At the time of diagnosis, Ms. Summers began a prescribed Fosamax treatment and has remained on the medication without issue. Since her diagnosis and start of medical treatment, Ms. Summers has also increased her exercise. She engages in light aerobic workouts five times per week and strength training four times per week. A repeat DEXA in 2021 revealed that her bone density was stable from prior imaging with her lowest T-score at -3.1.
AgencyONE approached four carriers informally for consideration of Ms. Summers’ case. Carriers A, B, and C offer long-term care riders, while Carrier D only has the option of an underwritten chronic illness rider. Given Ms. Summers’ overall favorable health profile, including regular physician follow-up, well managed Fosamax treatment, and routine exercise, AgencyONE’s underwriting team was able to successfully negotiate offers (including their respective riders) from ALL four carriers. Carrier D’s annual premium was the lowest, but with the chronic illness rider the monthly benefit was capped at only $11,700 a month! Carrier A was far and above the winner as they offered an LTC rider with the highest per month benefit for the lowest annual premium. Ms. Summers submitted a formal application to Carrier A and secured both the life insurance coverage and LTC benefits needed to protect her family and provide long-term care benefits should she need them in the future.
If you have older clients with waning bone health, AgencyONE will help get the coverage they need with the appropriate carrier at the desired premium.
Please contact AgencyONE’s Underwriting Department at 301-803-7504 for more information or
to discuss a case.